NEW YORK--()--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 analysis.
In addition to further development of these key rating factors, the report also provides supporting credit risk commentary on other risk aspects specific to airports.
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.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Rating Criteria for Infrastructure and Project Finance' (July 12, 2012).
Applicable Criteria and Related Research: Rating Criteria for Airports
Rating Criteria for Infrastructure and Project Finance