Dépêches

Fitch Maintains Burbank-Glendale-Pasadena Airport Authority on Rating Watch Negative

Dépèche transmise le 23 novembre 2011 par Business Wire

NEW YORK--(BUSINESS WIRE)--Fitch maintains the 'AA-' rating on approximately $56 million Burbank-Glendale-Pasadena Airport Authority (the authority) senior lien airport revenue bonds on Rating Watch Negative.

Key Rating Drivers:

--Traffic Base Tied to a Strong Yet Highly Competitive Market: The airport enjoys an origination/destination traffic profile within a wealthy and highly-populated air trade service area which is offset by the competitive nature of the Southern California air service market of which BUR serves a relatively modest component, and the domination of air service by Southwest Airlines (Southwest), which provided 66% of the airport's overall service for fiscal 2010.

--Strong Cost Recovery Framework: A residual use and lease agreement with a historically low dependence on airline charges and a very low cost structure, resulting in airline cost per enplanement (CPE) at about $2.09 in fiscal 2011 and historically healthy debt service coverage ratios at or above 2.0 times (x).

--Conservative Debt Structure: The airport's outstanding debt profile consists of entirely fixed rate bonds with a level debt service profile.

--Extremely Low Leverage: The airport's has historically maintained notably strong financial metrics, characterized by extremely healthy liquidity levels and low leverage. Currently, the airport maintains over 2.0x unrestricted liquidity to outstanding long-term debt. Leverage levels will likely remain low even when factoring in a proposed borrowing for the regional intermodal transit center (RITC) project to begin in early calendar 2012.

--Manageable Capital Plan: Political constraints through 2015 limit the airport's ability to take on additional debt to relocate existing terminal facilities; however, the airport is evaluating issuing additional debt in connection with the RITC in the near term.

What Would Trigger A Rating Action:

--Dilution in debt service coverage ratios or liquidity position to support the RITC.

--Continued traffic losses and/or unsuccessful cost control by the outside operator could impair the authority's historically strong non-airline revenue generation ability, resulting in thinner margins.

--Inability to complete the RITC project on time and within the cost parameters currently contemplated.

SECURITY:

The outstanding bonds are secured by net operating revenues of the airport.

CREDIT SUMMARY:

Fitch maintains the Rating Watch Negative on the authority's general airport revenue bonds to reflect concerns over the airport's plan to issue parity debt obligations in support of its RITC. Although the final project cost and funding sources are not yet finalized, the current estimate of approximately $90 million will place downward pressure on the airport's historically high debt service coverage levels and significantly increase the airport's debt burden.

The authority plans to issue additional bonds in the first quarter of 2012. The additional bonds are expected to be on parity with the airport's outstanding bonds and financially supported by a combination of customer facility charge (CFC) revenues and facility rental payments paid by rental car companies. Fitch views the CFCs to be a narrower and volatile revenue stream, which could result in further reliance on general airport revenues or use of the authority's balance sheet. Current estimates indicate debt per enplanement figures could rise to the $60 range from the current low of $24 and debt service coverage will fall closer to 1.50x to 2.0x, a significant deviation from the over 2.0x generated by the authority over the past five fiscal years. While debt service coverage will slim and net debt to cash flow available for debt service (CFADS) will remain very manageable, Fitch believes the airport must retain robust financial flexibility in order to mitigate the risks associated with the airport's smaller traffic base and highly competitive market. Absent a material change in the project's scope or borrowing elements, an affirmation of the 'AA-' rating is unlikely.

The authority expects its debt service profile will grow from the current $5.5 million per annum to approximately $13 million with the issue of the additional airport general revenue bonds. Forecasted CFC revenues at the $6.0 rate, currently the maximum rate per day allowed under State law, are not sufficient to cover the series 2011 debt service, thus facility rent paid by the rental car companies in the amount of the shortfall is pledged to bondholders. The airport credit may assume an elevated exposure to rental car company counterparty risk. Should CFC collections or rental car company payments not be sufficient, the authority will be required to increase airline rates and charges or use its balance sheet to meet costs. Projected CFC collections are estimated to cover approximately 75% of the proposed series 2012 debt service obligations. Fitch notes that a substantial portion of the airport's general airport debt to will be tied to the RITC project should it move forward with the current plan of finance.

The airport's traffic base activity exhibits elevated volatility, particularly in the most recession period. The airport has experienced multi-year declines and a meaningful traffic rebound would be a challenge due to the presence of nearby competing airports as well the reliance on Southwest's schedule capacity. In fiscal 2011, enplanements were down approximately 3.5% when compared to fiscal 2010, bringing enplanements to under 2.2 million. Comparatively, enplanements were over 2.9 million in 2008.

For more information on the airport, please see Fitch's press release available on www.fitchresearch.com dated May 31, 2011.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Rating Criteria for Infrastructure and Project Finance' (Aug. 16, 2011);

--'Rating Criteria for Airports,' (Nov. 29, 2010).

Applicable Criteria and Related Research:

Rating Criteria for Infrastructure and Project Finance

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648832

Rating Criteria for Airports

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=578745

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Business Wire

Les plus belles photos d'avions
Canadair CL-600-2B16 Challenger 605 (A9C-ACE) Bombardier BD-700-1A11 Global 5000 (LX-RAK) Pilatus PC-12/47 (LX-JFM) Dornier Do-328-310 Jet (OY-NCL) Cessna 560XL Citation Excel (CS-DXI) Boeing 757-28A(WL) (G-OOBB)