“The affirmation of the rating and outlook is underpinned by the airport’s adequate financial metrics and enplanement trends,” Moody’s stated.
“The rating action also incorporates Moody’s views on the airport’s essential role for St. Maarten’s economy and its key role as a local hub connecting passengers to eight nearby tourist destinations,” it added.
According to Moody’s, “The stable outlook is a direct result of the company’s strengths,” taking into account the fact that PJIAE N.V. is a private corporation with limited and regulated government involvement.
The sole owner of all capital stock of SXM Airport is the Princess Juliana International Airport Holding Company N.V. (PJIAH), which is 100% owned by the Government of St. Maarten.
Moody’s further noted that, “an upgrade of the rating of St. Maarten could exert upward pressure on the assigned rating to SXM Airport.”
It said, “upward pressure could also occur if debt service coverage is sustained at 2.5 times or higher over the medium term, due either to increased passenger flows or cost containment measures.” However, it also further stated that, “a downgrade of St. Maarten’s rating would exert negative pressure on the rating of SXM Airport.”
“Sustained material declines in enplanements at SXM Airport or debt service coverage consistently falling below 1.5 times and/or a decline in liquidity levels would also exert downward pressure on the rating,” Moody’s said and noted that the airport must therefore continue to be diligent.
“Our team has been working diligently to ensure that we meet the performance benchmarks set by our investors and maintaining our Baa2 rating is therefore good news,” said Larry Donker, deputy managing director of SXM Airport. “We must and will continue to do what’s needed in the interest of the company and those we serve”, he further stated.