KBRA assigns a long-term AA rating, with a Stable Outlook to the Joint Revenue Refunding and Improvement Bonds Series 2024 (Non-AMT) issued by the Cities of Dallas and Fort Worth, TX ("the Cities") on behalf of Dallas/Fort Worth International Airport (DFW or "the Airport"). At the same time, KBRA affirms the long-term AA rating, with a Stable Outlook on outstanding Airport Joint Revenue and Improvement Bonds previously issued by the Cities on behalf of the Airport. Joint Airport Revenue and Improvement Bonds are payable from and secured by an irrevocable first lien on and pledge of the Airport’s gross revenues. Proceeds of the Series 2024 Bonds will fund capital improvements, refund outstanding commercial paper notes, fund a contribution to the reserve fund and pay costs of issuance.

Credit Positives

• Strong management team has demonstrated an ability to effectively deal with the complexities of running a major U.S. airport.
• Growing population and economic base support origin and destination (O&D) traffic.
• Significant non-airline activity diversifies revenues and provides a source of discretionary capital funding.

Credit Challenges

• High debt levels on per enplanement basis.
• High concentration with American Airlines as primary DFW carrier.
• Connecting traffic is a significant component of overall enplanement activity.

The Stable Outlook reflects KBRA’s expectation that airline and non-airline activity will continue to expand, which will in-part offset the additional costs associated with DFW’s extensive CIP. KBRA expects the additional gate capacity and efficiencies afforded by the program will further reinforce DFW’s critical importance in American Airline’s hubbing network and allow debt service coverage metrics to be sustained at levels above Ordinance requirements.

Rating Sensitivities:

For Upgrade:

• Ongoing population growth and strong local economic performance resulting in O&D enplanement increases, and elevated rental car, parking, and concession revenues, as debt is amortized.
• Timely completion of planned capital projects, with lower than anticipated related airline costs.

For Downgrade:

• Debt metrics increase to levels significantly more than what is currently forecast.
• While highly unlikely, the reduced importance of DFW as an American Airlines hub.

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Methodologies

• Public Finance: U.S. General Airport Revenue Bond Rating Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1005477

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