Assigns 'AA-' to PFC and Airport Sub Revs
Fitch Ratings has assigned a 'AA-' rating to the city of Atlanta, GA's approximately $105 million of senior lien airport general revenue refunding bonds series 2019E, issued on behalf of Hartsfield-Jackson Atlanta International Airport (ATL). Fitch has also assigned a 'AA-' rating to approximately $150 million of airport passenger facility charge (PFC) and subordinate lien general revenue refunding bonds series 2019F.
Rating Rationale
Summary: The airport's 'AA-' senior general airport revenue bonds (GARB) rating reflects its leading position as the world's busiest airport. Despite the magnitude of connecting passengers, the airport also maintains a nearly 20 million origination and destination (O&D) enplanement base that supports a strong local MSA. The total enplanement base coupled with the long-term use and lease agreement with strong rate-setting flexibility should provide for ample coverage and favorable cost per enplanement (CPE), while successfully allowing for implementation of its capital program to meet current and future infrastructure needs.
The airport's 'AA-' PFC hybrid/subordinate GARBs rating reflects ATL's superior franchise strength and the dual pledge nature of the bonds. With an annual enplanement base of more than 52.5 million, ATL is in a unique position among U.S. airports, able to collect more than $200 million in PFCs per year. Given the modest leverage on this lien, PFCs alone are forecast to provide an average debt service coverage ratio (DSCR) of 2.2x over fiscal 2020 through fiscal 2024 in Fitch's rating case. The rating also reflects the additional support of general airport revenues on a subordinate basis, but Fitch does not anticipate that these revenues will be necessary to cover PFC debt service and, to the extent they were necessary, the subordinate rating could be pressured.
