Thursday, November 5, 2009

Fitch Rates Long Beach Airport, California's Sr Lien 'A-'

NEW YORK, Nov 05, 2009 (BUSINESS WIRE) -- Fitch Ratings has withdrawn its implied 'A-' long-term rating on Long Beach Airport, California (LGB or the airport). The rating withdrawal is in conjunction with the assignment of an 'A-' rating to the following bonds:

--Long Beach Airport Bureau (CA) senior airport revenue bonds, series 2009A;

--Long Beach Airport Bureau (CA) senior airport revenue refunding bonds, series 2009B.

The bonds are being issued under a new master senior trust indenture and are secured by net revenues generated at the airport, including transfers which are not to exceed 25% of annual debt service on the outstanding bonds. Bond proceeds will be used to fund the construction of a parking garage, refund a portion of the department's outstanding subordinate commercial paper notes, refund all of the airport's 1993 certificates of participation (COPs), and fund reserve accounts. The Rating Outlook is Stable.

The 'A-' rating reflects the airport's location and the underlying demand within the greater Los Angeles air trade service area, favorable enplanement trends even in the current economic downturn, strong financial performance supported by diverse business lines, and low cost facilities for passenger airlines. The airport's passenger base is 98% origination and destination (O&D), exhibits solid and growing demand for air passenger service to a considerable mix of both business and leisure destinations, and the airport has an adequate balance sheet characterized by a low debt burden and solid liquidity levels. Credit concerns include the higher than average carrier concentration level (79% by JetBlue Airways), near term additional leveraging in order to support JetBlue's airline operations, a competitive region served by multiple airports, increased dependence on passenger facility charge (PFC) revenues to cover future debt service, and the overall current state of the airline industry and regional economy.

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