Oversubscribed Heathrow bond sale shows strong support despite looming spectre of Brexit, says GlobalData

Following yesterday’s (March 6) successful bond sale by Heathrow Airport Holdings Ltd, Nick Wyatt, Head of R&A, Travel & Tourism at GlobalData, offers his view:

“There has been much doom-mongering with regards to Brexit, but the roaring success of Heathrow’s bond sale shows that investors are far from perturbed despite potential disruption in the eventuality of a no-deal exit.

“Given that Heathrow accounted for approximately 30% of all international passenger traffic in the UK in 2018, the airport will be at the forefront of passenger growth, and it is this that investors are banking on.

“GlobalData figures show that international departures from the UK by air hit 62.7 million last year and we only see that growing, with our forecasts projecting 75.7 million departures in 2022 as demand for business travel continues to grow apace.

“The bond sale was more than four times oversubscribed and raised €650 million, despite the fact it took place just 23 days before the Brexit deadline, bucking the recent trend of debt sales by UK-based companies.

“There is therefore a specific, inherent appeal in Heathrow as an investment proposition, and it lies in the airport’s strong passenger numbers and ongoing expansion plans. These should culminate in the opening of a third runway in 2026 provided a legal challenge from nearby local authorities can be successfully negotiated. ”

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