Tucson, Ariz. (July 1, 2013) - In a report issued June 27, Moody's Investors Service affirmed the Tucson Airport Authority's (TAA) underlying rating on approximately $58 million in subordinate lien revenue bonds at "A2." The rating outlook is stable.
Moody's rating rationale reflects a robust liquidity profile, strong financial metrics and limited capital requirements over the next several years. Moody's notes TAA's leverage has decreased meaningfully in the last two and a half years as a result of retirement of two senior lien bond issues and that total airport debt service in fiscal year 2014 will be approximately half of what it was in fiscal year 2013.
Moody's reports states that TAA's Capital Improvement Program for Tucson International Airport over the next five years is modest and includes no debt issuance needs, due to expected funding from federal and state grants. Moody's further cites TAA's prudent management of operations and historical ability to manage revenue declines with offsets in operating expenses.
"Under the leadership of our Board of Directors, TAA has developed and maintained strong financial policies," said Dick Gruentzel, Vice President of Administration & Finance/CFO.
"These policies have served us particularly well over the last five years as revenues have declined for TAA, as well most medium and small airports, as a result of the economic recession and major changes in the airline industry. Throughout this difficult period, we are proud to have maintained our solid credit ratings."
Earlier this week, Fitch ratings affirmed TAA's bonds at "A," also with a stable outlook.