Dépêches

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

Dépèche transmise le 6 octobre 2011 par Business Wire

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned an 'A+' rating to Dallas-Fort Worth International Airport, Texas' (DFW) approximately $106.295 million joint revenue refunding bonds, series 2011E with an expected final maturity of Nov. 1, 2018. In addition, Fitch has affirmed $3.94 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.

KEY RATING DRIVERS:

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

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

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

--Carrier concentration: 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.

--High leverage: Debt per enplanement is expected to approach $200 in fiscal 2015 (ends 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.

--Lower natural gas revenues: 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.

WHAT COULD TRIGGER A RATING ACTION:

--Revenue growth needed: 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.

--Possible competition: 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 2011E bonds will be used to refund portions of the airport's outstanding series 2003C-1 and 2003C-2 bonds for nearly 12% in interest savings. In addition, the maturity of the bonds will not be extended.

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'. 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

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