Charlotte Airport $110M Rev Bonds Rated `A' by Fitch IBCA.NEW YORK--(BUSINESS WIRE)--Oct. 26, 1999-- Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals assigns its `A' rating to approximately $110.5 million of Charlotte, NC's (Charlotte Douglas Charlotte Douglas may refer to:
Tax-exempt debt issued by a city, county, state, or airport authority with debt service guaranteed either by general revenues generated by the airport or by lease payments for facilities used by a particular airline. (GARBs). The bonds are scheduled to be sold the week of Nov. 8 by negotiation via a syndicate led by Salomon Smith Barney Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world. . The series 1999 bonds are secured by a net pledge of general airport revenues and will be issued on parity with approximately $162 million outstanding airport revenue bonds, which are also assigned an `A' rating. Further, the 1999 bonds are expected to be insured by MBIA MBIA Montana Building Industry Association MBIA Municipal Bond Insurance Association MBIA Michigan Boating Industries Association MBIA Municipal Bond Investors Assurance MBIA Massachusetts Brain Injury Association MBIA Maryland Business Incubation Association Insurance Corp., whose claims-paying ability is rated `AAA' by Fitch IBCA. The `A' rating reflects strength of the Charlotte area economy, the airport's healthy financial position, solid management team, and oversight provided by the North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. Local Government Commission. The Charlotte economy continues to grow faster than North Carolina and the U.S., and unemployment remains low at just 2.3%. The strong economy and rising population support a growing base of origin and destination (O&D) passengers at the airport. Domestic O&D passenger traffic grew to 2.8 million in 1999 from 2.2 million in 1994, or a 6.8% compound annual growth, above the national growth rate over the same period. Total passenger traffic, which is bolstered by US Airways' significant hubbing presence, totaled 22 million in 1999 (down slightly from 23 million in 1998). Strong financial airport management has kept the airport's debt burden modest, debt service coverage high, and the airline cost of operations extremely low. With the addition of the 1999 bond issuance, the airport's total debt supported by net revenues will rise to a $371.5 million. Further, the airport's average airline cost per enplaned passenger level is low at about $2.15 and is projected to remain below $3.00 through fiscal year 2005. The airport's modified compensatory lease and use agreements with its signatory sig·na·to·ry adj. Bound by signed agreement: the signatory parties to a contract. n. pl. sig·na·to·ries One that has signed a treaty or other document. airlines allow the airport to generate revenues in excess of the cost of operations. The airport has utilized this agreement to accumulate about $110 million in cash and equivalents, providing a relatively substantial financial cushion. Offsetting these credit strengths are the dominance of US Airways airways Anatomy The 'pipes'–trachea, bronchi, bronchioles–through which air passes to and from the alveoli. See Small airways. and the significantly high percentage of connecting traffic at the airport. The airport is one of US Airways largest and most profitable hubs. US Airways enplanes more than 90% of all passengers at the airport, and 75% of all passengers are US Airways passengers connecting to other US Airways flights. In addition, US Airways occupies almost 90% of the exclusive-use space in the terminal, limiting the airport's ability to boost traffic from other airlines if US Airways traffic declines. The airport controls just two of the existing jet gates, with the airlines controlling the rest under exclusive use leases. Furthermore, US Airways' highly leveraged financial position and high internal cost structure compare unfavorably to other major U.S. airlines. However, the airline has negotiated new labor agreements and will have new aircraft coming on line next year, both of which are expected to reduce operating costs operating costs npl → gastos mpl operacionales . If US Airways were to significantly curtail cur·tail tr.v. cur·tailed, cur·tail·ing, cur·tails To cut short or reduce. See Synonyms at shorten. [Middle English curtailen, to restrict its operations in Charlotte, it would have a severe detrimental impact on the airport. Charlotte has, to a certain extent, mitigated the concentration risk by keeping operating costs and its debt burden low and accumulating cash. Under certain stress case scenarios (which assume a decrease in US Airways' operations at Charlotte), airline costs at the airport would be significantly higher, yet potentially manageable. Importantly, Charlotte has traditionally been a hub airport (even prior to US Airways' hubbing activity). Also, Charlotte is a strong market and the airport is an attractive north-south hub. Therefore, although a loss of US Airways' traffic would clearly have a negative impact on the airport's credit, Fitch IBCA believes that another airline would most likely utilize at least a portion of the airport's facilities (if available) for connecting flights. |
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