DALLAS – Moody’s Investors Service on Friday downgraded Dallas-Fort Worth International Airport’s revenue bonds to A2 from A1.
The downgrade comes ahead of nearly $800 million of bonds expected to be issued in April. The new rating and stable outlook affects $4.9 billion of outstanding revenue debt.
DFW is in the midst of a $2 billion remodeling program for its four original terminals and in 2012 completed the largest refunding of outstanding debt since it opened in 1974.
“The downgrade and A2 rating is based on the marked increase in the airport's expected debt level as it accelerates debt issuance in support of the Terminal Renewal and Improvement Program,” Moody’s analysts wrote. “Total debt outstanding, already among the highest in the nation for airports, is expected to become the highest during 2013.”
DFW’s major tenant, American Airlines, is in the process of merging with US Airways based in Tempe, Ariz. The combined carrier will be headquartered in American’s Fort Worth headquarters on the southwestern edge of DFW. However, the airlines have not determined how the merger will affect major hubs.
“The stable outlook is based on our expectations that the airport's operational, geographic, and financial strengths as well as the economic strength of the Dallas-Fort Worth metropolitan area will allow DFW to successfully navigate a period of heightened risks and high leverage,” Moody’s wrote. “We expect airline capacity levels to remain relatively stable in the near term and experience growth in the longer term.”
