Fitch Rating recently assigned the ratings on the following airports in the city of Atlanta, Long Beach, Charlotte, and Fresno.
Hartsfield-Jackson Atlanta International Airport (ATL) was given ‘AA-‘ rating on its senior lien airport general revenue bonds, airport passenger facility charge (PFC), subordinate lien general revenue bonds, senior general airport revenue bonds (GARB), and PFC hybrid bonds. Fitch Ratings explained:
The airport’s ‘AA-‘ senior GARB rating reflects its leading position as the world’s busiest airport. Despite the magnitude of connecting passengers, the airport also maintained a sizable origination and destination (O&D) enplanement base of more than 21 million in FY 2019 reflecting the strength of the local MSA. The rating also reflects ATL’s robust liquidity position, which provides financial cushion while volume levels are depressed.
The airport’s ‘AA-‘ PFC hybrid/subordinate GARBs rating reflects ATL’s superior franchise strength and the dual pledge nature of the bonds, while also acknowledging the PFC’s volume dependent revenue stream. ATL is in a unique position among U.S. airports, able to collect more than $200 million in PFCs per year under normal operating conditions
Long Beach, CA’s airport has been assigned with ‘A-‘ rating on its 2022A and 2022B airport revenue refunding bonds, 2022C new money airport revenue bonds, and parity revenue bonds. In affirming said rating, Fitch Rating explained:
The rating reflects the relatively small size of Long Beach Airport’s (LGB) traffic base, limited by local ordinance related to daily passenger commercial flights, as well as the historical single carrier concentration, previously held by JetBlue and now assumed by Southwest Airlines. Regional competition from other airports in the Los Angeles metro are additional factors limiting the airport’s volume risk assessment and overall rating.
Charlotte Douglas International Airport (CLT) meanwhile received an ‘AA-‘ rating on its 2022A and B airport revenue bonds and parity bonds. In this regard, Fitch Ratings reasoned:
The rating reflects the large hub airport’s robust service area, underpinned by a strong and diverse MSA and significant hubbing operations, airline leases with a favorable cost recovery framework that produces strong coverage metrics at extremely low airline costs, and robust liquidity levels. Leverage will increase with the current capital improvement program (CIP) and associated borrowings, but is expected to stabilize at a level consistent with the current rating. Fitch also views positively the airport’s proactive capital management.
Lastly, Fresno Yosemite International Airport (FYI) was given ‘BBB+’ rating on its airport revenue bonds. In assigning said rating, Fitch Ratings reported:
The Rating Outlook revision to Stable reflects the airport’s extraordinary passenger recovery trends above historical levels, as well as prudent financial and debt management through the pandemic. The ‘BBB+’ rating reflects continued growth in enplanement supported by local economic improvements and annual growth of international passengers, which contributes to the airport’s high debt service coverage ratio (DSCR), and satisfactory and increasing liquidity levels. The rating also reflects the airport’s small market.
