KBRA Affirms Ratings for Metropolitan Nashville Airport Authority Airport Improvement Revenue Bonds (Senior Lien) at AA- and Subordinate Airport Revenue Bonds at A+; Stable Outlook
1 Nov 2024 | New York
KBRA affirms the long-term ratings of AA- and A+, with a Stable Outlook, for the Metropolitan Nashville Airport Authority's ("MNAA" or the "Authority") Senior Airport Improvement Revenue Bonds and Subordinate Airport Improvement Revenue Bonds, respectively.
The rating affirmation for the Authority's airport revenue bonds reflects the strength of Nashville International Airport, which serves an economically strong air service area with rapidly growing enplanements and a sizable origin and destination market, in addition to maintaining ample debt service coverage and liquidity. Offsetting these credit strengths is an ongoing large capital development program that requires substantial borrowing through 2027.
A surveillance report will follow.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Strong air service area, supported by a growing population and expanding economy with a large institutional presence (state capital, higher education, and health care).
- Established trend of strong enplaned passenger growth.
- Well-maintained financial operations characterized by abundant coverage and considerable liquidity.
Credit Challenges
- Large, planned capital program; entails milestone and completion risk.
- Sharp rise in outstanding debt is likely to increase fixed cost component of the financial structure.
Rating Sensitivities
For Upgrade
- Significant progress in meeting capital milestones within budget and with limited impact on debt and financial metrics.
- Secular decline in enplaned passenger activity.
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