Vancouver Airport Authority Maintains AA Credit Rating
On Aug. 24, ratings agency Standard & Poor's affirmed its AA long-term issuer credit and senior unsecured debt rating for Vancouver Airport Authority. This marks the 11th consecutive year the airport authority has maintained its AA rating from Standard & Poor's—making YVR one of the world's most creditworthy airports.
"This announcement is a big vote of confidence for YVR, a community-based organization that is committed to strong and sustainable financial health," said Glenn McCoy, senior vice president, strategy and chief financial officer, Vancouver Airport Authority. "Our sound financial planning is reflected in the airport authority's consistently high credit rating, which I'm proud to say is among the highest airport ratings in the world."
YVR has enjoyed strong financial performance over the last year, thanks to an innovative management team focussed on providing unique business solutions and competitive fees for business partners. In 2016 YVR launched ConnectYVR, a fair and equitable program that offers a rate structure for airlines designed to incent growth and efficiency. The new program dropped average rates by 15 per cent, making YVR's rates some of the lowest in Canada.
Programs such as ConnectYVR are possible because of the airport's focus on developing alternative, non-aeronautical sources of revenue, which accounted for 45 per cent of the Airport Authority's revenue in 2015. This includes sales of YVR's award-winning BorderXpress kiosks, the world's leading border processing solution. YVR also collects revenue from the new McArthurGlen Designer Outlet Vancouver Airport, a local jobs creator and a growing shopping destination of choice for passengers.
"Our unique, not-for-profit model means we have no shareholders and we put all of our excess revenue over expenses back into the airport. This allows the airport authority to attract business partners with a very competitive rates and charges package through Connect YVR, while achieving a healthy debt service coverage ratio," said McCoy. "It also means we are able to focus on our mission of connecting BC proudly to the world, which we do through ongoing terminal upgrades, new air services and new amenities."
YVR remains committed to responsible debt management. In December 2015, the airport authority announced the closure of a private placement of C$200 million in Series F debentures due November 2045. The Airport Authority took advantage of historically low interest rates of 3.857 per cent, the lowest issued rate by a Canadian airport with a 30-year term. The Airport Authority also saw a 4.3 per cent increase in overall revenue in 2015 and continues to maintain one of the lowest Airport Improvement Fees (AIF) in Canada for a major airport.
