Credit agencies issue A+ ratings ahead of MSP bond issuance

S&P Global Ratings and Fitch Ratings assigned and affirmed strong credit ratings for the Metropolitan Airports Commission (MAC) in advance of an estimated $701 million bond issuance to support capital improvements at Minneapolis-St. Paul International Airport (MSP). The MAC owns and operates MSP and six general aviation airports in the Twin Cities.

S&P Global Ratings and Fitch Ratings both assigned an ‘A+’ long-term rating to the MAC’s series 2024A (non-AMT) and series 2024B (AMT) subordinate airport revenue bonds.

“Optimizing financial performance and investing to sustain growth is one of the MAC’s key focus areas of our strategic plan,” said Brian Ryks, CEO of the MAC. “The ratings affirm our strong financial outlook and creditworthiness, even as we embark on an ambitious long-term plan to support growing air service demands and facility improvements that provide a best-in-class passenger experience.”

S&P Global Ratings also affirmed its ‘AA-’ long-term rating on MSP's senior airport revenue bonds and its ‘A+’ long-term rating on the airport's outstanding subordinate airport revenue bonds. The outlook on all ratings is stable. In identifying key credit strengths, S&P Global Ratings noted that MSP is the largest airport in the region and serves as an important connecting hub for Delta Air Lines. Further, according to S&P, the MAC has very strong debt-to-net-revenue and overall liquidity, and the MAC has extremely strong management and governance with a history of successfully managing large capital programs.

Fitch Ratings also affirmed its ‘AA-’ rating on the MAC’s senior airport revenue bonds and ‘A+’ rating on subordinate airport revenue bonds. Fitch noted that one of the key drivers for the ratings is the fact that MSP is a key commercial transportation hub in the Upper Midwest with no nearby competition. Additionally, Fitch cited MSP’s competitive cost structure and supporting airline agreements, and the MAC’s well-managed capital spending with many future projects approved by airline carriers.

MSP is the 18th busiest airport in the United States by passenger traffic based on the latest annual data by Airports Council International. The estimated $701 million in airport revenue bonds will likely be sold in late July to fund several projects on the near horizon, including the expansion of Concourse G (Gates 8-13), the Terminal 2 North Expansion, a new public safety and security center, and Terminal 1 concourse and gate hold modernization projects.

In May, the MAC board approved the MSP Airport 2040 Long-Term Plan outlining future yet-to-be-funded projects to improve the terminals, parking facilities and the airfield to accommodate passenger growth and other changes in aviation activity over the next two decades.