Moody's Investors Service has upgraded the city of Kansas City, Mo., Aviation Department’s outstanding revenue bonds. Moody's ratings provide investors with a system of gradation by which relative creditworthiness of securities may be gauged.
The bonds, the Kansas City, Missouri Airport Enterprise’s General Improvement Airport Refunding Revenue Bonds, Series 2013A (AMT) and Series 2013B (Non-AMT), were upgraded to A1 from A2. Concurrently, Moody's upgraded to A2 from A3 the rating on the enterprise's Subordinated Taxable Airport Improvement and Refunding Revenue Bonds (Consolidated Rental Car Facility Project), Series 2005C.
“The Kansas City Aviation Department’s excellent financial work has been recognized with an upgraded credit rating,” said Pat Klein, director of aviation for the Kansas City Aviation Department. “This is timely as we prepare to address necessary improvements to modernize aging infrastructure. The upgrade has the potential to save millions of dollars on future projects.”
Moody’s report notes that the upgrade reflects continued improvement in key financial metrics such as debt service coverage ratios and liquidity. In addition, the report notes that the A1 senior lien rating incorporates the airport’s dominant market position in a diverse Midwest economic center, and the A2 subordinate rating reflects the bond’s subordinate position in the flow of funds and benefit from the first-in pledge on customer facility charges.
Moody’s bases its “stable” outlook on the expectation that the airport will either be able to implement the terminal redevelopment plan agreed to with the airline group or proceed with minimum capital repairs to the existing facilities that keep financial metrics near current levels through the end of the use and lease agreement in 2020.
