FITCH RATINGS, INC. AFFIRMS JACKSON MUNICIPAL AIRPORT AUTHORITY’S AIRPORT REVENUES AT ‘BBB+’; OUTLOOK STABLE
Fitch Ratings has affirmed Jackson Municipal Airport Authority’s (JMAA) approximately $12 million airport revenue bonds at ‘BBB+’. The Rating Outlook remains Stable.
Some of the key elements used to determine JMAA’s rating and outlook include:
- The Jackson – Medgar Wiley Evers International Airport is the primary service provider for the Mississippi state capital region, serving mostly business oriented travelers.
- The airport leadership is in the process of revising its capital improvement plan to focus on revenue-generating projects and vital airport maintenance.
- JMAA’s debt is entirely fixed rate with standard rate and issuance covenants of 1.25 times. The flat debt service profile maintains annual payments of approximately $3 million through 2026 before decreasing to the mid-$1 million range through final maturity in 2035.
- JMAA has a strong financial profile, maintaining a low leverage of 2.6 times net debt-to-fiscal 2015 cash flow available for debt service (CFADS) and had approximately $16.2 million of unrestricted cash and operating reserves, equivalent to 467 days’ cash on hand.
- Commercial airline traffic for Fiscal Year 2016 remains stable. Airlines have increased flights and capacity, JMAA is in discussions with potential new carriers to provide additional service.
- The airport is reviewing their concession strategy to improve non-airline revenue generation and capitalize on passenger traffic throughout the airport, which Fitch believes is important to remain cost effective to current airlines.
- Operating expenses decreased approximately 10% in fiscal 2015 to $12.7 million.
- JMAA refunded its previously outstanding 2005 A & B revenue bonds with a direct placement in 2015. The transaction provided the airport with Net Present Value savings of $3.7 million. The transaction will not affect the average life of the outstanding debt; it will simply reduce respective annual debt service requirements through maturity in 2031 & 2035.
JMAA’s Chief Executive Officer, Carl D. Newman, A.A.E., stated, “I was pleased to see the efforts we have undertaken to plan, direct and manage our assets have been validated by Fitch’s rating team. JMAA’s Strategic Plan 2021, launched earlier this year, will help to ensure that the key factors for our success are sustained, and our goals and objectives are achieved.”