Press Release|Public Finance
KBRA Assigns A+ Rating, Stable Outlook to Allegheny County Airport Authority (Pittsburgh International Airport) Airport Revenue Bonds, Series 2025A (AMT) and Airport Revenue Bonds Series 2025B (Federally Taxable)
1 Apr 2025 | New York
KBRA assigns a long-term rating of A+ with a Stable Outlook to the Allegheny County Airport Authority, PA (Pittsburgh International AIrport) Airport Revenue Bonds, Series 2025A (AMT) and Airport Revenue Bonds, Series 2025B (Federally Taxable), and affirms the A+ rating and Stable Outlook on outstanding Airport Revenue Bonds.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
Credit Positives
- ACAA’s proactive leadership team is focused on maintaining competitive airline costs by maximizing non-airline revenue sources, attaining operating efficiencies and maintaining expense controls.
- An absence of airline concentration, the availability of unique non-aviation revenue sources which can be applied on a discretionary basis, and the origin and destination nature of Airport activity enhance operating and revenue stability.
- Pittsburgh’s diversified regional economy benefits from a young, well-educated workforce, low unemployment, and expansion in strategic employment sectors. A lack of population growth somewhat offsets these positive demographics.
Credit Challenges
- Projected leverage is very high. Debt metrics are expected to remain elevated throughout the 2025-2030 forecast period.
- A rising CPE could discourage service expansion or retention, particularly for LCCs and ULCCs.
- Certain revenues that may be deemed “Other Pledged Revenues” under the Master Trust Indenture, including revenues from gas drilling and various grant programs, have proven to be volatile.
- 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.
- Though not anticipated, further escalation in TMP and ARP construction cost or project delays.
- A pause or reversal in enplanement recovery, triggering significant increases in airline costs.
- Issuance of additional debt without an identified source of repayment.
To access ratings and relevant documents, click here.