Press Release|Public Finance
KBRA Affirms A+ Rating for Allegheny County Airport Authority, PA (Pittsburgh International Airport) Airport Revenue Bonds; Outlook Stable
17 Sep 2024 | New York
KBRA affirms the long-term rating of A+ for Airport Revenue Bonds of the Allegheny County Airport Authority, PA (Pittsburgh International Airport). The Outlook is Stable.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Proactive leadership team focused on maintaining competitive airline costs through revenue diversification, innovative pricing structures, operating efficiencies, and expense controls.
- Absence of airline concentration, unique non-aviation revenue sources which can be applied on a discretionary basis, and the origin and destination nature of Airport activity aid in stability.
- The diversified regional economy benefits from a young, well-educated workforce, low unemployment, and growth in strategic employment sectors. A lack of population growth somewhat offsets these positive demographics.
Credit Challenges
- Projected leverage is high and debt metrics are expected to remain elevated throughout the forecast period.
- Certain revenues that may be deemed “Other Pledged Revenues” under the Master Trust Indenture are volatile.
- Operating losses in each of the past four years reflect disproportionately high operating expenses, components of which are expected to decline with the opening of the new terminal.
- The Authority is expected to remain heavily reliant on non-operating revenues, including Gaming Act Revenues, Gas Drilling Revenues and Federal and State grants.
Rating Sensitivities
For Upgrade
- Recognition of anticipated operating cost savings and maintenance of manageable airline costs.
- Full recovery in enplanements and subsequent sustained growth that results in sound coverage margins (taking into consideration the residual nature of rates), and moderate airline costs.
For Downgrade
- A lack of attainment of projected operating cost reductions, airline costs, or enplanement levels upon completion and operation of the TMP and ARP projects.
- Further unanticipated escalation in TMP and ARP construction cost or project delays.
- A pause or reversal in enplanement recovery, triggering significant increases in airline costs.
To access rating and relevant documents, click here.