DBRS Morningstar Assigns “A” Rating to Aéroports de Montréal’s Revenue Bonds, Negative Trend

DBRS Limited (DBRS Morningstar) assigned a rating of “A” with a Negative trend to the $400 million Series S Revenue Bonds (the Bonds) issued by Aéroports de Montréal (ADM) and noted that the Issuer Rating and the rating assigned to ADM’s pre-existing Revenue Bonds are not affected as a result of the issuance of the Bonds. The Bonds will be direct obligations of ADM, ranking pari passu with all other indebtedness secured pursuant to its Master Trust Indenture (MTI).

Bond proceeds will be used to fund ADM’s capital program and its general corporate activities. The Bonds will be nonamortizing, pay interest semi-annually, and will mature on April 26, 2051. The rating assigned to the Bonds is based on the rating of an already-outstanding debt series of the above-mentioned debt instrument.

DBRS Morningstar notes that amendments were made to the MTI through the 20th Supplemental Indenture dated March 30, 2021, that effectively waived ADM’s obligation with regard to the rate covenant, the additional indebtedness covenant, and the restriction on asset sale covenant for 2021 and 2022 fiscal years. DBRS Morningstar further notes that the issuance of the Bonds is in line with its expectation and its base-case passenger volume forecast published on March 1, 2021, has not changed.

A material and negative deviation from DBRS Morningstar’s base-case volume forecast could result in a further negative
rating action. Conversely, the ratings may stabilize if it becomes apparent that DBRS Morningstar’s base-case volume forecast will materialize.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/373262.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is Rating Canadian Airport Authorities (April 7, 2021; https://www.dbrsmorningstar.com/research/376410), which can be found on dbrsmorningstar.com under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021; https://www.dbrsmorningstar.com/research/373262).

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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