Dépêches

Fitch: Brazilian Airport Concession Auction Positive

Dépèche transmise le 7 février 2012 par Business Wire

NEW YORK--(BUSINESS WIRE)--Fitch believes that premiums for the auction of the concessions of Brazilian airports are driven by the strong underlying fundamentals in the region. Brazil sold long-term operating licenses for Guarulhos, Viracopos, and Brasilia airports for 24.5 billion reais on Feb. 6 to three consortiums led by Invepar / ACSA , Triunfo Participacoes e Investimentos / UTC / Egis Airport Operation, and Engevix/Corporacion America, respectively. These three airports account for 30% of passenger traffic and close to 60% of cargo in the country, according to the Agencia Nacional de Aviacao Civil (ANAC). And Brazil's traffic base is growing quickly. Over the past decade, it has expanded more than 100% per year during.

We also believe that the level of interested bidders and the effectiveness of the auction process are positives for the growth of these types of infrastructure projects. There were a total of eleven bidders for the three airports. The concession model (which is new in the Brazilian airport sector) indicates that the market is moving toward sharing risks between the public and private sectors. Nevertheless, a framework that addresses completion and operating risks will be pivotal to meet necessary capital investments.

Over the long term, the Brazilian Development Bank (BNDES) will be the primary source of funding for the construction of terminals, runways, and other ancillary infrastructure. We also expect future financing sources to include tax-free bond offerings as allowed by the Civil Aviation Authority. To the extent that some aeronautic revenues are denominated in U.S. dollars, international capital markets access may be feasible as well.

Additional information is available on www.fitchratings.com

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

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