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Airport is 'a good steward of public funds'

June 24, 2011|By Dan Feger

In the June 4 print versions of the Burbank Leader and Glendale News-Press, the sub-headline said Fitch “questioned” the Burbank-Glendale-Pasadena Airport Authority’s proposed use of bonds for the transportation center (“Airport gets credit rating warning,” June 4).

That was not a correct statement; Fitch only said the existing bond rating might be lowered should the authority move forward with the planned bonds.

The online version, however, went beyond the pale, stating that Fitch had warned the authority not to use bonds to finance the transit center. This statement is nothing short of outrageous, as it is false and misleading, thus doing great disservice to both the authority and to the Leader’s online readers.

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In its release, Fitch indicated it maintained the existing AA- rating for the 2005 bonds. The airport authority is one of 10 airport sponsors, among the more than 130 commercial airports in the U.S., whose bonds are rated in the AA- category, the second-highest rating category, from the three rating agencies.

However, Fitch did put the bonds on “negative watch” because of the airport authority’s intent to issue approximately $90 million in new revenue bonds later this year to help pay for a new transportation center at Bob Hope Airport. Fitch opined that if the authority took on this new debt, a lower bond rating might result due to reduced debt service coverage levels and higher debt burden.

Nowhere in the release did Fitch say the airport authority should not issue the debt. Furthermore, the agency did not say the authority would not be creditworthy as a result of issuing the proposed bonds. In point of fact, Fitch noted that even with the proposed bonds, the authority’s cash reserves to outstanding debt will exceed industry standards.

What the public needs to know is that the airport authority is a responsible public agency and a good steward of public funds. The authority is pursuing this project because it is important to the community and the region to promote alternative modes of transportation if traffic congestion is to be reduced in a meaningful way.

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