BRADENTON, Fla. — Standard & Poor's affirmed its A-plus rating on Charlotte, N.C.'s airport revenue bonds issued for Charlotte Douglas International Airport, and said a change in the airport's governance should not impact the ratings.
The outlook is stable, S&P said July 3.
Charlotte has issued $838.2 million of debt for the eighth-busiest airport for passengers in the U.S.
S&P said its rating reflects the airport's consistently strong liquidity position and very low airline cost structure, strong financial margins, generally favorable demand characteristics, and US Airways' historical commitment to the airport. US Airways merged with American Airlines on Dec. 9, 2013.
The rating also considers the airport's generally positive passenger trends, strong financial metrics, and very strong unrestricted cash position.
Somewhat offsetting credit weaknesses include very high air carrier concentration with US Airways/American accounting for about 91.5% of passengers boarding flights, and high exposure to connecting passengers with 75% of using Charlotte for connections, S&P said in its report.
In July 2013, the North Carolina General Assembly passed a local bill creating the Charlotte Douglas International Airport Commission, which the city is still challenging in court. The transfer from the city to commission continues to be blocked because of a court-granted injunction.
"We would not expect any changes in oversight of the airport to have an impact on the credit rating under the assumption that financial and operational procedures at the airport would remain unchanged from historical practices," said S&P analyst Todd Spence.
"If the new commission was to make changes that negatively affected [airport] finances, including lowering unrestricted cash on hand or coverage levels or making operational decisions that caused lower activity levels at the airport, we could lower the rating," he added.
Last month, lawmakers made clarifications to the bill in hopes of settling the ongoing legal dispute with the city.
The legislation specifies that the commission will operate Charlotte Douglas as an agency of the city, not a special district. Charlotte would still own the airport, and issue debt for it.
Charlotte Mayor Daniel Clodfelter said July 3 that the recent legislative changes are still being studied by the city.
"The city's legal team continues to assess whether the bill clarifies anything or whether it instead introduces new legal issues," he said. "In any event, this new legislation did not end the matter and does not address all of our concerns. We will continue to reach out to state officials to see if we can find a mutually acceptable resolution."
Charlotte Douglas' revenue bonds are also rated A-plus by Fitch Ratings and Aa3 by Moody's Investors Service.
