S&P Global Ratings revised its outlook on Phoenix Sky Harbor International Airport's bond ratings to positive from stable ahead of a refunding pricing this month.
A AA-minus rating for general airport revenue bonds and A-plus rating for junior lien GARBs were affirmed by S&P, which noted Sky Harbor has at least a one-in-three chance of a rating upgrade over the next two years.
"The outlook revision reflects our view that we could raise the rating within our two-year outlook period if the airport can achieve its forecast financial metrics — debt service coverage, liquidity, and debt position — and sustain them as its current capital improvement plans are completed while continuing to grow its enplanement base," S&P analyst Kevin Archer said in a statement on Tuesday.
"This rating reflects positively on our strong financial performance and will provide us the ability to move forward with our ambitious capital plan while maintaining competitive airline costs," Phoenix Aviation Director Chad Makovsky said in a statement.
About $596 million of revenue bonds are part of the financing plan for the airport's fiscal 2025-2029 capital program, which totals $2.7 billion and consists of
Depending on project cash flows, Sky Harbor expects to issue bonds as soon as next year, according to the city's statement.
"The airport's capital plan is demand-driven, modular, and affordable, requiring moderate new money debt needs," Phoenix Chief Financial Officer Kathleen Gitkin said. "The city and airport remain focused on bondholder protection and financial flexibility while operating the airport."
The investor presentation showed Sky Harbor's enplanements hit a record 25.47 million in fiscal 2024 and are up 4.3% so far in fiscal 2025.
The upcoming $85.2 million junior lien GARB deal issued by the city of Phoenix Civic Improvement Corp. will refund Series A and B bonds sold in 2015, according to the preliminary official statement. Siebert Williams Shank is the lead manager. The bonds are rated Aa3 with a stable outlook by Moody's Ratings.
Both rating agencies cited the airport's role as the air travel hub for the growing Phoenix region.
