Moody's Investors Service downgraded Manchester-Boston Regional Airport, N.H., revenue bonds to Baa1 from A3, citing a decline in enplanements and increased regional competition.

The downgrade affects $175 million in debt.

The airport serves Manchester, New Hampshire's largest city, and a market that reaches southern New Hampshire, southern Vermont, and northeastern Massachusetts.

In recent years airlines have increasingly shifted their focus to dominant regional airports, such as nearby Logan International Airport in Boston.

The shift to Logan has led to a long-term decline in enplanements at the Manchester airport.

Moody's also reduced the rating because of the airport's heavy reliance on Southwest Airlines, which accounts for 57% of enplanements.

The airport has high debt levels for an airport in this rating category, said Moody's assistant vice president Earl Heffintrayer and managing director Chee Me Hu.

For strengths, the analysts said the airport has non-airline revenues that are expected to increase. It has minimal capital needs, a relatively new facility with room for higher service levels, and no expectation of borrowing in the near future.

The population living near the airport is stable, the analysts said.

The airport also has maintained steady levels of debt service coverage and days cash on hand. The analysts' expectation that this will continue for the near future accounts for Moody's stable outlook on the rating.

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