NEW YORK - Standard & Poor's Ratings Services said it has raised its long-term rating on Oklahoma City Airport Trust's bonds, supported by the U.S. Bureau of Prisons, to A-minus from BBB, reflecting a long history of lease payments and the strong essentiality of the project. The outlook is stable.
"Under our criteria, the rating is limited to the current rating level due to the right of the lessee, the federal Bureau of Prisons, to terminate the lease for convenience with minimal compensation to the airport," said Standard & Poor's credit analyst Edward McGlade.
This risk is offset by the following strengths: the essentiality of the project, the hub of the federal detention transportation system; the inclusion of lease payments in the bureau's base appropriation, which minimizes appropriation risk; and the credit strength of the obligor, the U.S. government, acting through the bureau.
The stable outlook reflects the essentiality of the project and the expectation of the federal Bureau of Prisons' continued timely payment of lease revenues.
The bonds were issued to fund the construction of a 530,000-square-foot building on the Oklahoma City Airport grounds to be used as the national processing and transportation center for federal prisoners. The facility is essential to the operations of the bureau as well as the U.S. justice system, both of which depend on it for the intake and transfer of prisoners.
