Moody's Investors Service said it has downgraded to A1 from Aa3 the rating on the outstanding state of Alaska Airports System's revenue bonds totaling $553.2 million.

The Alaska International Airport System (AIAS) includes the Ted Stevens Anchorage International Airport and the Fairbanks International Airport.

The downgrade is based on the change in the airport system's market position due primarily to the slowdown in global air cargo trends.

Given the airport system's relatively high leverage, its financial strength has remained constrained by the marked reduction in air freight activity at the airport and a more robust recovery does not appear likely in the near term.

The A1 rating reflects the airport system's strong market position as a major air cargo activity point, air transportation hub for the state, and key transportation asset for the state of Alaska (GO rated Aaa) and municipality of Anchorage (GO rated Aa2).

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