KBRA Affirms BBB Rating with Stable Outlook for Susquehanna Area Regional Airport Authority (SARAA) Airport System Revenue Bonds
6 Oct 2023 | New York
KBRA affirms the long-term rating of BBB with a Stable Outlook for the Susquehanna Area Regional Airport Authority's (SARAA) Airport System Revenue Bonds.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
- Experienced management team with demonstrated ability to maintain balanced financial operations.
- Stable and diversified local economy anchored by the capital of the Commonwealth.
- Diverse carrier mix with stable O&D base prior to the pandemic.
- Very high debt levels.
- Significant geographic competition due to proximity to major commercial airports.
- Vulnerability to airline decisions which may impact airport operations.
- 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.
- Leisure passenger traffic at MDT grows materially, stimulated by Low Cost Carrier (LCC) and Ultra Low Cost Carrier (ULCC) expansion and/or organic growth of leisure demand in the Harrisburg area.
- 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.