Moody’s Investors Service on Wednesday downgraded Delhi International Airport Ltd’s (DIAL’s) corporate family rating and senior secured ratings to Ba3 from Ba2. At the same time, Moody’s downgraded DIAL’s baseline credit assessment to Ba3 from Ba2.
The rating action reflects the worsening coronavirus outbreak and the increasingly stringent travel restrictions imposed both in India and globally, including ongoing lockdown measures introduced by the government.
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 airport sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment.
More specifically, the weaknesses in DIAL’s credit profile, including its exposure to falling passenger traffic have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions, and DIAL remains vulnerable to the outbreak continuing to spread.
According to the rating Agency, the ratings have also been placed on review for further downgrade. The overall sector outlook has been changed to rating ‘Under review’ from ‘Stable’.