Airport Gets Positive Revise

Standard & Poor’s revised to positive from stable its outlook on the Omaha Airport Authority’s $32.2 million of outstanding revenue bonds issued on behalf of Omaha Eppley Airfield. The OAA also affirmed its underlying A-plus rating on the authority’s debt. The outlook shift is based on strong debt service coverage of 3.64 times in 2006, strong liquidity with 955 days cash on hand in 2006, market dominance in the area, and the expectation of cash and grants to fund future capital needs. Secured by a pledge of the authority’s revenue, the bonds will mature in 2014. Almost all of the OAA’s revenue comes from Eppley Airfield, with only around 1% coming from the smaller Millard Airport. Additional security is provided by a debt service reserve fund. If net revenues fall below 1.25 times debt service coverage, Eppley must hire a consultant to recommend how to increase coverage. “The positive outlook is based on the airport’s history of enplanement trends, high debt service coverage, and our expectation that management will prudently manage its capital program,” wrote analyst Mary Ellen Wriedt in a report on the outlook revision. Located four miles northeast of downtown Omaha, Eppley has two terminals with 20 gates. Southwest Airlines makes up 23.5% of total passengers, followed by United Airlines and its affiliates. The OAA has not issued new-money revenue bonds since a $61 million issue in 1984, though it has issued several series of refunding bonds.