John Wayne Airport’s Bond Rating Reinstated : Credit: Moody’s action signals further recovery by local agencies from the county’s bankruptcy.
In another sign that local agencies are recovering from Orange County’s bankruptcy, a major Wall Street credit rating agency on Monday reinstated the bond rating of John Wayne Airport.
Moody’s Investors Service Inc., which suspended ratings on the airport’s bonds as a warning to investors after the county filed bankruptcy petitions Dec. 6, reversed itself Monday, giving an A rating on about $118 million worth of bonds outstanding.
The bonds were sold in 1987 to upgrade the airport and its terminals.
While the high-grade rating is a green light to bond investors who want to buy or sell the bonds, it is still a downgrade from the A1 rating held by those same airport bonds until ratings were suspended last December.
However, airport officials said there are no immediate plans to sell additional bonds.
Although the airport has lost $14 million as part of the bankruptcy settlement plan, Moody’s analyst Adam Whiteman said it is financially healthy and its remaining revenue is insulated from the county bankruptcy.
“While the cash loss is troubling, it is manageable in light of the airport’s historic financial performance and modest future capital needs,” he said.
In addition, Whiteman added that at this time it would be “difficult and uneconomic” for the county to sell or transfer the airport to another entity as a way to recoup lost revenue.
“Basically, as the recovery plan unfolds it will become obvious to Moody’s that we deserve to be put back to our A1 rating,” said Pat Ware, spokeswoman for John Wayne Airport. “We’re confident that they will get more in line with Standard & Poor’s.”
Standard & Poor’s Corp. took the airport’s bonds off its credit watch Oct. 24 and reinstated the bond rating at A minus, the same level the bonds held before the county went bankrupt.
“We didn’t think there was any financial erosion and it became clear that the county’s recovery plan didn’t include the airport,” said Kurt Forsgren, Standard & Poor’s associate director, in explaining why the rating agency took the bonds off credit watch.
Last week, Standard & Poor’s cited lingering uncertainty about Orange County’s recovery plans in refusing to upgrade Orange County’s rock-bottom credit rating.