The restructuring of Aer Rianta will not trigger the repayment of its €479 million debt, according to Standard & Poor's (S&P).

The opinion of the respected corporate credit-rating agency contradicts that of the company's chief executive, Ms Margaret Sweeney, who has warned the Minster for Transport, Mr Brennan, that the restructuring might constitute a default on the terms of the bond. Her view, expressed in a letter to the Minister last week, was based on advice from the company's solicitors.

"The way we see it, there is only a default if the company is restructured while insolvent. We assume the Government does not intend for the company to become insolvent," said Mr Jan Plantagie, director and head of project finance and transport at S&P.

He said S&P had looked beyond the narrow issue of the legal opinion of Aer Rianta's lawyers to the wider issue of what the holders of Aer Rianta's €250 million in bonds and more than €200 million in loans might do. The bulk of the loans are extended by the European Investment Bank.

"We don't see what the incentive is for bondholders. They are not interested in premature payments," he said.

The most important issue from the bondholders' perspective was that the company retaining responsibility for the debt, the new Dublin Airport Authority, will retain ownership of the critical assets. "We see the company in the future as still having the material assets," he said.

S&P also says that Cork and Shannon airports - which are to be established as separate companies - contribute little to cashflow at present.

"Continuing State ownership of Dublin Airport . . . is positive and the business position of the new company is expected to remain very strong," S&P said in a statement. Cork and Shannon were expected to provide only limited competition to Dublin.

The agency affirmed its A long-term and A-1 short-term corporate credit ratings for the company, but reiterated that the outlook for those ratings was negative. It said it "does not expect the restructuring to result in an immediate requirement to repay the eurobond and/or the EIB loans. Key issues for future credit quality, which cannot yet be assessed are regulation, tariffs and political interference."

The charges that Aer Rianta can levy airlines are set by the aviation regulator and the current regime will be reviewed when the company is broken up. The tariffs that the new airport authority will be allowed to charge will have a major impact on its ability to service the €420 million or so debt it will assume under the break-up, S&P believes.

Uncertainty over this is the main reason for the negative outlook, rather than risk of a bond default due to the restructuring, according to S&P. "Furthermore, any decision to approve an independent terminal at Dublin Airport could be detrimental to credit quality," said Mr Plantagie.

"The implementation of the restructuring could take more than a year and the credit quality of the 'new' Aer Rianta will only become apparent as new regulatory tariffs are proposed and its business plan developed," according to the statement.

S&P added that the company had "sufficient financial flexibility". It said it had undrawn committed bank facilities of more than €150 million and €80 million in cash.