S&P Global Ratings raised its long-term rating and underlying rating on the Metropolitan Nashville Airport Authority, Tennessee's senior-lien airport revenue bonds issued for the Nashville International Airport to A-plus from A. The outlook is stable.
"The rating action reflects our view of BNA's demonstrated financial resilience and rate-setting flexibility during a period of materially depressed activity," S&P credit analyst Kayla Smith wrote in the report. "The rating action further reflects our view of BNA's strong passenger recovery trends exceeding our expectations and our updated activity recovery estimates."
Smith added, the stable outlook reflects S&P’s expectation that the airport's recent enplanement recovery will be sustained or continue to improve and normalize, allowing it to maintain financial metrics consistent with a strong financial risk profile as it finances its capital plan.
More than 15.5 million passengers moved in and out of Nashville International Airport in 2021, 87.3% higher than in 2020 and just 15.1% lower than in 2019, according to the authority.
Last year, passenger volume in July and November exceeded the record-setting 2019 numbers for those two months. During the summer, the number of scheduled nonstop routes hit a record high of 88 markets.
“In addition to the increase in air travel, we continued to progress in other areas, including additional air service, expansion and renovation of BNA and the redevelopment of John C. Tune Airport,” Doug Kreulen, president and CEO of the authority, said in a document posted on BondLink. “The airport authority continued to meet challenges from the pandemic while embracing opportunities to meet future needs and reinforce the vital role we play in the economic recovery of Nashville and Middle Tennessee.”
S&P also analyzed the airport's risks and opportunities related to environmental, social, and governance factors.
“Elevated health and safety concerns, which we consider a social risk factor, are abating and are considered credit neutral in our analysis,” she said in the report. “We analyzed the airport's risks related to environmental and governance factors and consider them in line with the standard for the airport sector. We will evaluate these risks and opportunities as the situation evolves.”
In December 2019, the authority sold $807.7 million subordinate bonds as the
