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Fitch Rates Denver International Airport, Colorado's $106MM Revs 'A+'; Outlook Stable

Dépèche transmise le 21 octobre 2009 par Business Wire

NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns an underlying 'A+' rating to approximately $106 million City and County of Denver, Colorado, (the city), series 2009C airport system revenue bonds for the Denver International Airport (DIA). The series 2009C bonds will be issued as variable-rate demand obligations with a direct-pay letter of credit (LOC) provided by JP Morgan Chase Bank, National Association (currently rated 'AA-/F1+' by Fitch) supporting the bonds. Fitch also affirms the 'A+' rating on the city's approximately $4.1 billion in outstanding airport system revenue bonds. All airport system revenue bonds are payable from the net revenues of the airport system. The Rating Outlook on all bonds is Stable.

The 'A+' rating reflects the large and diverse economy of the Denver Metropolitan Area, the favorable balance and resiliency of DIA's origination and destination (O&D) and connecting passenger traffic, DIA's favorable geographic location that positions Denver favorably for ongoing domestic hubbing activity, the growing presence of low-cost carriers that continues to moderate United's large market share, and favorable rate-setting provisions under use and lease agreements that consistently produce sound financial results. Credit concerns include the already high and still increasing debt levels coupled with the potential upward trend in airline costs associated with the implementation of the current multi-year capital program. Fitch also notes that the weakening credit quality of Denver's anchor carrier, United Airlines (UAL; Issuer Default Rating 'CCC'), and the recent bankruptcy developments of Frontier do introduce some near-term risks to the ability to maintain its overall positive air service trends. Additionally, despite successful restructurings of certain variable-rate debt and interest rate swaps throughout 2008, DIA still retains nearly $1.3 billion of variable-rate obligations, which exposes the airport to volatility amongst the swap counterparties and liquidity providers, as well as stabilization of debt interest costs.

Additional information is available at www.fitchratings.com.

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