KBRA Assigns A+ Rating, Stable Outlook to Allegheny County Airport Authority (Pittsburgh International Airport) Airport Revenue Bonds, Series 2025A (AMT) and Airport Revenue Bonds Series 2025B (Federally Taxable)

KBRA assigns a long-term rating of A+ with a Stable Outlook to the Allegheny County Airport Authority, PA (Pittsburgh International Airport) Airport Revenue Bonds, Series 2025A (AMT) and Airport Revenue Bonds, Series 2025B (Federally Taxable), and affirms the A+ rating and Stable Outlook on outstanding Airport Revenue Bonds.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• ACAA’s proactive leadership team is focused on maintaining competitive airline costs by maximizing non-airline revenue sources, attaining operating efficiencies and maintaining expense controls.
• An absence of airline concentration, the availability of unique non-aviation revenue sources which can be applied on a discretionary basis, and the origin and destination nature of Airport activity enhance operating and revenue stability.
• Pittsburgh’s diversified regional economy benefits from a young, well-educated workforce, low unemployment, and expansion in strategic employment sectors. A lack of population growth somewhat offsets these positive demographics.

Credit Challenges

• Projected leverage is very high. Debt metrics are expected to remain elevated throughout the 2025-2030 forecast period.
• A rising CPE could discourage service expansion or retention, particularly for LCCs and ULCCs.
• Certain revenues that may be deemed “Other Pledged Revenues” under the Master Trust Indenture, including revenues from gas drilling and various grant programs, have proven to be volatile.
• The Authority is expected to remain heavily reliant on non-operating revenues, including Gaming Act Revenues, Gas Drilling Revenues and Federal and State grants.

Rating Sensitivities

For Upgrade

• Recognition of anticipated operating cost savings and maintenance of manageable airline costs.
• Full recovery in enplanements and subsequent sustained growth that results in sound coverage margins (taking into consideration the residual nature of rates), and moderate airline costs.

For Downgrade

• A lack of attainment of projected operating cost reductions, airline costs, or enplanement levels upon completion and operation of the TMP and ARP projects.
• Though not anticipated, further escalation in TMP and ARP construction cost or project delays.
• A pause or reversal in enplanement recovery, triggering significant increases in airline costs.
• Issuance of additional debt without an identified source of repayment.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. General Airport Revenue Bond Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1008870

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