Airport Improvement Program

The Airport Improvement Program is in full swing. Read about construction news and progress in our New Directions Newsletter.


JWA Reports Credit Rating Upgrade and Successful Bond Sale

Despite a tightening credit market and increasingly cautious investors, John Wayne Airport’s strong financial foundation produced two impressive accomplishments this summer: a bond rating upgrade and the successful sale of $233.115 million in airport revenue bonds.

John Wayne Airport’s underlying financial strength was recognized by all three rating agencies. Moody’s Investor Services reaffirmed its rating of an “Aa3” with a stable outlook and Fitch reaffirmed its rating of “AA -” with a stable outlook. All three agencies cited JWA’s strong 98% Origination and Destination (O&D) market and the diversity of air carriers serving the market, its historically conservative fiscal management; and finally its very healthy financial position showcased by a robust level of cash reserves, low debt burden, and strong debt service coverage.

Significantly, Standard & Poor’s (S&P) upgraded its long-term and underlying ratings for the Airport to “AA-” with a stable outlook. In announcing its upgrade, S&P cited “the airport’s uniquely strong market position, the strength of the airport’s finances and liquidity position, and no substantial future debt requirements with the finalization of the airports capital improvement plan.” The Airport was particularly gratified by S&P’s comments about JWA’s “experienced, proactive and capable management team who maintains conservative financial policies including: fixed-rate debt only, no derivatives, and level debt service.”

With strong bond ratings in hand, the Orange County Board of Supervisors unanimously approved the bond sale which was necessary to finance a substantial portion of the $543 million Airport Improvement Program. The bonds are secured by net revenues of the Airport, and the final maturity on the bonds is 2039. Several factors worked in the Airport’s favor to reduce the ultimate size of the bond issue, including lower construction bids, exemption from the Alternative Minimum Tax due to the recent Federal Stimulus Package, and credit rating upgrades. The end – and very positive – result is the reduction in both the financing and overall expenses of the much needed improvements.

This is the first issue of “new money” sought by the Airport since 1987, when the County of Orange issued bonds to support construction of the current Thomas F. Riley Terminal. It is great to know that more than two decades later, and in the midst of a very challenging credit market, JWA continues to earn the trust of the investment community and to build the financial support it needs to bring Orange County the first-class air transportation facilities it needs and expects.

>>> Read next story...

John Wayne Airport - Eddie Martin Administration Building, 3160 Airway Avenue, Costa Mesa, CA 92626