CHICAGO – The Minneapolis-St. Paul Metropolitan Airports Commission won an upgrade of its subordinate bond credit after a new review.
Standard & Poor's raised the rating on $648 million of subordinate debt to A-plus from A on Dec. 17 and affirmed the AA-minus assigned to $698 million of senior-lien bonds. The outlook on both credits is stable.
The upgrade stems from a May criteria change, said Standard & Poor's analyst Mary Ellen Wriedt.
Standard & Poor's said it published the criteria to provide additional transparency related to the assignment of issue credit ratings on U.S. public finance debt instruments of operating entities, including the assignment of issue credit ratings and on subordinated obligations of these entities.
The commission's ratings are based on our view of the solid air trade area economy, the airport's reasonable cost structure, stable financial performance, and limited debt plans.
"These factors are partially offset by the airport's market share concentration in Delta Air Lines," which operates a majority of flights, the rating agency said.
The airport operates four runways, 23,000 parking spaces, and two terminals - Lindbergh and Humphrey -- connected by a light-rail system that runs between the Mall of America and downtown Minneapolis.
About 27% of the airport's operating revenues come from parking fees, landing fees account for nearly 20%, and terminal rents 14%. Aeronautical revenues account for 39% of operating revenues.
A total of 29 carriers, including 23 that carry passengers, operate at the airport with Delta holding a 75% market share. The airline inherited the Northwest Airlines hub when it acquired the carrier in 2008. Northwest had been based in Eagan, Minn.
Sun Country and Southwest Airlines follow with a combined 10% share which has grown 60% over last five years. Delta is committed to maintaining its hub presence and certain flight levels under its airport use agreement that runs through 2020.
