FOR IMMEDIATE RELEASE: June 10, 2004
City receives vote of confidence from Moody’s
Moody’s Investor Service has submitted optimistic ratings for the City’s sale of $27 million in airport revenue bonds today.
The bonds are being issued to refund approximately $36 million in aggregate outstanding bonds from the 1994A General Improvement Airport Bond Issue. The sale will generate an estimated net present-value savings of $4.6 million, or 13 percent of refunded bonds.
"This vote of confidence speaks well for the airport and the City,” City Manager Wayne Cauthen said.
"Among other things, Moody’s cites the airport’s solid operational characteristics and sound management as positive credit trends,” Cauthen said.
Moody's assigned an underlying A1 rating and stable outlook to the City’s $27 million General Improvement Airport Refunding Revenue Bonds, Series 2004E. The bonds are secured by a pledge of net revenues from the airport system. In conjunction with this rating assignment, Moody's also upgraded the underlying rating on $244 million outstanding parity airport revenue bonds to A1 from A2.
The bonds will be insured and are expected to be rated Aaa based on the financial strength of the insurer. The bonds are being offered through a competitive sale today.
According to Moody’s, the rating upgrade reflects the following positive credit trends:
The continued strong liquidity position of the airport system, with more than $180 million of cash, short-term investments, and operating reserves following a period of decreasing airline passengers and severe financial stresses in the airline industry;
A diverse array of airlines with Southwest Airlines (rated Baa1) as the dominant airline with plans to expand its operation with the completion of renovated gates in December 2004;
Diversity of revenues, which includes airline revenues representing only 24 percent of total operating revenues;
No future parity bond financings to fund the capital improvement program estimated to cost $410 million through fiscal year 2012;
The stable service area of a primarily origination and destination airport;
Solid airport operational characteristics and sound management.
Kansas City International Airport had a 9.5 percent increase in passenger boardings in April 2004 from April 2003. Year-to-date boardings reflect a 4 percent increase from the same period last year.