Moody's Investors Service said it has upgraded to A1 from A2 the rating on the Metropolitan Nashville Airport Authority, Tenn.'s airport improvement revenue bonds.
At the same time, Moody's has affirmed the A3 rating on the authority's special facility rental bonds (MPC CONRAC LLC Project), Series 2010. The outlook for both liens is stable.
MNAA controls Nashville International Airport (BNA) and the general aviation John C Tune Airport.
The upgrade to A1 is supported by the airport's low and declining debt levels and the above average growth of the Metropolitan Nashville area's population base, economy, and passenger enplanement levels.
Among mid-sized hub airports, the airport has had one of the strongest recoveries in passenger enplanement levels from the 2008 economic downturn, driven by both organic travel demand from area residents as well as growing tourism that is supported by a new convention center.
Moody's feels that the city's unique "Music City USA" culture will continue to be a strong draw as a travel destination and underpin strong airport origination and destination traffic. The authority's financial performance is relatively stable, given the full residual nature of the airport use agreement.
Moody's notes that the authority has been able to increase liquidity, a historical weakness, through non-aeronautical revenues not subject to the airline use agreement.
The upgrade is additionally based on the low projected capital needs at the airport which should not require significant additional debt or additional costs to the airlines at a time when debt service levels are declining as debt matures.
