KBRA Rates Cities of Dallas and Fort Worth, TX Airport Joint Revenue Refunding and Improvement Bonds AA, Stable
August 09 2024 - 6:22PM
Business Wire
KBRA assigns a long-term AA rating, with a Stable Outlook to the
Joint Revenue Refunding and Improvement Bonds Series 2024 (Non-AMT)
issued by the Cities of Dallas and Fort Worth, TX ("the Cities") on
behalf of Dallas/Fort Worth International Airport (DFW or "the
Airport"). At the same time, KBRA affirms the long-term AA rating,
with a Stable Outlook on outstanding Airport Joint Revenue and
Improvement Bonds previously issued by the Cities on behalf of the
Airport. Joint Airport Revenue and Improvement Bonds are payable
from and secured by an irrevocable first lien on and pledge of the
Airport’s gross revenues. Proceeds of the Series 2024 Bonds will
fund capital improvements, refund outstanding commercial paper
notes, fund a contribution to the reserve fund and pay costs of
issuance.
Credit Positives
- Strong management team has demonstrated an ability to
effectively deal with the complexities of running a major U.S.
airport.
- Growing population and economic base support origin and
destination (O&D) traffic.
- Significant non-airline activity diversifies revenues and
provides a source of discretionary capital funding.
Credit Challenges
- High debt levels on per enplanement basis.
- High concentration with American Airlines as primary DFW
carrier.
- Connecting traffic is a significant component of overall
enplanement activity.
The Stable Outlook reflects KBRA’s expectation that airline and
non-airline activity will continue to expand, which will in-part
offset the additional costs associated with DFW’s extensive CIP.
KBRA expects the additional gate capacity and efficiencies afforded
by the program will further reinforce DFW’s critical importance in
American Airline’s hubbing network and allow debt service coverage
metrics to be sustained at levels above Ordinance requirements.
Rating Sensitivities:
For Upgrade:
- Ongoing population growth and strong local economic performance
resulting in O&D enplanement increases, and elevated rental
car, parking, and concession revenues, as debt is amortized.
- Timely completion of planned capital projects, with lower than
anticipated related airline costs.
For Downgrade:
- Debt metrics increase to levels significantly more than what is
currently forecast.
- While highly unlikely, the reduced importance of DFW as an
American Airlines hub.
To access rating and relevant documents, click here.
Click here to view the report.
Methodologies
- Public Finance: U.S. General Airport Revenue Bond Rating
Methodology
- ESG Global Rating Methodology
Disclosures
Further information on key credit considerations, sensitivity
analyses that consider what factors can affect these credit ratings
and how they could lead to an upgrade or a downgrade, and ESG
factors (where they are a key driver behind the change to the
credit rating or rating outlook) can be found in the full rating
report referenced above.
A description of all substantially material sources that were
used to prepare the credit rating and information on the
methodology(ies) (inclusive of any material models and sensitivity
analyses of the relevant key rating assumptions, as applicable)
used in determining the credit rating is available in the
Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be
located here.
Further disclosures relating to this rating action are available
in the Information Disclosure Form(s) referenced above. Additional
information regarding KBRA policies, methodologies, rating scales
and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit
rating agency registered with the U.S. Securities and Exchange
Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is
registered as a CRA with the European Securities and Markets
Authority. Kroll Bond Rating Agency UK Limited is registered as a
CRA with the UK Financial Conduct Authority. In addition, KBRA is
designated as a designated rating organization by the Ontario
Securities Commission for issuers of asset-backed securities to
file a short form prospectus or shelf prospectus. KBRA is also
recognized by the National Association of Insurance Commissioners
as a Credit Rating Provider.
Doc ID: 1005477
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Analytical Contacts
Douglas Kilcommons, Managing Director (Lead Analyst) +1
646-731-3341 douglas.kilcommons@kbra.com
Linda Vanderperre, Senior Director +1 646-731-2482
linda.vanderperre@kbra.com
Mallory Yu, Senior Analyst +1 646-731-1380
mallory.yu@kbra.com
Karen Daly, Senior Managing Director (Rating Committee Chair) +1
646-731-2347 karen.daly@kbra.com
Business Development Contacts
William Baneky, Managing Director +1 646-731-2409
william.baneky@kbra.com
James Kissane, Senior Director +1 646-731-2380
james.kissane@kbra.com