By Richard De Atley
Posted: 09/12/16 – 4:35 PM PDT |
ONTARIO >> Fitch Ratings said Monday it has revised its outlook for Ontario International Airport bonds from negative to stable, based on better passenger traffic and a healthy financial profile for the Inland facility.
The A-letter grade remained unchanged from the previous report.
The $55.5 million in fixed-rate revenue bonds reviewed by Fitch are issues by the current Los Angeles owners of the airport.
The study notes the bonds will have to be redeemed before the planned transfer of the facility from Los Angeles World Airports to Ontario International Airport Authority, now set for November.
Fitch also assessed post-transfer challenges, including increasing cost-per-boarding charges at ONT and encumbrances on passenger facility charges until transfer terms with LAWA are met.
The OIAA will issue its own set of bonds once the transfer is complete.
“We are always pleased to see the (status of) the existing bonds improve,” OIAA Chief Executive Kelly Fredericks said in a statement Monday.
“The outlook revision reflects the stabilizing traffic performance” after a lengthy period of declines since the recession, the Fitch report said. Boardings have increased since fiscal 2015 and remain above 2 million.
It also notes the airport’s financial profile is healthy, with unaudited, unrestricted cash of $67 million in fiscal 2016, equivalent to about 550 days’ cash on hand, and a debt service coverage ratio above 1.6.
Annual debt service payments range from $7 million to $7.3 million, termed relatively flat.
As part of the $249 million agreement between Ontario and Los Angeles World Airports for transfer of ONT back to local control, the OIAA will refund the outstanding bonds to LAWA when the facility is handed over to the authority.
To read expanded article, click here.