Fitch downgrades Burlington airport's credit rating, still investment grade

The City of Burlington announced today that Fitch Ratings has assigned a BBB rating to $37 million in outstanding Burlington International Airport (BTV) revenue bonds, with a negative outlook. This represents a downgrade from the BBB+ Fitch rating maintained by BTV. However, the rating by Fitch is investment grade and represents an improvement from the last rating BTV received from Moody’s Investors Services in May and October of 2010. City and Airport officials cited substantial progress in addressing BTV’s financial issues.
‘The City is pleased that Fitch has preserved an investment-grade rating for BTV and recognizes our financial progress,’ said Burlington Mayor Bob Kiss. ‘There is certainly more work to be done, but this demonstrates the Airport and the City are on the right track.’
The Fitch Rating describes the Airport’s low debt service coverage ratio in Fiscal Years 2009 and 2010 and decrease in enplanements that also underscored the Moody’s rating. Fitch also cites the Airport’s disproportionate reliance on passenger facility charges and parking revenue as opposed to carrier fees, the moderate competition from other airports in the region (including the Montreal area), and heavy reliance on Canadian travelers. At the same time, Fitch recognizes the positive steps the Airport has taken to rectify the debt service coverage ratios, new financial monitoring, a diverse mix of airline carriers at BTV, and robust growth and resiliency of parking revenue.
‘This is a constructive development and significant turning point with respect to the recent financial issues at the Airport,’ said Airport Commission Chair Gene Richards. ‘Airport staff has worked closely with legal counsel and the Clerk-Treasurer’s Office to address these issues, and the results have been positive. I believe we’re doing everything we need to do in order to move forward.’
The complete Fitch report can be found at: http://www.ci.burlington.vt.us/docs/4026.pdf.