Auckland International Airport: Corporate Action—Recommend Participating in Equity Raise

While we had expected wide-moat Auckland International Airport to raise capital to fund its looming capital expenditure bill, the NZD 1.4 billion equity raise comes earlier than anticipated. Proceeds will be used to pay down debt in the short term, funding capital expenditure outlays as the year progresses. The issue is dilutive to our valuation, at a discount to our valuation, but not materially, so it represents about 13% of market capitalization. We maintain our NZD 8.00 (AUD 7.30) per-share fair value estimate.