Heathrow Funding Ltd credit ratings update

2 June 2020

Heathrow Funding Ltd credit ratings update

Credit rating agency Standards & Poor's has put Heathrow Funding Limited's Class A and B debt on CreditWatch with negative implications. The agency anticipates COVID-19 will have a more severe impact than anticipated on passenger traffic while recovery to pre-crisis volumes may not occur until at least 2023. Class A and B investment grade credit ratings are unchanged at BBB+ and BBB- respectively.

Heathrow's financial position remains robust with £3.0bn of cash and committed facilities as at 30 April 2020. While S&P acknowledges Heathrow's sound liquidity position and various management actions to preserve the airport's cash position and mitigate impacts on leverage and interest bills, the agency expects Heathrow's credit metrics to deteriorate further in 2020 as a result of the severe impacts of the pandemic.

Heathrow Chief Financial Officer Javier Echave said:  

" Prudent management and investment in the airport over the past decade put Heathrow in a robust financial position - which S&P has recognised. We continue taking decisive steps to protect Heathrow's financial resilience. In addition to our strong liquidity position, we are reducing our operating costs by at least £300 million, cutting our capital expenditure by over £650 million and adapting our operating model to help us keep Britain's hub airport open safely and protect vital supply lines throughout this crisis. We will continue working to maintain investor confidence." 

Further updates will be provided as part of our June investor report scheduled to be published in the first half of June 2020. 

For investor enquiries please contact Christelle Lubin on +44 7764 805 761

For media enquiries please contact Weston Macklem on +44 7525 825 516