Greater Orlando Aviation Authority gets S&P upgrade

Bonds

S&P Global Ratings upgraded the Greater Orlando Aviation Authority’s senior-lien airports facilities bonds to AA from AA-minus with a stable outlook Friday, citing Orlando International Airport’s growing enplanement counts.

“The upgrade reflects Orlando International Airport’s very high activity levels and long history of favorable enplanement trends supported by serving an expanding service area economy with strong visitor demand; demonstrated financial resiliency during periods of lower air travel demand, and our expectation that GOAA will maintain strong-to-very strong financial metrics considering future capital requirements,” said S&P Global Ratings Credit Analyst Joe Pezzimenti.

The stable outlook reflects S&P’s expecation the airport’s enplanements will remain high. It also stems from S&P’s belief the authority will adjust revenues, expenses, and capital spending as needed to maintain financial metrics S&P consider strong to very strong as it increases its debt to cover a large capital improvement plan.

S&P cited the Orlando International Airport’s growing enplanements in explaining the upgrade to AA.

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As of Sept. 30, the authority had $2.99 billion in revenue bonds outstanding, all but $90 million of which were airports facilities bonds.

For credit strengths, Pezzimenti also cited the airport’s “relatively diverse carrier mix” and “very experienced and effective management team.” He said he expected the authority to maintain debt service coverage from 1.6x to 2x, a debt to net revenue ratio below 10x, and unrestricted days cash on hand from 400 to 800.

S&P also raised the rating on the subordinate lien debt to AA-minus from A-plus.

The senior airports facilities bonds are rated Aa3 by Moody’s, AA-minus by Fitch Ratings, and AA by Kroll Bond Ratings Agency. Fitch improved the outlook to positive from stable in November. In January 2022 S&P upgraded it to AA-minus from A-plus.

The authority didn’t immediately respond to a request for a comment.

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