No change in Heathrow Funding Ltd credit ratings

02 October 2020

Heathrow Funding Ltd credit ratings update

Credit rating agency Standards & Poor's maintains Heathrow Funding Limited's Class A and B debt rating, extending its CreditWatch with negative implications. The agency expects COVID-19 will have a more severe impact than anticipated with traffic volume deteriorating further in 2020 and 2021 as a direct consequence of UK's Government policy on quarantines. In their assessment, Standard & Poor's also places important weight to the upcoming regulatory reset starting on 1 January 2022. Class A and B investment grade credit ratings are unchanged at BBB+ and BBB- respectively.

Heathrow's financial position remains robust with £2.4bn of cash and committed facilities as at 30 September 2020. S&P's acknowledges Heathrow's strong liquidity position and management actions to preserve the airport's cash position and mitigate impacts on leverage and interest bills. While the agency expects Heathrow's credit metrics to remain below rating guidance in 2020 and 2021, improvement is expected from 2022 onwards.

Heathrow Chief Financial Officer Javier Echave said:  

"The rapid and decisive actions management has taken to protect the financial resilience of the business have been recognised by S&P. In addition to our strong liquidity position, we are confident that we will deliver at least £300 million of operating cost savings, a cut in our capital expenditure by over £650 million and adapting our operating model to help us protect as many jobs as possible and play our part in rebuilding the UK's economy. We will continue working to maintain investor confidence and restore stronger credit metrics in the medium term." 

Further updates will be provided as part of Q3 results scheduled to be on 28 October 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