Pensacola airport bonds downgraded, but outlook stable

Fitch Ratings has downgraded to ‘BBB-‘ from ‘BBB’ its rating on the city of Pensacola’s (Florida) approximately $33.5 million in outstanding series 2008 airport capital improvement revenue bonds issued on behalf of Pensacola International Airport (PNS).

The Rating Outlook is revised to Stable from Negative.

According to the business wire, the downgrade reflects the airport’s financial underperformance relative to projections in recent years, citing historical thin operating margins generated, low Fitch-calculated debt service coverage ratios (DSCR), high leverage and low liquidity as more consistent with peers currently rated ‘BBB-.’

The Stable Outlook reflects improved financial margins in fiscal year 2013 and enhanced sources of non-airline revenues going forward.

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Maybe Chick-fil-A can turn around the decline.