In a recent report affirming the Birmingham Airport Authority's A-minus rating, Fitch Ratings said that it would be evaluating the potential effects of surrounding Jefferson County's bankruptcy filing.

Alabama's largest county filed for Chapter 9 protection on Nov. 9 with $4.2 billion of outstanding debt, making it the largest municipal bankruptcy in the United States. Birmingham is the county seat.

"In light of the recent Jefferson County bankruptcy, Fitch will evaluate its general impact to area economic activity and traffic demand," said analyst Charles Askew.

The Birmingham-Shuttlesworth International Airport has $211 million of outstanding revenue bonds. Fitch said the outlook is stable.

Key rating drivers include an established service area with a stable enplanement base of 1.5 million, 97% of which is origination and destination.

The airport has a conservative fixed-rate debt structure, an adequate but short-term airline cost recovery structure, and "solid" financial metrics, having maintained average debt service coverage ratios of 1.8 times since 2005, Fitch said. It currently has 555 days' cash on hand.

The Airport Authority last sold bonds in December 2010, when is issued $151.7 million of revenue bonds toward the financing of its $369 million capital improvement program, most of which entails modernizing the airport terminal. That project is under way.

The Birmingham airport is the largest in the state. Members of the authority overseeing the airport are appointed by the Birmingham City Council.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.