Moody's Investors Service has confirmed Delhi International Airport Ltd's (DIAL's) Ba3 corporate family rating and senior secured ratings and downgraded GMR Hyderabad International Airport Ltd's (HIAL's) corporate family rating to Ba2 from Ba1. The outlook on the ratings for both has been changed to negative from ratings under review, Moody's said.
Delhi International Airport Limited is the concessionaire for the Indira Gandhi International Airport, which is located in the political capital of India, and operates under an Operations, Management and Development Agreement with the Airports Authority of India, a government agency.
"The rating confirmation considers the resumption of domestic passenger traffic on 25 May after a two-month suspension of commercial flights in India, management's efforts to reduce operating cost and its delayed capital spending, which will have a positive impact on the airport's liquidity position," says Spencer Ng, a Moody's Vice President and Senior Analyst.
"The negative outlook, however, reflects material downside risk over the next 12-18 months, given the uncertainty over the recovery in the airport's traffic and India's weakening economic conditions, which could complicate the airport's efforts to secure additional funding to complete its expansion project and refinance its $288.75 million bond maturity in February 2022," it added.
The spread of the coronavirus pandemic, the weakened global economic outlook, low oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets, the ratings agency also said.