Citing low costs to airlines and strong local demand for air service, Moody’s Investors Service this week assigned an Aa3 rating to Phoenix Sky Harbor International Airport’s senior lien bonds and affirmed the Airport’s outstanding senior (Aa3) and junior (A1) liens.
Standard and Poor’s Ratings Services (S&P) also affirmed its ‘AA-’ rating on the Airport’s senior lien, as well as its ‘A+’ rating on the Airport’s junior lien bonds.
“The ratings on PHX reflect our opinion of the airport's very strong enterprise risk and financial risk profiles,” said S&P Global Ratings credit analyst Andrew Bredeson, who was quoted in an Oct. 16, news release from S&P Global Ratings. “The very strong enterprise risk profile reflects the large hub airport's strong demand base and level of origin and destination enplanements, and good pricing power, supported by a lack of significant competition within the primary service area and a history of maintaining a competitive cost structure,” Mr. Bredeson added. S&P further cited “extremely strong management and governance” supported by management’s track record of meeting or exceeding its financial targets.
“As the largest economic engine in Phoenix, Sky Harbor is one of our most valuable assets, said Phoenix Mayor Thelda Williams. “This new rating reaffirms Sky Harbor as a world class airport that attracts new investments to the region and strengthens our growing global economy.”
A high bond rating means the airport pays lower interest rates when it borrows funds for airport improvements and modernization projects. Phoenix Sky Harbor is currently in the midst of a $2 billion capital improvement program which includes the modernization of Terminal 3, the extension of the PHX Sky Train® to the Rental Car Center and construction of an eighth concourse at Terminal 4, which will be occupied by Southwest Airlines. The Moody’s and S&P ratings reflect the Airport's ability to move forward with the capital plan while maintaining competitive airline costs.
