Press Release|Public Finance
KBRA Affirms AA- Rating with Stable Outlook for the City of Houston, TX Airport System Subordinate Lien Revenue Bonds
23 May 2024 | New York
KBRA affirms the long-term rating of AA- with a Stable Outlook to the City of Houston, TX Airport System Subordinate Lien Revenue Bonds.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Large and growing catchment area and strategic mid-continent location support origin and destination (O&D) and connecting activity.
- Finanacial operations are characterized by abundant liquidity and ample debt service coverage margins.
- Carrier yields are well above United and Southwest respective system averages.
Credit Challenges
- High concentration of United Airlines and Southwest Airlines as primary carriers at Intercontinental and Hobby, respectively.
- Non-airline revenues on a per enplanement basis are low.
Rating Sensitivities
For Upgrade
- Sharp increase in passenger activity, while maintaining current liquidity levels and improving debt metrics
For Downgrade
- Reduction/elimination of hubbing operations by United Airlines
To access rating and relevant documents, click here.