Moody's Investors Service said it has affirmed the A1 rating of the Denver (city and county of) airport enterprise $3.72 billion airport system revenue bonds and the a2 rating of the $719 million subordinate revenue bonds.
The outlook is stable. The city operates Denver International Airport (DIA).
Both ratings reflect the airport's monopoly position in the diverse and growing Denver service area that has provided above average originating and destination traffic growth.
The rating is also supported by the geographically central location that leads to diversified airline service, with United, Southwest, and Frontier all operating connecting service at the airport and accounting for at least 19% of enplanements.
The rating is negatively pressured by the increased leverage to pursue non-aviation related projects such as the connection to the new light rail system and on-site hotel. In the case of the transit connection, the operations will compete long-term with on-airport parking, which is a key revenue driver and contributor to excess coverage outside of the airline use agreement.
Leverage is elevated for the A1 level, but is expected to decrease substantially over the next 10 years as debt associated with the construction of the airport matures.
Additionally, the airport has approximately 23% of debt in non-fixed rate instruments, which is a greater share than most airports at the rating category.
