Press Release|Public Finance
KBRA Affirms A+ Rating to Allegheny County Airport Authority (Pittsburgh International Airport); Outlook is Stable
27 Jul 2023 | New York
KBRA affirms the long-term rating of A+ with a Stable Outlook to the Allegheny County Airport Authority (Pittsburgh International Airport) Airport Revenue Bonds.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Innovative leadership team that is focused on maintaining competitive airline costs through revenue diversification, new product offerings and pricing structures, and expenditure 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 relatively young, highly educated workforce, low unemployment, and growth in strategic employment sectors, although persistent population decline somewhat offsets these positive demographics.
Credit Challenges
- The Authority is exposed to construction risk and execution risk on the $1.35 billion TMP.
- Projected leverage is high and debt metrics are expected to be stressed throughout the forecast period.
- Certain revenues that may be deemed “Other Pledged Revenues” under the Master Trust Indenture are volatile.
Rating Sensitivities
For Upgrade
- Completion of the TMP and concurrent projects on time and within budget, enabling recognition of anticipated operating cost savings and maintenance of manageable airline costs.
- Strong traffic recovery and subsequent sustained growth that results in reasonable coverage margins and moderate airline costs.
For Downgrade
- Construction cost escalation or delays that entail significant cost overruns.
- Weak recovery in passenger traffic necessitating significant increases in airline costs.
To access rating and relevant documents, click here.