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Fitch Rates Dallas-Fort Worth (TX) Airport Rev Refunding 'A+'; Outlook Stable

Dépèche transmise le 8 juillet 2011 par Business Wire

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned an 'A+' rating to Dallas-Fort Worth International Airport's (DFW) approximately $140 million joint revenue refunding bonds, series 2011C (Non-AMT). In addition, Fitch has affirmed $3.8 billion in outstanding joint revenue improvement bonds issued by the cities of Dallas and Fort Worth, Texas for DFW at 'A+'. The Rating Outlook for all bonds is Stable.

RATING RATIONALE:

--The airport is located in a strong primary market area that generates sufficient demand for air service.

--DFW's favorable central geographic location provides for a well-balanced traffic profile for both domestic and international passengers.

--The historically sound financial profile is demonstrated by DFW's competitive cost structure and conservative fixed-rate debt structure.

--DFW relies on its dominant carrier, Fort Worth-based American Airlines (American; Fitch Issuer Default Rating 'CCC'), with approximately 85% market share and a high proportion of connecting traffic.

--Debt per enplanement is expected to approach $200 in fiscal 2015 (ended Sept. 30) or north of $450 per origination and destination enplanements when all of the debt to finance the $1.9 billion (inflated dollars) Terminal Renewal and Improvement Program (TRIP) has been issued.

--While not pledged to bondholders, natural gas revenues were expected to provide the airport with a source of internal liquidity and reduce future borrowing needs, but due to lower production estimates and prices, the revenue projections have been reduced.

KEY RATING DRIVERS:

--The airport's $2.1 billion capital program has been agreed to by the signatory airlines. Should non-airline revenues remain flat after the terminal improvements are completed and the additional borrowing has occurred, DFW's finances could be negatively pressured.

--Beginning in October 2014, all restrictions related to domestic air service to or from a competing airport will be removed and any airline will be allowed to operate non-stop service to all U.S. destinations. Fitch will closely monitor the effects, if any, on air traffic at DFW.

SECURITY:

The bonds are secured by an irrevocable first lien on gross revenues generated by the operation of DFW, as well as passenger facility charge (PFC) revenues to the extent they are specifically pledged to an individual series of bonds. Proceeds of the series 2011C bonds will be used to refund portions of the airport's outstanding series 2000A, 2002B, 2002C, and 2003A bonds for interest savings.

For more information, please see the Fitch press release, 'Fitch Rates Dallas-Fort Worth (TX) Airport Rev Refunding 'A+'; Outlook Stable' dated June 16, 2011.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Rating Criteria for Infrastructure and Project Finance' (Aug. 16, 2010);

--'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=548345

Rating Criteria for Airports

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

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