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Fitch Affirms Minneapolis-St. Paul Metropolitan Airports Commission, MN's GO Revs at 'AAA'

July 31, 2014

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings affirms the following Minneapolis-St. PaulMetropolitan Airports Commission, MN's (the commission) unlimited tax general obligation revenue bonds (GORBs) at 'AAA':

--$2.8 million GORBs, series 16.

The Rating Outlook is Stable.

SECURITY

The bonds are general obligations of the commission, payable primarily from a pledge of net revenues. The bonds are further secured by the pledge of the commission's full faith and credit and its statutory obligation to levy a tax upon all taxable property in the metropolitan area, without limitation, if required, to provide funds sufficient to pay debt service.

KEY RATING DRIVERS

DIVERSE, WEALTHY ECONOMY: The rating reflects the underlying strength of the metropolitan area supporting the unlimited tax pledge including a broad and deep economy with low unemployment, above-average wealth levels and a diverse tax base.

STRONG STRUCTURE: The indenture requires the commission to deposit in a restricted reserve the debt service for the following two years. As such, funds are on hand to cover the final January 2015 maturity for the series 16 bonds.

SELF-SUPPORTING OBLIGATION: Strong airport operations and financial performance support payment of GO bonds from operations. The commission has not tapped the GO taxing authorization since 1969.

MANAGEABLE DEBT LEVELS: The commission has a very low level of GO bonds outstanding and no plans to use the remainder of its authorization. The underlying counties have moderate debt levels and capacity to absorb the commission's GO taxing authority if necessary. Overall commission debt levels are moderate.

RATING SENSITIVITIES

The rating is sensitive to shifts in fundamental credit characteristics. The Stable Outlook reflects Fitch's expectation that such shifts are highly unlikely.

CREDIT PROFILE

The commission operates the Minneapolis-St. Paul International Airport (the airport) along with several smaller reliever airports in the region. The commission's tax base, from which the general obligation pledge is derived, consists of seven counties (Hennepin, Ramsey, Dakota, Scott, Anoka, Washington and Carver).

WEALTHY, DIVERSE REGIONAL ECONOMY

The combined area's total assessed value was approximately $3.2 billion for 2012. Hennepin County (ULTGO bonds rated 'AAA', Stable Outlook by Fitch) represents about 47% of the commission's total taxable base. Reflective of broader recessionary trends, taxable assessed values for the counties have decreased for the past four years after strong growth earlier in the decade.

The seven county region benefits from below-average unemployment and high wealth levels, mitigating some of Fitch's concerns about tax base pressures. County unemployment rates are all well below the national average. Likewise, per capita income levels are strong ranging from 106% to 133% of the 2010 national average. Median household income ranged from 100% to 158% of the national average. The area's economy benefits from a diverse employer base, including government, education, health care, and a number of large corporate headquarters. Debt profiles of the underlying counties are moderate.

STRONG LEGALS AND HISTORY OF SELF-SUPPORT FROM OPERATIONS

The indenture requires the commission to deposit in a reserve fund the debt service for the following two years. Usage of funds in the reserve is fully restricted for debt service. If the reserve fund falls below the two-year requirement, the commission must levy a tax, without limit as to rate or amount, on its seven-county jurisdiction. The final maturity on the series 16 GORBs is Jan. 1, 2015, and funds are currently on deposit with the trustee for this debt service payment. The series 16 GORBs are the only GORBs outstanding.

The bonds are fully supported by the strong operations of the airport. The commission has not exercised its taxing authority since 1969. The commission is authorized to issue an additional $55 million of GORBs, but does not intend to do so. The commission has no additional debt planned and maintains a manageable capital plan.

Additional information is available at 'www.fitchratings.com'.

In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope, University Financial Associates, S&P/Case-Shiller Home Price Index, IHS Global Insight, Zillow.com, National Association of Realtors.

Applicable Criteria and Related Research:

--'Tax-Supported Rating Criteria' (Aug. 14, 2012);

--'U.S. Local Government Tax-Supported Rating Criteria' (Aug. 14, 2012).

Applicable Criteria and Related Research:

Tax-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015

U.S. Local Government Tax-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685314

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=843256

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Eric Friedman

Director

+1-212-908-9181

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Jeffrey Lack

Associate Director

+1-312-368-3171

or

Committee Chairperson

Jessalynn Moro

Managing Director

+1-212-908-0608

or

Media Relations:

Elizabeth Fogerty, New York, +1 212-908-0526

Email: elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


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