Moody’s Investors Service last Thursday downgraded the Hillsborough County Aviation Authority’s revenue bonds to A1 from Aa3. The move affects $692.4 million of outstanding debt. The outlook is stable. The HCAA oversees Tampa International Airport on Florida’s west-central coast.

The downgrade is based on the airport’s debt-service coverage levels, which have remained below the levels that were expected when a negative outlook was assigned in June 2009, according to analyst Kurt Krummenacker.

The lower rating also incorporates enplanements that were below average the last three fiscal years and the expectation that Tampa’s economy will struggle to see significant near term growth.

The airport authority’s challenges include financial margins that are projected to remain narrow and debt-service coverage that is expected to remain near or below 1.5 times, stable financial liquidity though below Moody’s median levels, and exposure to substantial leisure travel affected by the poor economy, Krummenacker said.

Debt-service coverage is estimated to finish fiscal 2011 at 1.44 times. Coverage has remained substantially lower than historical averages and is well below the level of similar airports at the Aa3 rating level, Moody’s said.

The HCAA completed a new five-year airline use and lease agreement that became effective in October 2010 featuring a hybrid rate-making structure with an extraordinary coverage protection feature that requires airlines to pay any additional amount required to meet the airport’s rate covenant. Airline cost per enplanement has only increased to $5.04 in fiscal 2010, well below the Moody’s U.S. airport median of $7.34.

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