Rating Agencies Give PIT Straight A’s for Modernization

Financial rating agencies cite solid market position, passenger growth, strong support from airlines

By Alyson Walls

Published August 2, 2021

Read Time: 2 mins


Three financial rating agencies gave favorable long-term investment grade ratings to the Allegheny County Airport Authority recently in anticipation of the first bond sale to finance the Terminal Modernization Program.

  • On Friday, Kroll Bond Rating Agency rated the Authority A+ stable, citing positive passenger growth prior to the pandemic and the strength of the management team.
  • Fitch Ratings rated the Authority A stable, citing low default risk and strong capacity for payment of financial commitments.
  • Moody’s Investors Service rated the Authority A2 stable, citing the solid market position of the airport and region, a diverse carrier base and additional non-operating revenue sources.

Airlines serving Pittsburgh International Airport are the primary funders of the project. They confirmed their support and trust in the long-term success of the airport in June by signing a new lease agreement expiring at the end of 2028. The agreement fully approves $1.39 billion in TMP costs.

“The rating agencies and the airlines all have faith in our airport and our market,” said Christina Cassotis, CEO of the Airport Authority. “These ratings prove what we all have known—this market is strong, the region is growing, and we are in an excellent position for this modernization program. This confirms to the world that we are a solid financial investment.”

The Authority paid off its existing debt in 2019 and has maintained stable airline rates and charges throughout the pandemic.

The Authority also maintains sources of non-aeronautical revenue including funds from natural gas drilling and state gaming.

Set to open in 2025, PIT’s new terminal was financially approved by its airline partners in June. (Rendering courtesy of Gensler + HDR in association with luis vidal + architects)

The TMP plan of finance was based on highly developed and independently vetted cost estimates. Additionally, the Authority has rigorous review systems in place to keep the program on budget and on schedule.

“The Authority’s leadership successfully managed the pandemic by focusing on public health, capturing increased cargo demand, supporting the industry and continuing to advance strategic initiatives,” said Kevin McPeek, director of PFM Financial Advisors, financial advisor to the Authority who assisted with presentations to ratings agencies.

“PIT has a diverse air carrier mix, making it a strong origin-and-destination market not dependent on a single airline, and the agencies recognized those and other factors.”

While agencies cited lingering uncertainty around ongoing pandemic impacts and potential risk of escalating construction costs, the agencies noted that the Authority is in a good financial position and has the capacity to take on long-term debt associated with building a new 700,000-square-foot landside terminal and multi-modal parking complex.

“We will continue to work with our airline partners throughout construction of the TMP to control costs and keep rates stable,” said Eric Sprys, Executive Vice President and Chief Financial Officer. “Our passenger trends are showing a steady recovery consistent with national trends, and our future traffic has been conservatively projected.”

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