KBRA assigns a long-term rating of AA+, with a Stable Outlook to the City of Atlanta, GA Airport General Revenue Bonds, Series 2024A-1 (Non-AMT) (Green Bonds), Series 2024A-2 (Non-AMT) and Series 2024B (AMT). Concurrently, KBRA affirms the AA+, with a Stable Outlook assigned to outstanding Airport General Revenue Bonds and Passenger Facility Charge Subordinate Lien Airport General Revenue Bonds.

General Revenue Bonds (GARBs) are secured by a pledge of net General Revenues, while the Airport Passenger Facility Charge (PFC) and Subordinate Lien Revenue Bonds (Hybrid PFC Bonds) are secured by a senior lien on PFCs and a subordinate lien on net General Revenues. KBRA makes no rating distinction between the GARBs and Hybrid PFC Bonds given the strength of debt service coverage on both liens and the subordinate pledge of airport net revenues available to pay Hybrid PFC debt service, if needed. As of June 30, 2023, approximately $1.8 billion and $1.4 billion of GARBs and Hybrid PFC Bonds, respectively, were outstanding.

Key Credit Considerations

Credit Positives:

• Expansive, vibrant and economically diverse air trade area.

• Robust utilization, in part driven by an advantageous geographic location that supports an airline hub.

• Healthy financial performance and debt service coverage, with still considerable debt capacity.

Credit Challenges:

• Significant reliance on Delta and its regional partners.

• Continued high, though moderating, dependence on connecting traffic.

• Various risks associated with implementing a large, multi-phase capital plan.

The Stable Outlook reflects KBRA’s expectation that ATLNEXT will continue to be prudently implemented, with operating performance, debt service coverage and liquidity benefiting from continued growth in passenger related revenues. KBRA believes that components of ATLNEXT, which focus on replacing critical systems and infrastructure, increasing capacity, and enhancing the customer experience, serve to reinforce ATL’s profile as an essential hub for Delta Air Lines and the U.S. air system more broadly.

Rating Sensitivities

For Upgrade:

• Completion of ATLNEXT projects on-time and on-budget, with financial metrics exceeding forecast.

For Downgrade:

• While a remote prospect, the permanent loss in passenger volumes leading to non-competitive airline costs, impaired liquidity and materially weakened DSC.

To access rating 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.