Moody's Upgrades LAX's Senior Lien Credit Rating

10/26/2018 01:00 PM

High ratings are generally a factor in lowering borrowing costs for issuers

October 26, 2018

LAX Public Relations
(424) 646-5260


(Los Angeles, CA) This week, Moody’s Investors Service announced that they have upgraded the credit rating for Los Angeles International Airport (LAX). LAX’s $3.4B in outstanding Senior Revenue Bonds were upgraded to Aa2 from Aa3, and the $2.7B in outstanding Subordinate Revenue Bonds (in addition to the bonds expected to price next week) were upgraded to Aa3 from A1. Moody’s also maintained the outlook for LAWA as stable. High ratings are generally a factor in lowering borrowing costs for issuers.

“We are pleased that Moody’s has recognized our continued efforts in managing Los Angeles International Airport’s credit profile,” said Ryan Yakubik, Chief Financial Officer, Los Angeles World Airports (LAWA). “These ratings are a testament to the leadership of our Board of Airport Commissioners, our Chief Executive Officer Deborah Flint, and the discipline we have shown in managing the country’s second busiest airport while implementing a multi-billion dollar capital program.”

Moody’s Investor Services is a leading provider in credit ratings, research, and risk analysis. The report in which the upgrade was announced stated, “The upgrade to both ratings reflect the progress that the Los Angeles Department of Airports (or Los Angeles World Airports, LAWA) has made in procuring large access modernization projects such as the automated people mover (APM) and consolidated rental car (ConRAC) facility under fixed price contracts, as well as continued progress of terminal renovation within program budgets. LAWA has also been successful in achieving new lease agreements with rental car companies that provide for additional revenues to cover the cost of the new access facilities.”

Los Angeles International Airport (LAX) is the 5th busiest airport in the world and the 2nd busiest in the United States. The strong market position of LAX was included in Moody’s rationale for the upgrade.

As included in the report, “The Aa2 rating on the senior lien debt reflects LAX’s superior market position as the largest airport in the second largest population center in the US, limited competition from operationally constrained airports, and the lowest air carrier concentration of any US airport. LAX’s strong market position results in the largest base of origination and destination enplanements in the US and financial metrics that are among the strongest of its international gateway peers.”

Moody’s pointed to the innovative financing models that LAWA is using for its capital improvement and terminal renovation projects as one of the reasons that the outlook for the airport is stable. The report stated, “Both ratings reflect the construction risk at the airport, though price risk has been limited through the use of public-private partnerships for the construction of the APM and CONRAC, and by fixed construction price contracts for terminal renovation projects managed by airlines.”

The press release from Moody’s and full report on the upgraded credit rating can be viewed here:


About Los Angeles International Airport (LAX)

LAX, the fifth busiest airport in the world and second in the United States, was named in Skytrax’ 2018 top 10 U.S. airports. LAX served more than 84.56 million passengers in 2017 and offers 737 daily nonstop flights to 100 cities in the U.S. and 1,386 weekly nonstop flights to 88 cities in 44 countries on 73 commercial air carriers.  LAX ranks 13th in the world and fourth in the U.S. in air cargo tonnage processed, with more than 2.2 million tons of air cargo valued at over $101.4 billion.  LAX handled 700,362 operations (landings and takeoffs) in 2017.

An economic study based on 2014 operations reported LAX generated 620,600 jobs in Southern California with labor income of $37.3 billion and economic output (business revenues) of more than $126.6 billion. This activity added $6.2 billion to local and state revenues and $8.7 billion in federal tax revenues.  The study also reported that LAX’s ongoing capital-improvement program creates an additional 121,640 annual jobs with labor income of $7.6 billion and economic output of $20.3 billion, $966 million in state and local taxes, and $1.6 billion in federal tax revenues.

LAX is also the second most popular airport in the world to appear on Instagram according to LAX is part of a system of two Southern California airports – along with Van Nuys general aviation – that are owned and operated by Los Angeles World Airports, a proprietary department of the City of Los Angeles that receives no funding from the City’s general fund.

For more information about LAX, please visit or follow on Twitter @flyLAXAirport, on Facebook at, and on YouTube at

As a covered entity under Title II of the Americans with Disabilities Act, the City of Los Angeles does not discriminate on the basis of disability and, upon request, will provide reasonable accommodation to ensure equal access to its programs, services, and activities.  Alternative formats in large print, braille, audio, and other forms (if possible) will be provided upon request. 

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