...September 20, 2024 Strong operating recovery: All revenue streams should recover for IIAC over the next 12 months on a full recovery in airport traffic to pre-pandemic levels. Passenger volume at IIAC reached about 97% of pre-pandemic levels as of end-August, in line with our expectation. IIAC's strong first-half results reflected this. Easing capex: Phase 4 expansion is on time and on budget, with target completion still end- 2024. IIAC's capex could peak at KRW2 trillion in 2024 and decline to KRW750 billion in 2025. Stronger financial metrics: IIAC's debt could increase to KRW6.6 trillion in 2024 and decline from 2025, tracking capex. While its FFO-to-debt ratio could slightly weaken in 2024 due to rising debt for Phase 4, the ratio should strengthen toward 20% in 2026, from 12%-17% in 2024- 2025. Rating equalized to sovereign: We equalize the issuer credit ratings on IIAC with those on Korea (##/Stable/A-1+). This reflects our view of an almost certain likelihood of extraordinary government...
