AP NEWS

S&P, Moody’s boost bond ratings for Cleveland Hopkins International Airport

August 31, 2018

S&P, Moody’s boost bond ratings for Cleveland Hopkins International Airport

CLEVELAND, Ohio – Two major rating services have upgraded their bond ratings for Cleveland Hopkins International Airport, lifting the rating to the highest level in eight years. 

Standard & Poors Global Ratings increased the airport’s rating to A from A-minus. and Moody’s Investors Service increased its rating to A3 from Baa1.  

The changes will result in considerable savings on interest costs for long-term borrowing by Hopkins. The city-owned airport system also includes Burke Lakefront Airport. 

Bond Buyer, an independent research service for the municipal bond market, pegged the savings at roughly $5 million. 

“The ratings upgrades received from the leading credit rating agencies S&P and Moody’s further signals the financial strength of the Cleveland Airport System and recognizes the airport’s role in serving the air travel needs and future growth of Northeast Ohio,” Mayor Frank G. Jackson said in a news release. “Increases in passenger activity at Cleveland Hopkins are a testament to the economic vitality and international appeal of Cleveland.”  

Hopkins is planning to issue about $110 million in bonds to refinance some of its debt and also raise money for capital improvements at the airport, including to its baggage-handling system and shuttle drop-off site.  

S&P cited strong management at the airport and Cleveland’s successful transition from being a hub to an airport where nearly all its traffic involves local travelers. 

“The airport’s managerial and governance, in our view, is very strong, reflecting our view of CLE’s strategic positioning; risk and financial management; and organizational effectiveness,” S&P said in its ratings review. “Cleveland maintains tight control over airport finances and overall, we believe the management team is capable.” 

The airport was a hub for Continental Airlines, but after that airline merged with United Airlines, United announced in 2014 it would dramatically reduce flights at the airport. 

Since then, though, passenger traffic has recovered to pre-hub levels and continues to grow. The airport topped 9.14 million passengers in 2017, its highest level since 2011. Passenger traffic for 2018 is up 6.9 percent over 2017 levels through July. 

“These are exciting times for Cleveland Hopkins, with record numbers of passengers using the airport and airlines serving the air travel needs of Northeast Ohio,” Airport Director Robert Kennedy said in a news release.   

AP RADIO
Update hourly