Rating Action: Moody's downgrades Princess Juliana International Airports rating to B1 with a negative outlookGlobal Credit Research - 22 Mar 2021Approximately US$142.6 million of debt securities affectedNew York, March 22, 2021 -- Moody's Investors Service, ("Moody's") downgraded the rating to B1 from Ba3 assigned to Princess Juliana Intl Airport Op Company N.V.'s (PJIA) $142.6 million (Approximate original issuance amount) Senior Secured Notes due 2027. Moody's also confirmed PJIA's Baseline Credit Assessment (BCA) of b3 and changed the outlook to negative. The rating action concludes the rating review that initiated on February 11th, 2021.The rating action follows Moody's rating action in which the agency downgraded the Government of St. Maarten's rating to Ba2 from Baa3 and changed the outlook to negative. For more information on the Government of St. Maarten please visit moodys.com.Ratings Downgraded:..Issuer: Princess Juliana Intl Airport Op Company N.V.....Senior Secured Regular Bond/Debenture, Downgraded to a B1 from Ratings under Review, Ba3Outlook Actions:..Issuer: Princess Juliana Intl Airport Op Company N.V.....Outlook, Changed To Negative From Rating Under ReviewRATINGS RATIONALEThe rating action reflects PJIA's linkages with the Government of St. Maarten, the support provider under our analytical framework for Government Related Issuers (GRI).Moody's estimates a BCA of b3 for PJIA representing the airport's stand-alone credit quality. Under the GRI framework, Moody's also incorporates its assessment of a "high" default dependence and a "strong" likelihood of potential extraordinary support from the Government of St. Maarten. The rating downgrade to B1 from Ba3 reflects a weaker credit profile of the Government of St. Maarten, which under our GRI framework provides a two-notch uplift from the assigned BCA.The b3 BCA reflects PJIA's short-term challenges such as: (i) tight liquidity, (ii) breach of two covenants that require waivers from investors, (iii) debt service payments that will continue to be made in the coming quarters from IATA collections of Airport Departure Fees and liquidity available, mainly business interruption proceeds and (iv) the uncertainty around enplanement recovery in 2021.PJIA also benefits from a $21 million fully committed facility that may be used to cover operating expenditures during reconstruction of the airport. We acknowledge 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.The rating also reflects the airport's weak enplanement trends as a result of the coronavirus outbreak. Enplanements in 2020 were 63% below 2019. For 2021, we expect enplanements will improve but only to 50% of 2019, resulting in continued weak financial performance that will lead PJIA to continue to rely on available cash for its operations and meeting debt service payments. Importantly, in our base case forecast we do not expect PJIA to draw from its 6-month debt service reserve fund.The negative outlook reflects the uncertainty surrounding passenger recovery and the liquidity pressures faced by PJIA. The negative outlook is also in line with the Government of St. Maarten's rating outlook.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGIn light of the negative outlook, upward pressure on the ratings is unlikely in the near term. A downgrade on St. Maarten's rating could result in a downgrade of the ratings. In addition, increased liquidity pressures stemming from lower enplanement levels than expected could also exert downward pressure on the ratings.ABOUT PRINCESS JULIANA INTERNATIONAL AIRPORTPrincess Juliana International Airport Operating Company N.V. is a private corporation with regulated rate setting ability. PJIAE operates the Princess Juliana International Airport, which is the major commercial airport on the island of Sint Maarten/Saint Martin and serves as a hub for connecting traffic to eight nearby Caribbean islands such as Anguilla, St. Barths, Tortola, Saba, St. Eustatius, Nevis, St. Kitts and Dominica. The sole owner of all capital stock in SXM is Princess Juliana International Airport Holding Company N.V., which is 100% owned by the Government of St. Maarten (Ba2 Neg). SXM is managed by a Managing Director under supervision of a Supervisory Board consisting of between three and seven members.The methodologies used in this rating were Privately Managed Airports and Related Issuers published in September 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1092224, and Government-Related Issuers Methodology published in February 2020 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1186207. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.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. 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For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. 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Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Adrian Garza Vice President - Senior Analyst Corporate Finance Group Moody's de Mexico S.A. de C.V Ave. Paseo de las Palmas No. 405 - 502 Col. 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