S&P Global Ratings Monday upgraded airport revenue bonds issued for Palm Beach International Airport, Florida, to A-plus from A.
The outlook is stable on the bonds Palm Beach County issued for the airport, which is in West Palm Beach.
S&P said the upgrade reflected the airport’s financial resiliency during periods of lower activity and a strong rebound in air travel demand exceeding expectations, as well as updated activity recovery estimates.
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The stable outlook reflects S&P’s expectation that PBI’s enplanements will let it to keep financial metrics consistent with a very strong financial risk profile.
“We believe traffic levels will likely remain near pre-pandemic levels, supporting an improved market position assessment and strong enterprise risk profile,” S&P credit analyst Scott Shad said in a release.
Key credit strengths in S&P view include a good baseline level of demand, a low debt burden with no additional debt needs, a significant liquidity position and very strong management and governance.
A key weakness for PBI is the historical fluctuations in enplanements due to competition from nearby airports, the rating agency said. The larger Fort Lauderdale and Miami airports are close by.
Looking at the airport’s risks and opportunities as related to environmental, social, and governance credit factors, S&P said elevated health and safety concerns are abating and considered credit neutral. S&P considers PBI’s governance in line with that of the sector.
“We view the airport’s environmental risks as elevated compared with those of peers due to Palm Beach County’s coastal location in southern Florida, which makes it susceptible to natural weather-related disasters and climate risks, like sea-level rise. We will continue to evaluate risks and opportunities,” S&P said