NEW YORK - Moody's Investors Service said it has downgraded Bloomington-Normal Airport Authority, Ill.'s long-term GO rating to A1 from Aa3 and assigned a negative outlook, affecting $25.1 million of outstanding general obligation debt. The A1 rating and negative outlook apply to the authority's $4.2 million general obligation (pfc alternate revenue source) refunding bonds, Series 2011.
The Series 2011 bonds will refund all of the authority's $4.0 million outstanding Series 2001 passenger facility charge (PFC) revenue bonds for net present value savings.
Though the current issue is ultimately secured by the authority's general obligation unlimited tax pledge, management expects debt service will be supported by PFC revenues.
The downgrade to A1 incorporates the authority's property tax support that benefits from a sound economic base with continued growth in taxable valuation; fluctuating liquidity position with additional enterprise risk of one carrier ceasing operations in 2012 and another filing for bankruptcy protection; and manageable debt profile that benefits from a growing tax base and limited future borrowing plans.
The negative outlook incorporates the tentative nature of agreements with new and existing carriers to replace service that will expire in June 2012 and the fact that the proposed plans do not mitigate the entire loss of flight operations.
