Global Airport News
Investors are holding off buying bonds in British airports operator BAA due to uncertainties about the sale of Gatwick, as the company said on Friday its debt level would not fall as quickly as previously expected.
The sale of Gatwick airport, near London, which may raise up to 1.5 billion pounds ($2.4 billion), had been expected in the first half of this year but BAA said it should now complete by October.
"Bond investors are delaying buying into BAA bonds because of the uncertainty around the Gatwick sale," said one credit analyst, who declined to be named.
The proceeds of the disposal will be used to repay part of the company's debt maturing in 2010.
"The fact that BAA has not sold Gatwick does not make the balance sheet much worse, but it does stop it getting better," said a second credit analyst.
BAA, majority owned by Spain's Ferrovial), expects total debt to be 8.7 billion pounds at the end of 2009, 400 million pounds more than previously expected, but down from 9.3 billion pounds in 2008.
The forecast includes proceeds from the planned Gatwick sale although BAA is currently appealing a Competition Commission ruling that it must sell that airport and two others.
The first credit analyst thought the Gatwick sale would go through shortly and so BAA bonds were "cheap". The bonds are currently trading at around 75 percent of face value.
"The timing of events has not been kind to BAA but many people's perception of the company is too harsh," he said.
BAA said that the higher level of debt in Friday's forecast was not linked to Gatwick's shrinking price tag
