Fitch downgrades T.F. Green bonds

Rating agency Fitch Ratings has downgraded the R.I. Airport Corporation’s airport revenue bonds from A- to BBB+ and changed its rating outlook to “stable,” the agency announced Tuesday afternoon. More

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Fitch downgrades T.F. Green bonds

BLOOMBERG FILE PHOTO/SCOTT EELLS
FITCH RATINGS LTD. downgraded the R.I. Airport Corporation's airport revenue bonds from A- to BBB+.
Posted 6/12/13

NEW YORK – Rating agency Fitch Ratings Ltd. has downgraded the R.I. Airport Corporation’s airport revenue bonds from A- to BBB+ and changed its rating outlook to “stable,” the agency announced Tuesday afternoon.

The downgrade of the senior lien general airport revenue bonds came in response to T.F. Green Airport’s preparations to increase its senior lien parity debt borrowings. The debt could lead to higher costs for airlines.

The airport has faced reduced air traffic in recent years as well as the continued expansion of Logan Airport in Boston. Fitch said T.F. Green’s reliance on Southwest Airlines, which makes up half the airport’s flights, is too riskily high a concentration.

Fitch’s “stable” rating indicated that the agency believes Rhode Island’s airport will soon hit a sustainable level of air traffic.

Some of the airport’s debt will go to fund new infrastructure projects over the next couple of years through the airport’s $237 million capital plan, according to the Fitch report.

Fitch’s report noted that continuing passenger boarding losses — enplanements fell from 2.9 million in fiscal 2005 to 1.9 million in fiscal 2012, a 33 percent drop — pose a threat to the airport’s finances, as does the attrition of its liquidity position. Still, recent positive boarding trends in part led Fitch to change the airport’s rating status to “stable.”

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