OREANDA-NEWS. Fitch Ratings says its Rating Outlook for EMEA transport infrastructure in 2016 is Stable, underpinned by economic stabilisation of the eurozone (EZ). However, long-term traffic patterns are uncertain as the EZ cyclical rebound remains exposed to adverse microeconomic shocks. Eighty-two per cent of the ratings in Fitch's EMEA transport portfolio are on Stable Outlook.

Traffic performance is improving as large toll road networks gradually return to pre-crisis traffic levels. Airports are benefitting from growth in passenger traffic. Some of the assets that had been exposed to weakened economies, such as Spain and Portugal, are rebounding, while others, including Italy, are stabilising. However, positive rating actions are unlikely in the near term given the limited visibility on long-term traffic evolution.

Owners of infrastructure assets with corporate-type financing have taken advantage of favourable market conditions to lock in cheaper debt when refinancing, sometimes well in advance of maturities. This has reduced refinancing risk, lengthened average debt maturity profiles, and improved debt metrics mainly through increasing coverage ratios on largely unchanged leverage levels.

Brent oil prices fell steeply over the year to date to USD40-USD45/bbl. The direct effect on road, air and sea traffic of oil price contraction will be positive but modest if the price reduction is perceived as temporary. Low fuel prices would bring a positive, indirect benefit to airports exposed to counterparty risk because this would support the restructuring processes of some European airlines.

An adverse macroeconomic shock or sustained deflationary pressures in EZ countries could lead to a negative outlook for the transport infrastructure sector. Conversely, further evidence of an improvement in the economies of EZ countries with a knock-on effect on traffic would underpin a more positive outlook for the transport infrastructure sector.