Nashville International Airport Customer Facility Charge Revenue Bonds Upgraded To 'A' From 'A-' On Criteria Application


CHICAGO (S&P Global Ratings) March 14, 2019--S&P Global Ratings raised its 
underlying rating (SPUR) on Metropolitan Nashville Airport Authority (MNAA), 
Tenn.'s customer facility charge (CFC) revenue bonds issued for Nashville 
International Airport (BNA) to 'A' from 'A-'. The outlook is stable. 

The upgrade reflects our application of our "U.S. And Canadian Not-For-Profit 
Transportation Infrastructure Enterprises" criteria (published March 12, 
2018). 

BNA has about $60.1 million in CFC debt as of June 30, 2018. A $4.50-per-day 
rental car CFC for cars rented at the airport secures the bonds. The bonds 
funded an airport rental car facility, which rental car companies operating 
within the airport's premises use.

"The rating reflects our opinion of the facility's strong enterprise risk and 
strong financial risk profiles," said S&P Global Ratings credit analyst Kevin 
Archer. 

The strong enterprise risk profile reflects our view of the facility's 
strategic location and positive demand trends that we expect will remain 
generally stable. Partially offsetting these factors are rental car activity 
levels' exposure to cyclicality, because demand is tied to business travel and 
tourism; and competition from transportation network companies, which we 
believe could somewhat constrain rate-setting flexibility. The strong 
financial risk profile reflects our view of the facility's debt service 
coverage (DSC) and debt metrics, offset by a narrow revenue stream and a 
single asset providing substantially all the net revenues pledged to the 
bonds. 

The market position benefits from the facility's location at a medium-hub 
airport serving a primarily O&D enplanement base. The facility has a vastly 
superior location relative to that of other service providers, making 
competition from off-airport rental car companies limited, with off-airport 
companies accounting for less than 1% of total airport rental car revenues.

The stable outlook reflects our view that generally stable demand levels, and 
very strong debt and liabilities capacity, will enable the facility to 
maintain its strong financial profile. 

We do not expect to raise the rating in the two-year outlook period, because 
we believe the facility's market position, although strong, is unlikely to 
improve significantly, primarily given demand cyclicality. However, if 
coverage increases to and remains at a very strong level, we could raise the 
rating. 

We do not expect to lower the rating during the two-year outlook period, given 
our view that coverage will remain strong and that the facility's debt and 
liabilities capacity will not materially weaken. If the facility's coverage or 
debt and liabilities capacity, or both, deteriorate significantly, we could 
take a negative rating action. 
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