DBRS Morningstar Changes Trend on Aéroports de Montréal to Positive, Confirms Ratings at "A"

DBRS Limited (DBRS Morningstar) changed the trend on Aéroports de Montréal’s (ADM or the Authority) Issuer Rating and Revenue Bonds rating to Positive from Negative and confirmed both ratings at “A”. The trend change is primarily supported by the robust traffic recovery observed to date and because the DBRS Morningstar’s volume forecast for 2022 will be exceeded.

Generally speaking, traffic volume has continuously recovered since the beginning of this year. As of September 30, 2022, total year-to-date passenger volume reached 11.6 million, or 74% of the 2019 level, with total monthly traffic in September hitting 91% of the pre-pandemic level. During Q3 2022, volumes of domestic, international, and transborder sectors stood at 82.8%, 93.2%, and 92.5% of their respective 2019 levels.

For the nine months ended September 30, 2022, ADM reported a total EBITDA of $225.0 million, compared with $284.7 million during the same period in 2019, also better than expected. Liquidity is robust with approximately $533 million of unrestricted cash as of September 30, 2022—an increase of $115 million from the beginning of the year. Liquidity is further supplemented by approximately $178 million of undrawn committed funds under the Authority’s credit facilities at the end of Q3 2022.

DBSR Morningstar considers the current rating level to be well supported and may take further positive rating action if the traffic volume remains satisfactory for the rest of the year and the Authority’s leverage intention continues to be in line with our expectations.

ESG CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (May 17, 2022).

Notes:
All figures are in Canadian dollars unless otherwise noted.

The principal methodology is Rating Airports (May 25, 2022; https://www.dbrsmorningstar.com/research/397283/rating-airports), which can be found on dbrsmorningstar.com under Methodologies & Criteria.

A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://www.dbrsmorningstar.com/research/397223/interplay-of-global-corporate-finance-rating-methodologies-when-analyzing-corporate-finance-transactions

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at info@dbrsmorningstar.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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