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Manchester-Boston Airport bond rating takes another hit

New Hampshire Union Leader

May 16. 2014 12:53AM

The Manchester-Boston Regional Airport has been handed another bond downgrade.

The credit agency Moody’s Investment Services downgraded the airport’s bond rating from A3 to Baa1 with a stable outlook.

An airport’s bond rating is based on a number of factors, like passenger acitivty and facility upgrades and accommodations. The rating is supposed to give present and future investors and bond issuers a general idea of the financial stability of the airport — including the facility’s ability repay bonds. Lower bond ratings have the possibility of increasing interest rates on future bonds.

Moody’s said the downgrade reflects a “weakened market position of the airport caused by operational changed of network carriers in the U.S. towards service into dominant regional airports with larger aircrafts.” Moody’s said the airport’s heavy reliance on Southwest Airlines also played into the downgrade. Currently, 57.4 percent of planes at the airport are owned and operated by Southwest, according to Moody’s.

This isn’t the first time the airport has had its bond rating downgraded. Last year, the credit agency Fitch downgraded its bond rating from A- to B+++ with a negative outlook.

At the time of that downgrade, airport deputy director Brian O’Neill said the airport would be challenging the negative outlook and thought the downgrade was a reflection of just passenger activity and not other aspects of the airport.

O’Neill told the New Hampshire Union Leader last year that the Fitch downgrade would not affect the airports current $174.2 million outstanding bonds and the airport was only planning to refinance — as scheduled — in 2015.

It is unclear whether the latest downgrade will affect the refinancing schedule.

On Thursday, Mayor Ted Gatas said he saw the downgrade as an attempt by Moody’s to become consistent with other bond ratings already issued on the airport and that he wasn’t worried.

“Activity is on the increase,” said Gatas. “I’m looking forward to the improvements at the Manchester Airport. Things are appearing to be better. I’m sure it’s just a temporary thing.”

Calls to Tom Malafronte with the Manchester-Boston Regional Airport went unanswered late Thursday.

Manchester Transportation

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