KBRA Affirms BBB Rating for Susquehanna Area Regional Airport Authority Airport System Revenue Bonds

2 Oct 2024 | New York

KBRA affirms the long-term rating of BBB with a Stable Outlook for the Susquehanna Area Regional Airport Authority Airport System Revenue Bonds.

The rating was affirmed because of the following key credit considerations:

Credit Positives

Diverse carrier mix with stable O&D base.
Experienced management team with demonstrated ability to maintain balanced financial operations.
Stable and diversified local economy anchored by the capital of the Commonwealth.

Credit Challenges

Very high debt levels.
Significant geographic competition due to proximity to major commercial airports.
Vulnerability to airline decisions which may impact airport operations.

For Upgrade

Reduced leverage metrics accommodated by further amortization and limited future borrowing.
Significant commercial and industrial development within the Airport’s primary service area leading to a higher base level of demand for air service.
Sustained growth in leisure passenger traffic at MDT, stimulated by Low Cost Carrier (LCC) and Ultra Low Cost Carrier (ULCC) expansion and/or organic growth of leisure demand in the Harrisburg area.

For Downgrade

Withdrawal of an air carrier at MDT, including one of the three legacy carriers, which results in a permanent loss of enplanements and associated revenues.
Additional indebtedness without commensurate growth in sources of repayment and/or a trend of weakening liquidity.

To access rating and relevant documents, click here.