Morningstar DBRS Requests Comments on Proposed Methodology for Rating Airports

Morningstar DBRS is requesting comments on the proposed "Methodology for Rating Airports" (the Proposed Methodology). The Proposed Methodology is being published in connection with the Fundamental Methodological Integration Project. (See announcement dated October 30, 2023, for details: https://dbrs.morningstar.com/research/422623.)

The Proposed Methodology would, on the close of the Request for Comment period, supersede "Rating Airports," published on April 15, 2024. The Proposed Methodology presents the principal criteria under which Morningstar DBRS assigns and monitors credit ratings for corporate issuers in the airports industry.

The proposed updates generally focus on providing greater transparency on Morningstar DBRS' credit rating process and are designed to refine analytic frameworks and methodologies. Over the course of 2025, Morningstar DBRS will continue its efforts as part of the Fundamental Methodological Integration Project relating to certain other corporate methodologies.

PROPOSED METHODOLOGY CHANGES
The most notable updates in the Proposed Methodology include the following:

(1) Extension of Business Risk Assessment (BRA) and Financial Risk Assessment (FRA) factor ranges: Morningstar DBRS proposes to explicitly present BRA and FRA factor ranges (in the industry supplement) from AAA to CCC, and where appropriate CC/C scores can be assigned.

(2) BRA factor and FRA factor weights: Morningstar DBRS proposes to explicitly present the relative weights of the BRA factors and the FRA factors in the industry supplement.

(3) Overlays: Currently, overlays in corporate methodologies are typically characterized as either industry-specific overlays (which may vary by methodology) or general overlays (which are generally common across all corporate methodologies). Morningstar DBRS proposes to capture overlays that relate more to BRA factors into a BRA Adjustment and to incorporate it into the determination of a Comprehensive BRA. This proposed Comprehensive BRA would capture both the BRA factors plus any BRA Adjustment. Similarly, Morningstar DBRS proposes to rename overlays that relate more to FRA factors to an FRA Adjustment and to incorporate it into the determination of a Comprehensive FRA.

Under the proposed updates, Morningstar DBRS would also rename certain overlays that do not relate to BRA or FRA assessment factors to Additional Considerations. These would include Parent-Subsidiary Relationships, Third-Party Support, and Sovereign Constraint. Morningstar DBRS would apply these Additional Considerations after the determination of an Intrinsic Assessment, discussed below.

(4) Intrinsic Assessment: Morningstar DBRS is introducing the concept of an Intrinsic Assessment, which would be determined by combining the Comprehensive BRA and Comprehensive FRA, resulting in the Intrinsic Assessment Range (expressed as a three-notch range). Morningstar DBRS typically determines the Intrinsic Assessment from the Intrinsic Assessment Range and applies relevant analytical considerations, as appropriate, to arrive at an issuer credit rating.

MATERIALITY OF CHANGES AND EXPECTED CREDIT RATING IMPACT
While there are no significant changes to the analytical approach, Morningstar DBRS deems the proposed updates to be material. No outstanding credit ratings are expected to change as a result of these proposed updates.

Comments should be received on or before May 2, 2025. Please submit your comments to the following email address:
corfincomments@morningstar.com

Morningstar DBRS publishes on its website all comments received, except in cases where confidentiality is requested by the respondent.

Notes:
Morningstar DBRS methodologies are publicly available on its website http://dbrs.morningstar.com under Methodologies & Criteria.

For more information on this methodology or on this industry, visit http://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.