Grupo Aeroportuario del Centro Norte (OMA) -- Moody's rates proposed certificados bursatiles 2022 of Grupo Aeroportuario del Centro Norte (OMA)

Rating Action: Moody's rates proposed certificados bursatiles 2022 of Grupo Aeroportuario del Centro Norte (OMA)Global Credit Research - 28 Feb 2022Mexico, February 28, 2022 -- Moody´s de México ("Moody´s") assigned debt ratings of Baa1 (global scale) and Aaa.mx (Mexico national scale) to Grupo Aeroportuario del Centro Norte, S.A.B. DE C.V. (OMA) proposed senior unsecured variable rate certificados bursátiles due 2027 (OMA 22) and senior unsecured fixed rate certificados bursátiles due 2029 (OMA 22-2) guaranteed by Monterrey, Culiacan and Chihuahua's airports.The proposed certificados bursátiles will be the third and fourth draw down, respectively, under OMA's MXN15 billion certificados bursátiles (local long-term revolving) program with a five-year tenor. Together OMA 22 and OMA 22-2 issuances may not exceed MXN 4 billion. The outlook for all ratings is stable.Assignments:Grupo Aeroportuario del Centro Norte, S.A.B. DE C.V. (OMA)....Senior Unsecured Regular Bond/Debenture, Assigned Baa1/Aaa.mx: (OMA 22)....Senior Unsecured Regular Bond/Debenture, Assigned Baa1/Aaa.mx: (OMA 22-2)Outlook: unchanged at stableMoody's has reviewed the preliminary draft legal documentation provided to date related to the debt issuance. The assigned ratings assume that there will be no material variation from the drafts reviewed and that all agreements will be legally valid, binding and enforceable.RATINGS RATIONALEThe assigned Baa1 and Aaa.mx ratings are in line with OMA's Issuer Ratings considering that the proposed notes will be senior unsecured direct obligations for this company and rank pari-passu to its other debt obligations outstanding. Proceeds will be used to refinance MXN2.7 billion of short term debt and to finance OMA's Master Development Plan.Moody's credit view reflects the expectations that OMA will continue registering a strong financial performance with Cash Interest Coverage averaging 5.9x for the 2022-2023 period, while the FFO to Debt ratio will average 41%. While OMA's cash position as of December was equivalent to MXN5.9 billion, providing ample cushion to debt maturities in the amount of MXN1.5 billion due until 2023, the company approved a special dividend distribution in December 2021 of MXN 4.3 billion which was paid on January 2022, eroding OMA's cash position. As a result, Moody's expects a deterioration of OMA's Retained Cash Flow (RCF) / Debt, which could be nearby 0% during 2022. However, Moody's expects that this metric will recover during 2023, and will increase to roughly 20%.OMA's credit quality reflects air traffic recovery during 2021. Following an average 52.3% decrease in 2020, the traffic on OMA's airports registered an important recovery through December 2021, which now stands about 22.2% below 2019 levels. Moody's expectations regarding passenger levels consider a gradual reversion from the 2020 declining trend to a close full recovery towards 2023.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe Global Scale ratings could be upgraded if OMA registers enplanements above pre-pandemic levels on a sustainable basis, while maintaining a strong liquidity position. In addition, an upgrade would need to be supported by our assessment that the linkages with the Government of Mexico will not have any material negative impact on OMA's credit profile.Downward pressure on OMA´s rating could develop if (1) the company´s FFO/debt ratio were to decline to 20% on a sustained basis; (2) its liquidity position deteriorates; (3) it appeared likely that the coronavirus outbreak had a more sustained detrimental impact on traffic levels, either because of travel restrictions or potential airline failures; or (4) a deterioration in Mexico's social and economic trends.PROFILEOMA operates two out of the top 10 airports in the country and contributed with 14.4% (2021) of the total air passengers in Mexico. OMA's traffic is mostly origin and destination travelers (more than 98%), and on average for the 2015-2019 period, 12.6% were international passengers. The airport in the large metropolitan city of Monterrey, along with the tourism destination airports of Acapulco and Mazatlán, and the airports located in the municipality of Culiacan and the state of Chihuahua (total of 6 airports), contribute with more than 70% of OMA's revenues.The principal methodology used in these ratings was Privately Managed Airports and Related Issuers published in September 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1092224. Alternatively, please see the Rating Methodologies page on www.moodys.com.mx for a copy of this methodology.The period of time covered in the financial information used to determine Grupo Aeroportuario del Centro Norte (OMA)'s rating is between 01/01/2016 and 31/12/2021(source: Financial Statements of Grupo Aeroportuario del Centro Norte).Moody's National Scale Credit Ratings (NSRs) are intended as relative measures of creditworthiness among debt issues and issuers within a country, enabling market participants to better differentiate relative risks. NSRs differ from Moody's global scale credit ratings in that they are not globally comparable with the full universe of Moody's rated entities, but only with NSRs for other rated debt issues and issuers within the same country. NSRs are designated by a ".nn" country modifier signifying the relevant country, as in ".za" for South Africa. For further information on Moody's approach to national scale credit ratings, please refer to Moody's Credit rating Methodology published in May 2016 entitled "Mapping National Scale Ratings from Global Scale Ratings". While NSRs have no inherent absolute meaning in terms of default risk or expected loss, a historical probability of default consistent with a given NSR can be inferred from the GSR to which it maps back at that particular point in time. For information on the historical default rates associated with different global scale rating categories over different investment horizons, please see https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1280297.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.Information sources used to prepare the rating are the following: parties involved in the ratings, public information, and confidential and proprietary Moody's information.The ratings have been disclosed to the rated entity prior to public dissemination.A general listing of the sources of information used in the rating process, and the structure and voting process for the rating committees responsible for the assignment and monitoring of ratings can be found in the Disclosure tab in www.moodys.com.mx.The date of the last Credit Rating Action was 24/11/2021.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. 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However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.Please see Moody's Rating Symbols and Definitions on www.moodys.com.mx for further information on the meaning of each rating category and the definition of default and recovery.Please see ratings tab on the issuer/entity page on www.moodys.com.mx for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see our website www.moodys.com.mx for further information.Please see www.moodys.com.mx for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.The ratings issued by Moody's de Mexico are opinions regarding the credit quality of securities and/or their issuers and not a recommendation to invest in any such security and/or issuer.Please see the ratings tab on the issuer/entity page on www.moodys.com.mx for additional regulatory disclosures for each credit rating. Roxana Munoz Asst Vice President - Analyst Infra Finance Moody's de Mexico S.A. de C.V Ave. Paseo de las Palmas No. 405 - 502 Col. Lomas de Chapultepec Mexico, DF 11000 Mexico JOURNALISTS: 1 888 779 5833 Client Service: 1 212 553 1653 Cristiane Spercel Senior Vice President/Manager Infra Finance JOURNALISTS: 0 800 891 2518 Client Service: 1 212 553 1653 Releasing Office: Moody's de Mexico S.A. de C.V Ave. Paseo de las Palmas No. 405 - 502 Col. 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