KBRA Assigns AA Rating, Stable Outlook to the Cities of Dallas and Fort Worth, TX Airport Joint Revenue Refunding and Improvement Bonds
26 Aug 2025 | New York
KBRA assigns a long-term rating of AA to the Joint Revenue Refunding and Improvement Bonds Series 2025A-1 (AMT), Joint Revenue Refunding and Improvement Bonds Series 2025A-2 (AMT) and Joint Revenue Refunding and Improvement Bonds Series 2025B (Non-AMT) issued by the Cities of Dallas and Fort Worth, TX ("the Cities") on behalf of Dallas/Fort Worth International Airport ("DFW" or "the Airport"). Concurrently, KBRA affirms the long-term AA rating on outstanding Joint Revenue and Improvement Bonds previously issued by the Cities on behalf of the Airport. The Outlook is Stable.
Joint Airport Revenue and Improvement Bonds are payable from and secured by an irrevocable first lien on and pledge of the Airport's gross revenues. Proceeds of the Series 2025A-1 (AMT), Series 2025A-2 (AMT) and Series 2025B (Non-AMT) Bonds will pay the cost of capital improvements at the Airport, refund certain outstanding Subordinate Lien Obligations (commercial paper notes), fund the Debt Service Reserve Requirement and pay issuance costs.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
Credit Positives
- Sizable and growing regional population and employment base, facility and capacity advantages, and central geographical location contribute to DFW’s status as a fortress hub and sustain its competitive position.
- Experienced leadership team demonstrates strong financial and operational management, and is effectively executing the ambitious, recently expanded Capital Improvement Plan.
- Significant non-airline activity diversifies Airport revenues, provides for discretionary capital funding, and is expected to help to keep airline costs competitive despite increases in operating and capital expenditures through FY 2030.
Credit Challenges
- Further increases in currently high debt per enplanement and maximum annual debt service per enplanement are anticipated as up to $10.0 billion in additional debt is issued through FY 2030.
- Budget exposure exists for the Terminal F program, which increased from $1.7 billion to $4.0 billion since FY 2024 to accommodate a more than doubling of gates.
- While American Airlines' DFW hub commitment underpins demand, the Airport’s high exposure to a single carrier’s strategy presents material event risk.
Rating Sensitivities
For Upgrade
- Ongoing population growth and strong local economic performance that drives growth in O&D enplanements and non-airline revenues as debt is amortized.
- Timely completion of planned capital projects, with lower than anticipated related airline costs.
For Downgrade
- An unanticipated lack of enplanement growth due to waning passenger demand and/or reduced airline capacity that leaves DFW overcapitalized relative to its needs for a time.
- While highly unlikely, a sharp or sustained reduction in American’s daily connection banks at DFW and/or a diminishment in the importance of DFW as an American Airlines fortress hub.
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