Fitch Affirms “A” rating for Airport Authority
Friday, September 19, 2014
RATING OUTLOOK UPGRADED TO “STABLE”
MEMPHIS, TN – Fitch Ratings announced today that it has affirmed the Memphis-Shelby County Airport Authority’s (MSCAA’s) “A” rating on the authority’s outstanding $347.5 million bonds secured by net revenues generated from Memphis International Airport (MEM). The Airport Authority’s outlook was upgraded to Stable from Negative.
Fitch cited a number of factors that contributed to the rating, including:
- Strong Financial Position—MSCAA remains extremely strong financially despite the removal of Delta Air Lines’ hub operations. Additionally, long-term debt is at a fixed rate with a steady declining amortization schedule that reduces annual debt service by 24 percent to $37.2 million in 2017 and then to less than $7 million after 2025.
- Cargo Operations—Continued financial strength due to the presence of the Federal Express world cargo hub.
- Positive trends in origin and destination (O&D) passenger traffic—Due in large part to carriers other than Delta adding service, enplaned (boarding) O&D passengers increased by 28.5 percent in Fiscal Year 2014. (The loss of the Delta hub caused a reduction in the number of transfer passengers—those connecting through MEM en route to another city. O&D refers to passengers going to and from MEM.)
“We have worked diligently to maintain our financial strength despite the challenges we’ve faced in the recent past,” said Scott Brockman, MSCAA President and CEO. “These financial ratings show that our efforts have been effective and that the future is bright for the Memphis International Airport.”
While not cited in the Fitch report, other evidence of the airport’s strong performance includes:
- Strong credit ratings from other financial ratings agencies such as Moody’s Investor Service (A3) and Standard & Poor’s (A-).
- The Airport Authority has not issued new revenue bonds since 2010, and does not anticipate adding any bond debt for its recently announced concourse modernization project.
Fitch’s News Release: http://bit.ly/1uMizHL