Standard & Poor’s lowers its credit rating for airport operator ADP

(Photo: ADP)

The financial services and global ratings specialists, Standard & Poor’s (S&P) is lowering its long-term issuer and issue credit ratings for the airport operator, Group ADP (formerly Aeroports de Paris) (ADP) to ‘A’ from ‘A+’, upon the coronavirus outbreak.

The rating agency said it expects a sharp reduction in France-based ADP’s revenue and cash flow – leading to much weaker credit metrics in 2020 relative to the operator’s 2019 results and previous expectations.

In a statement on March 25, S&P said that a 25% decrease in passenger traffic for 2020 is currently being taken as the base case assumption, and ADP is expected to take several actions to reduce the impact of this decline, including cost and capital expenditure (capex) savings and dividend reduction. However, the ratings agency believes these initiatives will be insufficient to offset the effect of the reduced demand on the company’s credit metrics.