In another blow to India’s largest international airport, Fitch Ratings downgraded Delhi International Airport Limited (DIAL) to BB- from BB with a negative outlook. The rating agency downgraded the airport’s Long-Term Issuer Default Rating (IDR),  the senior secured ratings and its orphan financing vehicle Cliffton Limited’s senior secured notes. The downgrade comes as India is reeling to come out of lockdowns after the second wave of the pandemic had gripped it over the last couple of months leading to a hit to air passenger traffic. The rating agency said, “DIAL’s passenger traffic in May 2021 was equivalent to 19% of May 2019 level, with domestic traffic at 21% and international traffic at 12%”. The rating agency now forecasts traffic recovery to pre-pandemic levels only by end-2024 vs. previous expectation of end-2023. This would lead to Fitch-adjusted net debt/EBITDAR to remain over 20x over the medium term. The liquidity of the airport could also come under pressure in case there are any delays in receipt of phase III revenues from a commercial property development being developed by Bharti Realty at the airport. The airport had reported a drop of 38% in its FY21 revenues to INR 24bn ($322mn) vs. INR 39bn ($523.5mn) in FY20. The EBITDA down 30% to INR 69bn ($926mn) in the same period. DIAL has sufficient liquidity with a cash balance of INR 50bn ($671mn) as of March 2021. The airport had been downgraded to BB from BB+ by Fitch in January and by Moody’s to B1 from Ba3 last month as well.

DIAL’s 6.125% 2022s and 6.125% 2026s were stable at 100.75 and 102.44 respectively and its 6.45% 2029s were down 0.28 to trade at 101.33.
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