LOS ANGELES — Los Angeles International Airport received rating affirmations ahead of plans to price $302 million in general airport revenue bonds Wednesday.
The bond proceeds will help fund $2.1 billion of the airport's $11.3 billion in airport improvements.
Bond ratings of Aa3, AA and AA ratings were affirmed by Moody's Investors Service, Standard & Poor's and Fitch Ratings, respectively. S&P and Fitch confirmed stable outlooks and Moody's retained its positive outlook.
The LAX modernization program consists of more than 20 individual projects and is described as the largest public works program in the city's history.
The bonds will be sold in two series: $274 million 2015 Series D senior revenue bonds subject to the alternative minimum tax and the $27.8 million Series E senior revenue bonds, non-AMT bonds. The fixed-rate bonds will have bonds maturing from 2017 to 2045.
Siebert Brandford Shank & Co. is senior manager of the syndicate. Citi, J.P. Morgan Securities, Ramirez & Co. and Stifel, Nicolaus & Co. are co-managers. Kutak Rock is bond counsel. Polsinelli is disclosure counsel. The co-financial advisors are Public Resources Advisory Group, Public Financial Management, Inc. and Backstrom McCarley Berry & Co., LLC.
Though the scale of the capital program is significant, the concerns "are well mitigated by the airport's strong and resilient market position in the Los Angeles region and favorable financial position," Fitch said in its report.
LAX has $4.1 billion in outstanding debt.
The airport has averaged 4% growth in enplanements over the past five years. Enplanements grew by 5.2% in fiscal 2015 to 36.1 million enplanements.
Analysts viewed the diversity of the airport's carriers as a credit strength. It has 100 domestic, foreign and cargo carriers. American Airlines, the largest carrier, accounted for just 18.8% of the airport's total enplanements in fiscal 2015.