Proceeds will be used to fund the airport’s continued expansion 

Durrant Pate/Contributor

International credit ratings agency, Moody’s, has assigned a Ba3 rating with a positive outlook to the proposed issuance of up to US$385 million in senior secured notes due 2035 by Montego Bay Airport Revenue Finance Limited (MoAir).

MoAir is a special-purpose vehicle designed to raise and invest capital at the Sangster International Airport in Jamaica’s second city. This positive outlook for MoAir mirrors that of the Government of Jamaica (GOJ), with the rating based on preliminary documentation that Moody’s does not expect to materially change before issuance.

The rating reflects Sangster International Airport’s critical role in Jamaica’s tourism sector, its diversified airline mix, and the relatively strong financial performance of the project compared to regional peers. The proceeds from the bond offer will be used to fund the airport’s continued expansion to meet the growing demand.

Credit quality assessment

Moody’s has assessed that the company’s “credit quality is supported by structural protections including offshore cash flow management, limited foreign exchange risk, and a diversified passenger base across the US, Canada, and the UK. Moody’s base case, which assumes modest 1% passenger growth from 2026 onward, still produces an average debt service coverage ratio (DSCR) of 1.9x, with a minimum of 1.6x—offering a solid buffer even under stress scenarios.”

The key risks identified include refinancing risk from the bullet maturity one year after the concession’s expiry in 2034, though this is partly mitigated by revenue protections and expectations of concession renewal. There is also transfer risk, as the operator collects revenue before remitting MoAir’s share to offshore accounts, though the government has committed to top up any shortfalls. 

Additionally, the airport’s location in the hurricane belt exposes it to climate-related disruptions that could affect passenger volumes and operations. 

This proposed transaction follows a similar securitisation for GOJ’s portion of revenue flows from the Norman Manley International Airport (NMIA) through, Special Purpose Vehicle, Kingston Airport Revenue Finance Limited 6.75% 2036 bond, which was issued on September 17, 2024. That transaction raised US$480 million. 

The proceeds from the note issue were used to fund a revenue account and for KingAir to make a one-time payment to the GOJ for the repayment of outstanding debt obligations and the financing of certain infrastructure projects related to the modernisation and rehabilitation of roads leading to the airport.