S&P bond rating upgrade more good news for Houston Airports

In a report released August 5, 2015, Moody's Investors Service upgraded the subordinate lien rating of the Airport System to A1 and affirmed the Aa3 senior lien rating and the A2 inferior lien rating.

Feb. 12, 2016

HOUSTON — Standard and Poor’s Ratings Services has upgraded its bond rating for the Houston Airport System from ‘A’ to ‘A+’ with a stable outlook. The rating agency also affirmed its ‘AA-’ long-term rating on the airport system’s subordinate-lien bonds and its ‘AAA/A-2’ ratings on the system’s existing joint criteria variable rate demand obligation debt. The outlook for the long-term rating is also stable.

In announcing the rating upgrade, S&P cited the Houston Airport System’s:

Strong market position in a large, growing, and diversifying service area

Strong liquidity, as of June 30, 2015, of $457 million or approximately 591 days' cash

Experience with capital program implementation and the planned investment in facilities by United Airlines Inc.

A news release from the rating agency stated, “the stable outlook reflects our expectation that during the next two years enplanement levels will be stable or trend higher and that the system’s capital improvement plan and associated debt needs will prove manageable in terms of financial resources.”

“Both George Bush Intercontinental Airport and William P. Hobby Airport are poised for continued growth and success,” said Mario Diaz, the Director of the Houston Airport System. “This upgrade from Standard and Poor’s is reflective of our team’s responsible fiscal management.”

Both Bush Intercontinental and William P. Hobby Airport reached all-time highs in 2015 in regards to overall passenger totals. Collectively, the two commercial airports accommodated more than 55 million passengers in 2015, an unprecedented total in the history of the two facilities and an increase of almost four percent over the 2014 record-setting mark.

This is the second time in less than a year that the Airport System has seen good news on its financial standing. In a report released August 5, 2015, Moody's Investors Service upgraded the subordinate lien rating of the Airport System to A1 and affirmed the Aa3 senior lien rating and the A2 inferior lien rating.

Moody’s also classified the Airport System issuer outlook as stable “based on our expectation that the local economy will continue to see moderated growth, that the system will manage construction in a way that minimizes cost and schedule overruns, and additional leverage will be added in a prudent and measured pace.”

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