KBRA Affirms AA+ Rating, Stable Outlook for City of Atlanta, GA GARBs and PFC and Subordinate Lien GARBs
18 Jul 2025 | New York
KBRA affirms the long-term rating of AA+ on the City of Atlanta's (the "City's") Airport General Revenue Bonds and Passenger Facility Charge (PFC) Subordinate Lien Airport General Revenue Bonds. The Outlook on all debt is Stable.
Airport General Revenue Bonds (GARBs) are secured by a pledge of net General Revenues, while the Airport PFC and Subordinate Lien GARBs (Hybrid PFC Bonds) are secured by a senior lien on PFCs and a subordinate lien on net General Revenues. KBRA makes no rating distinction between the GARBs and Hybrid PFC Bonds given the strength of debt service coverage on both liens and the subordinate pledge of airport net revenues available to pay Hybrid PFC debt service, if needed. As of June 30, 2024, approximately $1.84 billion and $1.41 billion of GARBs and Hybrid PFC Bonds, respectively, were outstanding.
The City expects to issue additional debt later in 2025 to fund various projects included in its multi-year, $11.1 billion ATLNext Capital Plan. In conjunction with such issuance, KBRA will publish a Rating Report.
Key Credit Considerations
Credit Positives
- Expansive, vibrant and economically diverse air trade area.
- Robust utilization, in part driven by an advantageous geographic location that supports an airline hub.
- Healthy financial performance and debt service coverage, with still considerable debt capacity.
Credit Challenges
- Significant reliance on Delta and its regional partners.
- Continued high, though moderating, dependence on connecting traffic.
- Various risks associated with implementing a large, multi-phase capital plan.
The Stable Outlook reflects KBRA's expectations that ATLNEXT will continue to be prudently implemented, with operating performance, DSC and liquidity benefiting from continued growth in passenger related revenues. KBRA believes that components of ATLNEXT, which focus on replacing critical systems and infrastructure, increasing capacity, and enhancing the customer experience, serve to reinforce ATL’s profile as an essential hub for Delta and the U.S. air system more broadly.
Rating Sensitivities
For Upgrade
- Completion of ATLNEXT projects on-time and on-budget, with financial metrics exceeding forecast.
For Downgrade
- While a remote prospect, the permanent loss in passenger volumes leading to non-competitive airline costs, impaired liquidity and materially weakened DSC.
To access ratings and relevant documents, click here.