Phoenix Sky Harbor International Airport and Consolidated Rental Car Center Bond Rating Upgrades
Standard and Poor’s Ratings Services (S&P) raised its long-term rating to ‘AA-‘ from 'A+' on Phoenix Civic Improvement Corporation's (CIC) senior-lien general airport revenue bonds (GARBs) and raised its long-term rating to ‘A+’ from ‘A’ on the corporation's junior-lien GARBs, issued on behalf of Phoenix Sky Harbor International Airport (PHX). S&P also raised its rating to ‘A’ from ‘BBB+’ on the CIC’s rental car facility charge (CFC) revenue bonds, issued on behalf of PHX to fund projects related to PHX’s consolidated rental car center (CONRAC). This returns both the GARB and CONRAC bond ratings to their pre-pandemic levels. Both credits have stable outlooks.
“These upgraded bond ratings reinforce what we already know about Sky Harbor – it is a well-managed and strong economic engine for the area,” Mayor Kate Gallego said. “The health and outlook of our airport continues to show how Phoenix has resoundingly bounced back from the pandemic.”
S&P expects the airport will maintain steady financial results and a strong liquidity position, noting that passenger recovery and enplanement trends have been steadily recovering which they believe is sustainable, and expect the airport’s market position to allow it to maintain a strong financial position.
The ratings reflect the airport’s limited competition in the local market and large, and growing, origination and destination base. The ratings also reflect the high quality of financial management of the airport and their proven track record of meeting, or exceeding, financial targets as well as a willingness and ability to adjust budget and capital plans to maintain financial strength in times of stress.
“I am incredibly proud of our dedicated City of Phoenix Aviation team who enabled our successful recovery from arguably the most extreme downturn in modern aviation history,” said Director of Aviation Services, Chad Makovsky. “We also owe a debt of gratitude to the airlines and our other business partners for their constant support of our airport through the pandemic. Thanks to our partners, wise financial management, and the flying public who have come back in such large numbers over the past several months, Sky Harbor is positioned to pick up where it left off in 2019 as the friendliest, and one of the busiest airports in the country.”
“A higher bond rating reflects the Aviation Department’s commitment to financial excellence and means the airport pays lower interest rates when it borrows funds for airport improvements and modernization projects,” said City of Phoenix Chief Financial Officer Kathleen Gitkin.
Sky Harbor is currently finishing the extension of the PHX Sky Train to the Rental Car Center and will be embarking upon the construction of a new taxiway next year. This is in addition to the completion of a new eighth concourse for Southwest Airlines at Terminal 4 which opened this summer.
“The Aviation Department’s work to control costs and develop responsibly have once again paid dividends. Our excellent credit rating helps to ensure that as passenger demand continues to grow, we will have the resources necessary to build and maintain the kind of world-class, customer friendly facilities people expect,” said Councilwoman Debra Stark.
“This ratings upgrade is a real vote of confidence in Sky Harbor and the Aviation Department’s financial management. As Standard and Poor’s noted, demand for flights to and from the airport is high and continuing to grow. Thanks to airport workers, our Aviation Department, and everyone who does business at Sky Harbor we managed to come out of the COVID-19 pandemic in an even stronger position,” said Councilmember Carlos Garcia
