Moody's Investors Service said it has upgraded the revenue bond ratings on the city of Atlanta's airport general revenue bonds to Aa3 from A1 and affirmed the A1 on the airport passenger facility charge (PFC) and subordinate lien revenue bonds.
The Aa3 rating also applies to the airport general revenue refunding bonds, Series 2014B ($144.96 million) and Series 2014C ($185.745 million). The A1 rating also applies to the PFC and subordinate lien general revenue refunding bonds, Series 2014A($501.43 million). The rating outlook on all bonds is revised to stable.
The upgrade to Aa3 for the senior lien bonds is based on the airport's financial and operational strengths, which are well above average even as the airport has recently completed major capital expansion projects.
The rating is also supported by the strong, vibrant local economy that is expected to outpace growth in the broader U.S. economy; the financial strengthening of the airport's two major carriers; and no additional debt planned for at least the next four years.
Concentration in Delta Air Lines (corporate family rated B1 positive), which accounts for 79% of total enplanements and 63% of O&D enplanements remains a key risk and this concentration has steadily increased as Southwest Airlines (Baa3 stable) has reduced seat capacity here following its merger with AirTran.
The airport's high amount (67%) of connecting traffic makes PFC revenue potentially more volatile and is main reason that the PFC hybrid bond rating remains A1.
