Three credit rating agencies, Moody’s Ratings, S&P Global Ratings and Kroll Bond Rating Agency, LLC, (KBRA), assigned the Jacksonville Aviation Authority (JAA) ratings of A1, A and AA, respectively. Each company determined the JAA’s financial outlook as stable while it seeks a $230 million bond issuance for construction of a third concourse (Concourse B) at Jacksonville International Airport (JAX).
The positive ratings are expected to enable JAA to issue the bonds at more favorable rates, thereby lowering the authority’s costs. It’s the organization’s first time issuing public debt in nearly 20 years.
Moody’s attributed their A1 rating to the “airport’s dominant market position as the primary commercial service airport for Northeast Florida, supported by a large and growing origin-and-destination service area with limited nearby competition...The stable outlook reflects expectations that the JAA will maintain strong debt service coverage above 3.0x and liquidity levels above 600 days cash on hand while completing the Concourse B project without material cost overruns or delays.”
“These ratings signify the strong financial position of the JAA,” JAA CEO Mark VanLoh said. “This allows us to finance projects that matter to the Northeast Florida community such as the construction of Concourse B. Not only will it bring additional gates which are desperately needed, but new customer service amenities and great dining options for travelers.”
The S&P justified their A rating by stating that “the stable outlook reflects our expectation that the authority will maintain healthy financial metrics that are in line with the current forecast, supported by generally positive enplanements trends and no additional debt needs.”
“This bond issuance is a critical component for the financing of Concourse B,” JAA Board Chair David Hodges Jr said. “These strong ratings are the result of wise financial decision-making at all levels of the Aviation Authority management and staff.”
Added JAA Chief Financial Officer Ross Jones: “The strength of management, the current status of the Concourse B project and the Authority’s strong financial metrics are likely factors these agencies considered while issuing their guidance. We look forward to going out to the bond market and securing financing for the completion of our largest construction project in the last 20 years.”
With credit ratings now in place, the Aviation Authority will seek financing in the open bond market for Concourse B construction in early May.
