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Fitch Ratings affirms rating on Austin, TX's bonds at 'A-'.

New York: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, affirmed the rating on Austin, TX's approximately $142.5 million in series 2013 rental car special facility revenue bonds at 'A-'.

With Rating Outlook Stable, the rating reflects the consolidated rental car facility's (CONRAC) strong demand profile of over two million transaction days, which is susceptible to a moderate level of volatility. However, transaction days have seen moderate volatility, evidenced by a peak to trough decline of nearly 20%, which reflects the discretionary nature of rental car service. Moderate carrier concentration, with the largest rental car operator representing approximately 37% of market share, is partially mitigated by the attractiveness of the Austin service area, which would likely provide for rapid backfilling in the event of carrier service reduction.

The rating also reflects the CONRAC's adequate rate-making flexibility evidenced by low historical price elasticity, which partially mitigates the narrowness of the customer facility charge (CFC) revenue stream. Bondholders are further insulated by protective features such as subordination of transfer payments, contingent rent provisions, healthy cash-funded reserves, and continued remittal of CFCs to the trustee in the event of project lease termination. The CONRAC's healthy financial profile, evidenced by an average debt service coverage ratio (DSCR) of 1.8x under rating case conditions, is commensurate with the current rating in comparison to peers.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Dec 28, 2018
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