LAX Given High Bond Rating

Standard & Poor’s Corp. said Wednesday it gave its highest rating ever for a U.S. general airport-revenue bond to Los Angeles International Airport, which plans to sell $36 million of such debt next week.

In assigning its AA rating for the 17-year bonds, the credit-rating agency cited LAX’s solid financial shape, “exceptionally low” existing debt burden and “strong airport management” that maintained the airport’s “liquidity and strong debt-service” ability after the Sept. 11 terrorist attacks.

S&P; also said the airport’s diversity -- about 85 passenger airlines and 30 cargo carriers -- is a plus because LAX isn’t heavily reliant on the fortunes of one or two airlines.

The benefit of the high rating is that it lowers the cost of borrowing for the airport. The bonds are expected to carry an interest rate of between 4.5% and 5.5%, and the proceeds will be used to reimburse the airport for capital spending on the 3,586-acre facility.

S&P; noted that the long-term master plan being formulated for LAX might cost up to $9 billion. But it said the program didn’t affect its ratings for the current bond issue because “the specifics of [the plan’s] scope, timing, cost and funding have not yet been determined.”