Moody's Investors Service today placed GMR Hyderabad International Airport Ltd's (HIAL) Ba1 corporate family rating (CFR) on review for possible downgrade. The outlook has been changed to rating under review, from negative. The rating action reflects the worsening coronavirus outbreak and the increasingly stringent travel restrictions imposed both in India and globally, including ongoing measures introduced by the Government of India (Baa2 negative), the investors service said in a media statement.

The HIAL is the concessionaire for the Rajiv Gandhi Hyderabad International Airport (RGIA) in Hyderabad under a long-term concession agreement with the Ministry of Civil Aviation.

"The rating action reflects our expectation of a sharp decline in passenger and aircraft traffic at Hyderabad Airport in the coming months and the uncertainty over the timing and extent of a recovery, which coincides with increased debt issuance as the airport enters the peak stage of its Rs 55 billion expansion project," said Spencer NG, a Moody's Vice-President and Senior Analyst, in the statement.

The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The airport sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment, the statement added.

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