Moody’s, Standard & Poor’s, and Fitch have reaffirmed their ratings of Denver International’s (DEN) outstanding senior lien general airport revenue bonds. Only one agency changed its opinion on the airport’s outlook:
Fitch and Standard & Poor’s gave an A+ rating with a stable outlook; Moody’s gave an A1 rating, with a negative outlook, which had changed from stable.
“In February, the airport’s financial team introduced a 10-year financial strategy that included DIA’s capital improvement plan,” says Kim Day, manager of aviation for DEN “Having our ratings reaffirmed by all three agencies is a confirmation that we have a solid plan that allows us to grow and to meet the needs of the entire Rocky Mountain Region. We believe it also recognizes our core financial strengths, such as a strong, competitive airline market; positive traffic forecasts; coverage on our bonds; and cash on hand.
“We’ve tested our financial model and identified mitigation measures to protect us financially against another economic downturn,” Day continues, “and we purposely developed a plan that gives us the flexibility to take on additional capital projects if necessary.”
The three agencies issued their ratings and analysis this week ahead of the airport going to the bond markets next week to refinance up to $341M worth of existing GARBs. The airport is refinancing $194M in debt that is coming due, and it is choosing to refinance an additional $147M in an effort to lower costs through better interest rates.
“We are pleased that all three agencies have reaffirmed our bond rating, telling investors that they can continue to have confidence in Denver International Airport,” says Patrick Heck, chief financial officer for the airport. “This is a direct result of all of the hard work we’ve done over the years to strengthen our bond rating and it is a tremendous reflection of our 10-year financial strategy and commitment to fiscal responsibility.
“Our financial goals are simple: fiscal stability and growth; maintaining competitive operating costs for our airline partners; optimizing our existing resources; improved transparency; and better-informed decision making,” he continues. “Going forward, we will be working hard to get our costs even lower while maximizing our non-aviation revenues as much as possible to bolster our financial position prior to issuing bonds for our capital improvement plan.”
