GOAA also has
The rating reflects the airport's position as a leading origination and destination (O&D) market, with a strong traffic base of over 17 million enplanements and a diverse carrier mix providing stability through the recent downturn. GOAA benefits from a conservative debt structure with minimal variable rate exposure; low leverage of 2.2x; and stable debt service coverage expected to be above 1.6x and 1.5x, respectively, for senior and all obligations in the medium term. GOAA is currently revising its capital program and financial plan, and future additional borrowing is likely as the airport considers the timing of its
Key Rating Drivers:
Revenue Risk - Volume: Stronger
Stable Traffic Levels With Diverse Carrier Mix: The airport's high level of O&D traffic of 17.4 million enplanements has provided stable performance in recent years. Enplanements are influenced by tourism and leisure but have been largely flat in recent years, with a 1.7% decline seen in 2013 and a 0.5% decline seen for the first nine months of fiscal 2014. The airport benefits from a well-diversified mix of carriers, with the largest carrier (Southwest/
Revenue Risk - Price: Stronger
Competitive Cost Structure: The airport has a relatively competitive airline cost structure, with a total cost per enplaned passenger (CPE) of
Capital Program May Expand: The 2013-2018 capital improvement plan (CIP) currently totals
Debt Structure: Stronger
Conservative Debt Structure: The airport has a strong debt structure, with over 90% fixed rate debt (100% on the senior lien) and a manageable amortization profile that delevers rapidly after 2018.
Strong Financial Profile: The airport has stable financial operations drawing from diverse sources of operating revenues, adequate senior lien debt coverage at 1.63x in 2013, and relatively low overall leverage at 2.2x net debt to cash flow available for debt service (CFADS). Coverage is expected to remain above 1.6x and 1.5x, respectively, for senior and all obligations in the medium term, though Fitch notes a revised forecast is being developed by the authority in the context of its updated CIP, and will review when available.
GOAA's peers include other south
Negative - Unexpected downturns or volatility in airport traffic operations.
Negative - Erosion of the airport's current strong financial position and rate-setting flexibility.
Negative - Issuance of South Terminal project debt before it is clear that traffic demand exists to support the investment could lead to rating pressure.
Negative - Modifications to the five-year capital plan that alter leverage requirements.
Positive - Given the airport's strong rating, upward rating movement is unlikely.
Operating revenues increased by 3.8% to
For the first six months of fiscal 2014 through March, operating revenues are up 3.9% over the same period a year prior. Management's latest estimates for 2014 indicate operating revenues will also be 3.1% above budget. For the same period, operating expenses are up 0.6% over a year prior. Management's latest estimates for 2014 indicate operating expenses will be flat compared to budget. Management estimates 2014 coverage will be 1.92x for senior bonds and 1.78x all in (vs 1.73x and 1.63x budgeted).
The authority continues to maintain strong balance sheet flexibility with
The 2013-2018 CIP currently totals
The bonds are secured by a pledge of net revenues generated from the operations of the airport. PFC revenues, limited to a maximum of 1.25x annual debt service for PFC-eligible projects financed through airport revenue bonds, are also pledged.
Additional information is available at 'www.fitchratings.com'.
--Rating Criteria for Infrastructure and Project Finance (
--'Rating Criteria for Airports' (
Rating Criteria for Airports
Rating Criteria for Infrastructure and Project Finance
Source: Fitch Ratings
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