Fitch Ratings affirmed Monday the “B-” rating of the Commonwealth Ports Authority's $14 million airport revenue bonds issued in 1998 and revised the bond rating outlook from “stable” to “positive.”
The series 1998A bonds are secured by a pledge of gross airport revenues generated by the operations of the airport.
Fitch Ratings is a global rating agency.
According to the latest rating, the positive outlook reflects CPA's improved financial flexibility resulting from increased airport utilization and growth in pledged revenues and balance sheet liquidity.
Fitch indicated that enplanements strongly rebounded by nearly 26 percent in fiscal year 2012, erasing the loss experienced in fiscal year 2011. It also noted the CNMI's prospect of getting multiple airlines to begin and increase service levels.
Fitch cited that the CPA management's actions in fiscal 2009 to increase airline rates have also resulted in improved net revenues with coverage increasing well above the 1.25 debt service requirement. Leases also increased in fiscal year 2012 and the construction of a new Aircraft Rescue and Fire Fighting Training Center is projected to further help the financial flexibility of the ports authority.
Other CPA projects that have been cited as potential sources of revenues include the regional ARFF training facility, which costs $17 million; the main runway rehabilitation that is ongoing; the installation of new generators for the terminals; tower and airport fire station; and other renovation projects for the Commonwealth's three airports. The bulk of these projects are funded by Federal Aviation Administration grants.
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