Research Update: Irish Airport Operator daa PLC Outlook Revised To Stable On Expected Lower Tariffs; 'A-' Rating Affirmed

In our view, the proposed tariff decline for Dublin Airport in the 2020-2024 regulatory period will harm daa PLC's credit metrics. The extent of the deterioration will depend on the final determination, daa's ability to meet operating efficiencies, and the government's dividend expectations. We expect daa will generate negative free operating cash flow during the regulatory period, since the company's operating cash flow will be insufficient to fund the approximate €2.3 billion expansion needed to support increasing traffic. We are revising the outlook on daa to stable from positive and affirming the 'A-' long-term issuer credit rating. We are also affirming the 'A-' issue rating on the company's senior unsecured debt. The stable outlook reflects our view that daa will

...- In our view, the proposed tariff decline for Dublin Airport in the 2020-2024 regulatory period will harm daa PLC's credit metrics. - The extent of the deterioration will depend on the final determination, daa's ability to meet operating efficiencies, and the government's dividend expectations. - We expect daa will generate negative free operating cash flow during the regulatory period, since the company's operating cash flow will be insufficient to fund the approximate 2.3 billion expansion needed to support increasing traffic. - We are revising the outlook on daa to stable from positive and affirming the 'A-' long-term issuer credit rating. - We are also affirming the 'A-' issue rating on the company's senior unsecured debt. - The stable outlook reflects our view that daa will continue to benefit from a moderately high degree of extraordinary state support, which would offset a potential one-notch downward revision of the company's stand-alone credit profile (SACP) during the next regulatory...

Research Update