Never mind voters or airport executives. The constituency Canada needs to get on board for any privatization of the country’s airports is its bondholders. Investors who hold debt in the country’s biggest airports are protected by rules and contracts that would likely require the government to get their consent — and offer compensation — before it could change the ownership or capital structure of an airport, according to Jose Saracut, managing director fixed income at Manulife Asset Management.
That’s important because privatization is likely to result in credit downgrades, according to Moody’s Investors Service. This would drive up borrowing costs for future debt issuance and have a knock-on effect on travellers.