Orlando International Airport Receives Four AA Ratings From Bond Agencies – Senior management, leadership cited as top strength

Press Release

ORLANDO, FL. — The Greater Orlando Aviation Authority (GOAA) received high marks from the nation’s top bond rating agencies in regards to its Series 2019A Airport Facilities Revenue Bonds (Bonds). Investors may rely on rating agencies to determine the credit worthiness of an organization.

Orlando International Airport continues to be one of the highest ranked airports in finance in the industry following recently-released rankings from Fitch, S&P, KBRA and Moody's. Beyond high ratings, Fitch also elevated GOAA's outlook from Stable to Positive on outstanding senior lien airport facilities revenue bonds and outstanding subordinate lien airport facilities revenue bonds.

The following ratings reflect the strength of Orlando as one of the preeminent origin and destination markets in the United States with an increasingly diversified economic base:

KBRA AA Outlook: Stable
Fitch AA- Outlook: Positive
S&P AA- Outlook: Stable
Moody’s Aa3 Outlook: Stable

"The Aviation Authority prides itself on always balancing fiscal responsibility and capital management with customer service and satisfaction," said Phil Brown, GOAA's Chief Executive Officer. "Also, we are pleased that the agencies share our confidence in the long-term viability of the Orlando market."

Key Rating Drivers

  • Skilled, strong executive leadership
  • Leading Origination & Destination market
  • Stable traffic base
  • Diverse carrier mix
  • Competitive cost structure
  • Stable financial operations

The Series 2019A Bonds are being issued for the purpose of providing funds to: (a) finance $1.1 billion of the costs for Phase 1 and Phase 1 Expansion of the South Terminal Complex, (b) funding approximately $148 million in other capital improvements, (c) deposit to the Composite Reserve Subaccount of the Debt Service Reserve Account, (d) pay capitalized interest, (e) repay draws made on certain Existing Lines of Credit, and (e) pay certain costs of issuance of the Series 2019A Bonds. The Authority anticipates pricing the bonds on or about September 19, 2019.

2019 Bond Rating Report Highlights

“Among their report highlights, the agencies cited GOAA’s strong management team, terminal facility efficiencies, unique air service market and the diversity of the local economy as support for our high ratings,” said Kathleen Sharman, the Aviation Authority’s Chief Financial Officer.

Below are excerpts from each report:

S&P

  • “Our enterprise risk profile assessment considered MCO’s favorable demand characteristics with limited competition from other airports.”
  • “Extremely strong management and governance, reflective of financial planning and risk management practices we consider fiscally prudent and effective, and a management team we consider very experienced and capable in operating an airport the size and scale of MCO.”
  • “The area’s economy is also diversifying; the ongoing development of a large medical complex has increased employment in research, medical care, and education.”
  • "Despite a large Capital Improvement Program, we believe MCO maintains good pricing power. A history of prudent cost management supports this view."

Moody’s

  • “The credit ratings of the Greater Orlando Aviation Authority reflect Orlando International Airport’s near-monopoly position for air travel into one of the primary tourism destinations in the world,
    supplemented by a rapidly diversifying economy with a large health care presence and several universities.”
  • “The airport has maintained its dominant market position in the Central Florida region, with minimal competition from smaller airports having a negligible effect on demand for air service.”
  • Cites the diversity of Orlando International’s carrier mix: 39 passenger airlines, including four U.S. legacy airlines, one regional airline, two low cost carriers, three ultra-low cost carriers, and 29 foreign flag airlines.

Fitch

  • In discussing the rates by resolution, Fitch said “the new agreements better accommodates GOAA’s increasing passenger growth, facilitates consistency in terminal costs across the North
    and South Terminal facilities, and moves towards more efficient gate use via priority gate access instead of assigning gates on a preferential use basis.”
  • “Cost per Enplaned passenger rises to the $15 range, which remains low compared to peers and is viewed as reasonable for the traffic profile of the airport.”

KBRA

  • “KBRA believes that Orlando International Airport benefits from a unique air service market that features a substantial leisure and hospitality component, a rapidly growing population, and an expanding and diversifying economy.”
  • “The Stable Outlook reflects KBRA’s expectation that the air trader area will continue to grow and diversify, enplaned passenger trends will remain steady to increasing, there will be no  ignificant increases in borrowing beyond what is currently expected, and debt service margins will remain at historical levels.”
  • When specifically naming Phil Brown, Stan Thornton, GOAA'S Chief Operating Officer, and Kathleen Sharman, KBRA stated: "In KBRA's opinion, Authority management exhibits strong capabilities in operating one of the nation's fastest growing airports. Management in long-tenured with MCO experience supplemented by time at other airports and other transportation and sector agencies."

Basic MCO Information: With more than 49 million annual passengers, Orlando International Airport (MCO) is the busiest airport in Florida and 10th busiest in the U.S. MCO is currently engaged in a $4.2 billion Capital Improvement Program to increase capacity and enhance customer convenience.