Dear Friends and Media,
Fitch Ratings, Inc., one of Wall Street’s “Big Three” credit rating agencies, has reaffirmed the “A” rating for general revenue bonds for the El Paso International Airport but downgraded the outlook from Stable to Negative.
According to Fitch’s website, “A’ ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.”
According to the FY 2020 Budget Book (p. 87), the City of El Paso has $769,875,000 of outstanding debt on the airport in general obligations and another $552,985,000 in certificates of obligation, for a total outstanding tax-supported debt of $1,292,860,000. All of this debt was issued between June 2007 and March 2019 and will not be completely extinguished until the year 2044.
Aviation accounts for 51% of the City’s Economic Development budget, or $64,047,890 (p. 149).
According to Aaron Montes of the El Paso Times, in March 2019 there were 5,117 passengers who passed through airport checkpoints, whereas this past March the number dropped to 962, a decline of 81%.
This April 9 downgrade went unreported by our local media, just like the December 10 report from Moody’s warning the City of El Paso of a default in the event of a market downturn.
Max