How did Sydney Airport shareholders not see this coming?

Well, I got that wrong !
Only 6 weeks after I wrote this post, Sydney Airport didn’t choose to raise more debt to pay its interest coupon…..

even worse, it’s raising $2 billion in equity.

Debt is typically cheaper than equity in this current environment, but this tells me that Sydney Airport’s debt financing has dried up.

Worryingly,  with its growing debt burden, evaporated revenues and worsening equity valuations, the importance of this strategic asset will mean that government support will provide a perennial floor in the share price.

oh dear !

by Rob Zdravevski
11 August 2020



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