As San Jose airport officials prepare to float the city’s largest bond issuance ever – $832 million in bonds backed by airport revenues – major rating agencies recently reiterated that they consider the airport a fairly strong credit risk.
The bonds will be used to finance the massive upgrade of San Jose Mineta International Airport, including creating a new North Concourse and a new Terminal B that will ultimately replace Terminal C. As part of that switch, passengers will no longer have to walk out on the tarmac to board.
The upgrade also includes major roadway improvements and enlarging Terminal A for a better-flowing security area and concessions.
Standard & Poor’s Ratings Services reiterated its credit rating of A on the airport, meaning the agency considers it a strong but not the strongest credit risk, while Moody’s Investor Service gave it a similar A2 rating. Both said the airport’s future creditworthiness seems stable.
Fitch Ratings gave a slightly higher A-plus rating, but lowered its outlook on the airport’s future creditworthiness to “negative” from “stable.” Fitch did so based on concerns about possible declines in passenger traffic and the complexity of the upgrade.
The city council is expected to vote at its August 14 meeting whether to issue the $832 million in bonds. If approved, the bonds could be sold to investors Aug. 22. Voters do not need to approve the issuance because it will be repaid through airport revenues, not local tax dollars.
