Investors are holding off buying bonds in British airports operator BAA due to uncertainties about the sale of London Gatwick airport, as the company said its debt level would not fall as quickly as previously expected.
The sale of Gatwick, which may raise up to GBP1.5 billion pounds (USD$2.4 billion), had been expected in the first half of this year but BAA said it should now complete by October.
The proceeds of the disposal will be used to repay part of the company's debt maturing in 2010.
"Bond investors are delaying buying into BAA bonds because of the uncertainty around the Gatwick sale," said one credit analyst, who declined to be named.
"The fact that BAA has not sold Gatwick does not make the balance sheet much worse, but it does stop it getting better," said a second credit analyst.
BAA, majority owned by Spain's Ferrovial, expects total debt to be GBP8.7 billion at the end of 2009, GBP400 million more than previously expected, but down from GBP9.3 billion in 2008.
The forecast includes proceeds from the planned Gatwick sale although BAA is currently appealing a Competition Commission ruling that it must sell that airport and two others.
The first credit analyst thought the Gatwick sale would go through shortly and so BAA bonds were "cheap". The bonds are currently trading at around 75 percent of face value. |
