Fresno, CA – Standard & Poor’s Global Ratings (S&P Global Ratings) announced an upgrade on Fresno Yosemite International Airport’s (FAT) investment rating to ‘A’ from ‘A-‘ and affirmed a stable outlook. S&P Global Ratings provides globally respected credit ratings through forward looking opinions on the creditworthiness of an obligor to meet its financial commitments.
The ‘A’ rating upgrade reflects FAT’s improved overall credit quality achieved by strong financial management and governance and passenger recovery this year which will enhance rate-making flexibility resulting in S&P Global Ratings’ improvement view of FAT’s market position.
Key credit strengths, opined by S&P Global Ratings, are FAT’s:
- Very strong management and governance supported by management’s track record of consistently meeting and exceeding financial goals and managing risk through prudent financial oversight;
- Good baseline level of demand and strong recovery in passenger activity this year, with passengers for May-September 2021 ranging from 106% to 115% of 2019 levels and exceeding national trends with the expectation to stabilize near or above pre-pandemic levels;
- Debt Service Coverage returning to levels considered strong in 2022 and beyond with relatively low debt burden and manageable capital needs with debt to net revenue expected to remain less than 15x, which includes additional debt planned in 2022 to progress the FATforward terminal expansion program; and
- Very strong liquidity position.
“The improved rating readies Fresno Yosemite International Airport with an attractive and confident financial portfolio to advance with securing financing for FATforward.” said Director of Aviation Kevin Meikle. “Strengthening the Airport’s position to continue with this historic terminal and parking expansion program will accommodate future and projected growth by ensuring efficient and modernized facilities for California’s Central Valley travelers.”
The report lauds FAT’s financial resiliency during periods of lower activity and a strong rebound in air travel demand far exceeding the agency’s expectations. The S&P Global Ratings’ report highlights strong economic growth, pent-up domestic leisure travel demand and the appeal of FAT’s proximity to Yosemite, Sequoia and Kings Canyon National Parks as contributing to its strong recovery.
Finally, the report opines S&P Global Ratings expects FAT passenger recovery and stabilization will provide a business-as-usual environment, allowing FAT to achieve financial metrics consistent with a strong financial risk profile by maintaining balanced financial operations from reoccurring revenue sources.
Fresno Yosemite International Airport – Fresno Yosemite International Airport (FAT) is one of the largest drivers of economic activity in the Central San Joaquin Valley with $928 million pre-pandemic of annual economic activity and 10,800 direct, induced and indirect jobs. Domestic and international carriers serving FAT offer Valley travelers daily nonstop flights to Chicago, Dallas, Denver, Las Vegas, Los Angeles, Phoenix, Portland, Reno-Tahoe, Salt Lake City, San Diego, San Francisco, Seattle, and Guadalajara, León, Morelia and Mexico City, Mexico.
Fresno Yosemite International Airport is a municipally owned entity operating as a self-supporting enterprise. No City of Fresno general funds are used to operate Fresno Yosemite International Airport or Fresno Chandler Executive Airport.
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