S&P assigns BB- to TAV, notes B+

S&P said it preliminarily assigned a BB- rating to TAV Airports and a B+ rating to the company’s planned $400 million of senior unsecured notes. The outlook is stable.

“TAV benefits from a diversified airport asset portfolio with mostly long-tail concessions. In 2022, Turkiye accounted for about 60% of the group's EBITDA, as adjusted by S&P Global Ratings, including the 50% proportional consolidation of its flagship airport Antalya. Furthermore, TAV operates a geographically diversified portfolio of airports including Almaty in Kazakhstan (18% of adjusted 2022 EBITDA), Tbilisi and Batumi in Georgia (13%), and several airports in Tunisia and North Macedonia,” the agency said in a press release.

S&P said it forecasts S&P Global Ratings-adjusted funds from operations to debt to widen from a low of 6%-8% in 2023 to 10%-12% by 2025, as EBITDA should be boosted by traffic growth, returns on its expansionary capex, and higher passenger tariffs. It also expects debt to EBITDA to decline to 2.5x-3x by 2025 from the current 5x.

TAV will use the notes to refinance short-term debt.

The stable outlook reflects Turkiye’s stable outlook, a forecast for positive free operating cash flow in 2025 and increasing adjusted FFO to debt toward 10%, S&P said.

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