Research Update: Mexico City Airport Trust 'BBB' Ratings Placed On CreditWatch Negative On Expected Fall In Traffic Amid COVID-19

As the spread of the coronavirus continues and global and local mobility restrictions intensify, we anticipate an unprecedented drop in passenger traffic volume at the Aeropuerto Internacional de la Ciudad de Mexico (Mexico City Airport) in 2020 with a gradual recovery in the medium to long term. We've updated our base-case scenario to include a 55% traffic reduction this year and a return to 2019 traffic levels only by 2023. In this context, we expect the Mexico City Airport Trust's (Mexcat or the project) metrics, i.e. debt service coverage ratios (DSCRs), to be significantly affected, particularly in the next 12 months, when we forecast the project will partially use its debt service reserve account (DSRA). Therefore, on May 11, 2020,

...- As the spread of the coronavirus continues and global and local mobility restrictions intensify, we anticipate an unprecedented drop in passenger traffic volume at the Aeropuerto Internacional de la Ciudad de Mexico (Mexico City Airport) in 2020 with a gradual recovery in the medium to long term. - We've updated our base-case scenario to include a 55% traffic reduction this year and a return to 2019 traffic levels only by 2023. In this context, we expect the Mexico City Airport Trust's (Mexcat or the project) metrics, i.e. debt service coverage ratios (DSCRs), to be significantly affected, particularly in the next 12 months, when we forecast the project will partially use its debt service reserve account (DSRA). - Therefore, on May 11, 2020, S&P Global Ratings placed the '###' issue-level ratings on the trust's senior secured bonds on CreditWatch with negative implications. The ratings benefit now from our view of the extraordinary support from the Mexican government, which continues...

Research Update