Long Beach Airport had its outlook revised to stable from negative by Moody’s Investors Service ahead of plans to price $113 million in airport revenue and refunding bonds.
Enplanements at the southern California regional airport dove more than at other U.S. airports during the pandemic because Long Beach was a major hub for JetBlue Airways, which ceased operations in October 2020, Moody’s analysts wrote in the ratings report Friday.
JetBlue was the airport’s dominant carrier, with 55% of enplanements in fiscal year 2019, but Southwest Airlines has largely backfilled this capacity, supporting Moody’s “expectation of a normalized, it not expanded, air service profile going forward,” analysts wrote.
Moody’s assigned an A3 rating to the upcoming bonds and affirmed the same rating on the airport’s existing debt. The A3 reflects the increase in service from Southwest, the modestly below-average, but improving enplanement recovery, which will reach pre-COVID-19 levels in fiscal year 2023 and Moody’s expectation for stable airline costs along with financial metrics that will be sustained in line with historic levels, analysts wrote.
The
In the two years since, the airport’s financial position has improved, and debt service savings still exist for bond refunding, according to a
The Long Beach City Council is slated to vote Tuesday on the deal planned for June. If the city council approves it, lead manager Morgan Stanley would price the debt in three tranches with two series of airport revenue refunding bonds of $48.8 million and $33.7 million and one tranche of new money airport revenues bonds of $30.9 million. Cabrera Capital and RBC are co-managers.
The city anticipates $6.6 million in net present value savings on the refunding, according to the report. The new money would help pay for terminal improvements, a baggage inspection facility and ticketing facility.
On Friday, Fitch assigned an A-minus rating with a stable outlook to the bonds and affirmed an A-minus on the $96 million in existing parity revenue bonds. Fitch had revised the airport’s outlook to stable from negative on March 17, citing “steady passenger recovery trends as well as prudent financial and debt management through the pandemic.”
The current five-year capital improvement program (CIP) through 2024 totals $232 million and consists primarily of runway and taxiway reconstruction and terminal area projects, Fitch said. The program is financed by a mix of grants, passenger facility charges, customer facility charges and airport cash flow, with the 2022C bonds the only additional debt required for the CIP, Fitch said. The airport is
