Nashville International Airport > News & Media > Press Releases > Moody's Affirms MNAA's A2 Rating; Changes Outlook to Positive

Moody's Affirms MNAA's A2 Rating; Changes Outlook to Positive

Moody's Affirms MNAA's A2 Rating; Changes Outlook to Positive

Moody's upgrades CONRAC bonds to A3 from Baa1; outlook stable

8/3/2012
NASHVILLE, Tenn. ─ Moody’s Investors Services took ratings action that affirmed the Metropolitan Nashville Airport Authority’s (MNAA) A2 rating for its Airport Improvement Revenue Bonds and changed the outlook from stable to positive.  Moody’s also upgraded the Consolidated Rental Car Facility (CONRAC) bond rating from Baa1 to A3. The MNAA owns and operates Nashville International Airport (BNA) and the general aviation John C. Tune Airport. BNA is the fourth fastest growing among the top 75 airports in North America.

“This affirmation of the Authority’s bond rating and change in outlook from stable to positive underscores continued passenger growth and responsible fiscal management,” said Rob Wigington, president and CEO of the MNAA. “The Authority is dedicated to continuing to provide our community and region with enhanced air service offerings to improve the quality of life and economic vitality of this area.”

Airport Improvement Revenue Bonds

The A2 rating denotes an organization which is rated as upper-medium grade and low credit risk. The A2 rating is based on the airport’s position in a growing metropolitan area, growing improvement levels, low airline cost per enplanement, and adequate liquidity for an airport with residual rate making methodology. The positive outlook is based on the positive 
economic trends in the service area which will keep enplanement levels stable or growing and declining debt service levels.

Strengths of the MNAA identified by Moody’s include:
  • Airport has dominant air market share in Nashville metropolitan area, providing service to a large, stable metropolitan area with a low $6.15 cost per enplanement;
  • Aggressive debt amortization and declining debt service after 2013 with limited additional debt expected to meet capital requirements provides the airport with significant financial flexibility; and
  • Residual airline agreement and low airline costs limit the risk of losing substantial amounts of service from air carriers.
CONRAC Bonds 

CONRAC opened in November 2011. Similar to the A2 rating, an A3 rating denotes an organization which is rated as upper-medium grade and low credit risk. The upgrade is based on the successful completion of construction on time and under budget and customer facility charge (CFC) collection levels exceeding projected levels at the time of initial rating which have resulted in additional liquidity. The stable outlook is based on Moody's expectation of continued economic growth in the Nashville region, increased rental transaction days and growing enplanement trends at BNA.

Strengths of the CONRAC bonds identified by Moody’s include:
  • ​History of stable rental car demand at the airport and limited public transportation options for visitors to the local area;
  • Low initial CFC level and rapid debt maturity provide substantial financial flexibility in the event of income volatility; and
  • Strong liquidity with fully funded coverage, discretionary account, and debt service reserve funds of more than $22.1 million.