KEY RATING DRIVERS
SIZABLE TRAFFIC BASE SUBJECT TO CONCENTRATION AND CONNECTING EXPOSURES: DFW is located in a strong primary market area that generates strong demand for air service. DFW has a base of 30.1 million total enplanements, of which 12.8 million are categorized as origination/destination. Further, DFW's favorable central geographic location provides for a well-balanced traffic profile for both domestic and international passengers. The bankruptcy situation of DFW's leading carrier, American Airlines, (82% of enplanements) as well as the efforts for American to merge with
STRONG RATE SETTING MECHANISM: The current airline use agreement (which runs through 2020) allows for timely recovery of costs within all airline cost centers. The agreement also provides for adequate cash flow generation to meet all funding requirements under the bond documents as well as funding for renewal and replacement. Airline costs are currently low for a large-hub airport at
LARGE SCALE CAPITAL PROGRAM WITH RELIANCE ON ADDITIONAL BORROWINGS: Much of the
FIXED RATE, LOW COST CAPITAL STRUCTURE: All of DFW's debt is issued in fixed rate mode with generally conservative debt amortization. Aggregate general airport debt is projected to peak at
STABLE BUT MORE LEVERED FINANCIAL POSITION: Debt service coverage and liquidity metrics have been sound. In fiscal 2013 (ended
Enplanement Declines: Losses in total enplanements that signify a change in American's total support at DFW (15% - 25% reduction from current levels).
Lack of Adequate Revenue Growth: Flat or declining airline and non-airline revenue for multiple years.
Borrowing Beyond the Current Plan: Significant additional borrowing beyond the airport's current plan.
The bonds are secured by an irrevocable first lien on gross revenues generated by the operations of DFW, as well as PFC revenues to the extent they are specifically pledged to an individual series of bonds.
Net proceeds of the series 2014A bonds will be used to refund previously issued series 2003 bonds with maturities from 2014 -2032. Expected present value savings is estimated at
Fiscal 2013 operating data indicates positive trends in enplanements, up 3.4% over the prior year, with growth in both domestic and international passengers. Connecting passengers remain the dominant component of traffic representing 58% of total passengers. American Airlines, including American Eagle and its recently merged
Financial performance under the current airline agreement is healthy evidenced by stable debt service coverage levels and strong reserve balance. The ongoing capital programs, including the
For additional information on DFW, please see the Fitch release 'Fitch Downgrades Dallas-Fort Worth Airport to 'A'; Outlook Stable'; dated
Additional information is available at 'www.fitchratings.com'.
--'Rating Criteria for Infrastructure and Project Finance' (
--'Rating Criteria for Airports' (
Rating Criteria for Infrastructure and Project Finance
Rating Criteria for Airports
Seth Lehman, +1 212-908-0755
Jeffrey Lack, +1 312-368-3171
Source: Fitch Ratings
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