KBRA Assigns AA+ Rating, Stable Outlook to City of Atlanta, GA Airport General Revenue Bonds
19 Aug 2025 | New York
KBRA assigns a long-term rating of AA+ to the City of Atlanta, Georgia Airport General Revenue Bonds, Series 2025A (Non-AMT) and Series 2025B (AMT) issued for Hartsfield-Jackson Atlanta International Airport. Concurrently, KBRA affirms the long-term rating of AA+ assigned to outstanding General Airport Revenue Bonds and Passenger Facility Charge (PFC) Subordinate Lien Airport General Revenue Bonds. The Outlook on all debt is Stable.
Airport General Revenue Bonds (GARBs) are secured by a pledge of net General Revenues, while the Airport Passenger Facility Charge (PFC) and Subordinate Lien Revenue Bonds (Hybrid PFC Bonds) are secured by a senior lien on PFCs and a subordinate lien on net General Revenues. KBRA makes no rating distinction between the GARBs and Hybrid PFC Bonds given the strength of debt service coverage on both liens and the subordinate pledge of airport net revenues available to pay Hybrid PFC debt service, if needed. As of June 30, 2024, approximately $2.1 billion and $1.4 billion of GARBs and Hybrid PFC Bonds, respectively were outstanding.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Expansive, vibrant and economically diverse air trade area generates strong demand for air travel.
- Robust utilization, in part driven by an advantageous geographic location and physical layout that economically supports Delta Air Lines’ largest connecting hub operations.
- Healthy financial performance and debt service coverage, with considerable capacity to absorb planned debt issuance related to the ATLNEXT capital program.
Credit Challenges
- Significant financial and operational reliance on Delta and its regional partners, though mitigated by Delta’s favorable financial position and the critical nature of the Airport to the carrier’s network operations.
- Continued high, though moderating, dependence on connecting traffic which exposes the Airport to the operating needs and decisions of the airlines rather than local market forces.
- Various risks associated with implementing a large, multi-phase capital plan including an expected significant increase in leverage.
Rating Sensitivities
For Upgrade:
- Completion of ATLNEXT projects on-time and on-budget, with financial metrics exceeding forecast.
For Downgrade:
- While a remote prospect, the permanent loss in passenger volumes leading to non-competitive airline costs, impaired liquidity and materially weakened debt service coverage.
- Material increases in ATLNEXT costs beyond current estimates, resulting in heightened leverage and weakened debt and financial metrics
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