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MOODY'S ASSIGNS 'A' RATING TO SALT LAKE CITY'S JUNIOR LIEN AIRPORT REVENUE BONDS

 NEW YORK, Feb. 19 /PRNewswire/ -- Effective today, Moody's Investors Service assigned an A' rating to the Salt Lake City Lien Airport Revenue Bonds selling on Feb. 17 for $72,385,000.
 Strong financial operations reflected by favorable airport ratios combines with modest debt levels and limited future debt plans to offset the airport's substantial hubbing operations and the dominance of one carrier. The airline currently represents 75.1 percent of all enplanements and provides 33 percent of airport revenues. Although the vulnerabilities posed by a lack of carrier diversity is noted, Delta's recent decision to begin a $7.5 million expansion of its $30 million in maintenance, reservations and training facilities at the airport, with the planned addition of over 300 new reservations personnel, demonstrates its commitment to the relatively stable and extensive Salt Lake City market area. The airline serves as Delta's third largest hub, after Atlanta and Dallas-Fort Worth, and is geographically suited to Delta's route system. Steady growth in annual passenger volume, averaging 6.4 percent since 1987, bolsters the airport's strong financial operations, resulting in consistently broad debt service coverage. Flat net revenues in fiscal 1992 resulted form a decline in interest income linked to the spending down of Series 1989 and 1990 bond funds in fiscal 1991, the added expense of shuttling employee parking lot passengers to a new remote lot, and the abatement of rental car agency counter rental payments during the first three quarters of fiscal 1992 while car service sites were being completed.
 The current issue provides $32.3 million for construction of a new parallel runway and also advance refunds $29.4 million of existing Series 1989 revenue bonds for a net present value savings of $1.7 million, equal to 5.7 percent of par of the refunded issue. The balance of the ambitious $118 million runway project is expected to be financed with $48 million in discretionary federal grants, $21.1 million of entitlement funds, and $15.7 million in surplus airport funds. Total project costs include the construction of a new 12,000 foot runway as well as land acquisition for wetland replacement, a new aircraft rescue and fire fighting facility, and the relocation of canals, power lines and roadway. Existing airport debt is moderate with the bulk composed of nearly 32 percent of closed prior lien and 62 percent of junior lien revenue bonds and about 6 percent of general obligation debt of Salt Lake City, fully supported by airport operations. Bond coverage ratios, based on conservative assumptions, are forecast to stay above two and a third times annual debt service on all bonds. Strong legal provisions include a 1.25 times rate covenant, a similar parity bonds test, and a reserve equal to average annual debt service that will be satisfied at bond delivery by a surety bond.
 At this time, Moody's has also revised the rating on the airport's senior lien revenue bonds from A' to A1' reflecting substantial margins of debt service coverage and that the lien is closed.
 -0- 2/10/93
 /CONTACT: Jerry Cader, assistant vice president - Rocky Mountain ratings group of Moody's Investors Service, 212-553-0329/


CO: Salt Lake City ST: Utah IN: SU: RTG

KD-WB -- NY083 -- 5311 02/10/93 16:01 EST
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Publication:PR Newswire
Date:Feb 10, 1993
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