Nov 27 - Fitch Ratings has published its 'Rating Criteria for Airports',
which describes the analytical framework used by Fitch analysts when evaluating
debt issued by airports across the globe. It applies both to stand-alone
airports and multi-airport systems in full operation with active commercial
service and operational history.
The criteria also apply to multiple forms of ownership, governance and legal
status, whether in the form of a listed company, private corporation,
special-purpose project company, or public law entity.
The report highlights the following five key risk factors which typically
determine the rating of debt issued by airports:
--Revenue Risk -- Volume: Covers the role of the airport and socio-economic and
demographic fundamentals of the surrounding region and the exposure, if any, to
competing alternatives that drive the breadth and diversity of demand and
service provided by airlines at the airport;
--Revenue Risk -- Price: Revenue or cash flow generation as provided through the
airport's legal framework, including terms of the contractual or regulatory
framework that establishes the basis for revenue generation cost recovery from
airlines and passengers;
--Infrastructure Development/Renewal: Planning management and funding of
infrastructure development and renewal;
--Debt structure: Composition of financial instruments, security, additional
leverage tests, distribution limits, and financial triggers.
--Debt service: Covers an evaluation of relevant debt service, financial and
operating metrics on a historical and projected basis, including sensitivity
In addition to further development of these key rating factors, the report also
provides supporting credit risk commentary on other risk aspects specific to
The report should be read in conjunction with Fitch's report 'Rating Criteria
for Infrastructure and Project Finance', published July 12, 2012, and expands on
the current airport rating methodology used by Fitch. The update of this
criteria report is not anticipated to result in rating actions.