June 27, 2004, 08:16 PM
Keep your eye on the financing
Chronicle business columnist Bill Hensel reports on a federal study that suggests Hobby Airport will need expansion in the near future:
A new runway and other improvements will be needed at Hobby Airport in the next decade to accommodate growth, a study has determined. The findings by the Federal Aviation Administration mirror those already pinpointed by Houston Airport System officials in a new master plan for the city's second-largest airport.
However, many of the improvements will rely on funding from the FAA, so the official findings by the federal agency are considered important.
One would prefer that the FAA will indeed kick in the funding.
Because we wouldn't want a repeat of the financing of Continental's Terminal E expansion at Intercontinental, the bonds for which were downgraded in April 2004:
Thursday, April 29, 2004
Fitch Lwrs Houston Airport Sys Special Facils Revs Matching CAL's Sr Unsec Rtg 'CCC+'; Stable Outlk
Business Wire
SAN FRANCISCO--(BUSINESS WIRE) — Fitch Ratings downgrades the rating on $323.5 million City of Houston, Texas, airport system special facilities revenue bonds (Continental Airlines, Inc. Terminal E Project) series 2001 to 'CCC+' from 'B-'. A Fitch 'CCC' category rating indicates that the potential for default is a real possibility. Special facilities rent, paid by Continental Airlines Inc. (CAL) secures the bonds and this transaction includes no access to liquidity or structural enhancements to avoid default if CAL fails to provide timely debt service payments.
Let's just hope for the best.
Incidentally, a quick search of the Chronicle archives didn't turn up any reporting on this Fitch downgrade that took place months ago.
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