Sovereign Risk Steers Latin American Airports' Credit Quality

This report does not constitute a rating action. Sovereign creditworthiness continues to be the primary rating driver, limiting the likelihood of upgrades of most rated airports for the next 12-24 months. Downgrades could occur if economic growth slows significantly, both regionally and in the U.S., leading to a substantial decline in passenger volume. Chart 1 Chart 2 We forecast passenger growth of 1%-2% for the next 12-24 months, in line with our regional GDP growth projections, as we believe historical growth figures are sensitive to passenger volume fluctuations stemming from economic volatility. U.S. demand for air travel, particularly to Mexico and the Caribbean, will be a key contributor. However, growth rates will vary based on factors such as domestic economic

... the credit outlook for Latin American airports. Upgrades of these entities are unlikely without improved sovereign credit profiles, while significant economic slowdowns (both regional and in the U.S.) pose a downgrade risk due to passenger volumes' sensitivity to economic fluctuations....

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