Dallas Fort Worth International Airport is preparing to enter the municipal bond market with a $750 million deal after receiving a rating upgrade from S&P Global Ratings. The airport’s rating was increased to AA-minus from A-plus, indicating its strong enplanements, history of financial resiliency, and stable debt service coverage. This upgrade reflects the airport’s improved financial performance and its ability to fund a large capital plan based on a renegotiated airline use-and-lease agreement.
In addition to S&P Global Ratings’ upgrade, Moody’s Ratings revised the outlook on DFW’s A1 rating to positive from stable. This change reflects the increased likelihood that the airport’s capital program will be completed without an undue increase in leverage. Management’s efforts to de-risk the construction program and secure funding for the airport’s expansion projects have contributed to this positive outlook.
Dallas Fort Worth International Airport’s capital improvement program includes the construction of a sixth terminal and expansions of terminals A and C, with a projected cost of $8.6 billion through fiscal 2029. The airport’s outstanding debt is expected to grow to $12.4 billion by fiscal 2029 with future debt issuances. Airlines have pre-approved $5.1 billion of the program, demonstrating their commitment to the airport’s growth and development.
Despite the challenges posed by the COVID-19 pandemic, Dallas Fort Worth International Airport has seen a steady increase in passenger volume. Passenger traffic in fiscal 2023 exceeded pre-pandemic levels, and the airport forecasts continued growth, reaching 107.1 million passengers in fiscal 2029. As the second-busiest U.S. airport, DFW plays a significant role in the aviation industry and remains a key hub for American Airlines.
Bond Sale Details
The upcoming bond sale, scheduled to price on August 22nd, will involve the refunding of about $450 million of outstanding extendable commercial paper and the issuance of approximately $300 million of new bonds. The debt is rated A-plus by Fitch Ratings and AA by Kroll Bond Rating Agency, with stable outlooks. The underwriting team for the bond sale includes Wells Fargo Securities, JP Morgan, Academy Securities, and Truist Securities, among others.
The positive rating upgrade and outlook revision for Dallas Fort Worth International Airport reflect its financial strength and commitment to strategic growth. The airport’s capital improvement program and increasing passenger traffic demonstrate its resilience and competitiveness in the aviation industry. With the upcoming bond sale, DFW is poised to secure funding for its expansion projects and continue its trajectory of success in the years to come.