articles Ratings /ratings/en/research/articles/210113-outlook-for-u-s-not-for-profit-transportation-infrastructure-light-at-tunnel-s-end-but-how-long-is-the-tun-11796129 content esgSubNav
In This List

Outlook For U.S. Not-For-Profit Transportation Infrastructure: Light At Tunnel’s End – But How Long Is The Tunnel?


Table Of Contents: S&P Global Ratings Credit Rating Models


U.S. Local Governments And School Districts Still Benefit From Stimulus As The Clock Ticks Down


Criteria | Governments | U.S. Public Finance: Advance Notice Of Proposed Criteria Change: Methodology For Rating U.S. Governments


Sustainability Insights: North American Wildfire Risks Could Spark Rating Pressure For Governments And Power Utilities, Absent Planning And Preparation

Outlook For U.S. Not-For-Profit Transportation Infrastructure: Light At Tunnel’s End – But How Long Is The Tunnel?

(Editor's Note: On March 24, 2021, we revised several sector views back to stable. See "U.S. Not-For-Profit Transportation Infrastructure Sector View Is Now Stable For Airports, Mass Transit, And Toll Roads.")


The COVID-19 pandemic and related economic impacts had a dramatic effect on credit quality in 2020 across the U.S. not-for-profit transportation portfolio: 109 ratings (36%) were downgraded by at least one notch and 88% retain a negative outlook (see Appendix-Rating Changes And Distribution, for details).

Looking ahead to 2021, activity levels of several transportation asset classes are still significantly and negatively affected (e.g. transit, airports, parking), while others (e.g. toll roads and ports) are showing improvement or are well on their way to recovery, due to user preferences and the performance of cargo and commercial traffic.

But progress against COVID-19 will be the key factor in 2021. We expect continued uncertainty due to activity volatility, travel restrictions, quarantine requirements and a sluggish economic recovery which will delay the financial rebound for some transportation providers. However, if vaccination progresses smoothly, travel restrictions ease, prospects for a stabilization in financial performance improves and economic growth matches expectations, then credit pressures could wane by mid-year for some sectors with cargo and commercial traffic-related activity and revenues continuing to buffer depressed or anemic growth for some issuers.

Chart 1


Questions That Matter

1. What do vaccine options mean for U.S. not-for-profit transportation infrastructure providers?

In brief, the vaccines' efficacy and rollout are very important to all transportation infrastructure asset classes. Indeed, while our economic and transportation activity assumptions have assumed a vaccine would be widely available around mid-2021, a rapid and broad distribution would be a huge boost. Economic and demographic trends drive the demand for transportation infrastructure (see Appendix-Key Transportation Sector Demand Indicators, charts 5-8) but by late March 2020 it was apparent a quick rebound from the pandemic-induced economic shock and sudden stop in global mobility was unlikely. Since then, not much has gone according to plan and early recovery projections by many marketplace participants suffered from optimism bias. While the December 2020 introduction of vaccines is encouraging, how well issuers navigate the uncertainty during will be the key credit factor. (See "Updated Activity Estimates For U.S. Transportation Infrastructure Show Public Transit And Airport Operators Still Face A Long Recovery," published Jan. 13, 2021, on RatingsDirect.)

How this will shape 2021

Polls suggest public acceptance of vaccine.   A majority of Americans (60%) surveyed in late November by Pew Research Center indicated they are likely to get vaccinated ("definitely" at 29%, or "probably" at 31%), which is an improvement from September (51%) but lower than May (72%). Polling and public opinions change quickly but it is likely that over time confidence in the vaccines' efficacy and safe administration will improve enough to achieve widespread immunization or herd immunity. Even excluding the 21% of U.S. adults in the November survey who indicated they do not intend to get vaccinated, transportation infrastructure providers will benefit in 2021 from improved health and safety considerations and increased mobility.

Provides for budget and rate-setting stability.  The difficulty in developing reliable demand forecasts by transportation infrastructure operators has inhibited budget preparation, rate-setting and required development of spending and investment decisions contingent on tenuous 2021 volume assumptions. This is especially true for the airport sector, which derives a much higher share of revenues from passenger activity than do transit operators who have other, non-fare box sources of revenue such as taxes--although they face the same ridership forecasts.

To manage liquidity and financial pressures, issuers have made difficult decisions regarding spending and capital investments. The availability of federal stimulus money for airport and transit issuers has also allowed them to retain employees, limit significant service reductions and extend rate relief to tenants, delaying difficult decisions. Some issuers have turned to debt restructuring with capital market new issue and refundings. Regardless, lower but predictable activity levels will allow for better planning and realistic revenue/expense assumptions, helping restore fiscal balance and sustainable, business-as-usual operations.

What we think and why

Some markets/regions will do better with domestic leisure, market-facing business segments first to recover.  In the near term we anticipate the uneven economic recovery will continue. Despite differences in state and local protocols and virus infection rates, the recent surge of COVID-19 cases across the U.S. has affected nearly all states and contributed to increased social-distancing measures and restrictions, stalling a rebound in transportation activity such as airline passenger traffic (chart 2). However, as the economy and access to tourism activities improves, the expectation is for leisure and destination markets to show a more rapid recovery, which will positively affect airports and toll operators in certain regions. Furthermore, there is likely pent up demand for leisure traffic that could accelerate the return of discretionary travel. Airfares are likely to remain low as the airlines work to improve load factors and grow operations. Market-facing business travel (e.g. sales, marketing) will return sooner, but the broader business and international travel segment will lag even with the vaccine implementation and is likely to be volatile during this pandemic recovery period.

Chart 2


Transit operators face more uncertain, longer-term future.  Transit ridership, which has been steadily declining since 2014, will be slow to show sustained recovery as the dislocation of commuters and remote working/office patterns are determined, which also affects many not-for-profit parking operators. The massive shift to remote working, alternate work schedules, and online shopping pose the greatest risk to traditional public transit systems. We expect to see some recovery after widespread vaccination in mid-to-late 2021 but a return to near pre-pandemic ridership levels could be many years away.

Economic recovery will remain uneven but positively affect port and toll operators.  Transportation infrastructure providers have been affected by the pandemic differently depending on their market positions and exposure, i.e. moving people vs. goods. The COVID-19 pandemic and the subsequent recession have had a less severe effect on global trade than we previously anticipated. The movement of essential cargo, strong growth in e-commerce, and shift of consumer spending to tangible goods from services have supported the recovery of container shipping volumes at U.S. ports from mid-2020, in some cases resulting in 2020 volumes greater than 2019, which was a down year for many ports. The key challenges from any new restrictions in 2021 will come from any supply-chain disruptions, demand contraction, and logistical bottlenecks as some of the ports' clients struggle with distribution.

Similarly, for many toll road operators, commercial traffic and the higher revenues derived from this vehicle class has mitigated losses from significantly lower passenger vehicle volumes. Many toll operators also implemented toll increases. If the availability and acceptance of vaccines precipitates a more rapid return to typical traffic patterns, toll operators could see a faster rebound in business conditions and return to credit stability, though there could be unevenness until a demonstrated and sustained pace of recovery is observed.

Active management and adequate liquidity are key to creditworthiness.  Good management teams have a track record of conservative revenue forecasts and prudent approach to expense management and capital investment decisions. Managing through the recovery, achieving sustainable and balanced operations without a reliance on liquidity or debt restructuring, while replenishing cash reserves will be key determinants to maintaining credit ratings.

What could change the trajectory

Rapid coordinated vaccinations.  Should vaccinations enable economies to recover and provide stability to operations and revenue forecasts, our view on some sectors could return to stable.

Delayed or ineffective roll-out of vaccinations.  Conversely, delays, implementation challenges, and/or a lack of acceptance by the general population or users of transportation infrastructure (particularly transit and airports) could lower the trajectory of recovery and decelerate the return to historically strong-to-very strong financial metrics.

Permanent or unknown loss in demand.  The pandemic resulted in the widespread use of videoconferencing for business meetings and remote working which may result in a near-term dislocation or permanent loss in demand at airports, toll roads, parkers and transit riders. It is difficult to determine how serious this will be and there are broader forces at play regarding home/work balance, companies reducing comparatively more expensive real estate footprint and inter-office travel.

Sluggish economic growth and trade volumes.  Should the U.S. and global economies experience a slower recovery, inhibiting travel and trade volumes on top of a delayed vaccine implementation or slow acceptance, headwinds for the transportation sectors would likely continue.

2. Does the $45 bil. in COVID-19 federal relief for the transportation sector provide the liquidity necessary to support credit ratings?

The December 2020 supplemental coronavirus relief act targeted $2 billion to airports, $14 billion to transit agencies, and $10 billion to state departments of transportation including local transportation agencies and tolling agencies. For transit and airport sectors, the additional liquidity may help bridge the gap in the near term but won't address potential longer-term financial pressures associated with a changed operating environment.

How this will shape 2021

Modest aid to airports may support concessionaires and important non-airline revenue streams.  The CARES Act provided $25 billion to the airlines to support salaries and benefits through Oct. 1, 2020, and the most recent federal relief bill provides another $15 billion for that purpose through the end of March 2021. With this direct assistance to airlines, airport operators may be less inclined to provide rate relief to airlines and direct more of the modest $2 billion of CARES Act assistance to other airport tenants and concessionaires--explicitly identified in the legislation--that can generate as much as 50% of operating revenues.

Large, urban legacy transit systems benefit most.  Both urban and rural transit systems will benefit from the $14 billion to be allocated under formulae based on their operating expenses. While not addressing the underlying ridership challenges, for many smaller, bus-only systems this second round of federal assistance will go far. For larger, urban systems with bus, subway, heavy rail, ferry, etc., this liquidity infusion will buy additional time to address funding needs, and to right-size schedules and service offerings. For example, the New York Metropolitan Transportation Authority (BBB+/Negative)--with subway ridership down approximately 70% from 2019--is expected to receive approximately $4 billion, which will delay layoffs and service reductions for 2021 but does not address longer-term structural imbalance. Similar but less pronounced challenges are faced by other large urban transit operators.

New, targeted funding to state department of transportation likely to jumpstart broader infrastructure bill.  The December relief act provides $10 billion to state departments of transportation to address infrastructure investment delayed because of lower fuel tax revenues in 2020. This is a primary funding and source of financing for states to address roadway maintenance and bridge rehabilitation. In practice, each state will administer the stimulus money and steer investment to a variety of surface transportation projects including transit with public toll operators also eligible to receive federal aid.

What we think and why

Liquidity helps in the short term, but...  Liquidity infusions provided by federal stimulus programs are a credit positive and will allow many transportation operators to delay service reductions, offer rate reduction to tenants, or renegotiate business terms of tenants to keep them from closing until activity returns. Of course, the key question is: "How long that will be?" While liquidity solves short-term issues, longer-term credit factors look to sustainable financial operations from recurring revenue sources. In our view, reliance on cash reserves to support operations reflects a diminished capacity to service obligations and suggests a user base unable or unwilling to support facility costs. If recurring revenue sources do not recover quickly enough and non-recurring sources or actions are exhausted or limited, we believe an obligor's chances of making timely payments is less certain, indicating a comparatively weaker rating. Whether airport operators direct any recent federal aid to rental car operators and the debt-financed consolidated facilities secured by user fees remains to be seen.

Direct federal support for most toll road and port operators is likely limited.  The supplemental COVID-19 relief act passed by Congress in December would allow state departments of transportation to transfer funds to state, multi-state, or local public tolling agencies and would allow funds to be provided to offset toll revenue losses, and to pay operating and fixed costs including availability payments for concessions, as well as debt service payments. Given their self-funded business model, we don't anticipate most states will direct significant resources to toll road operators that have performed comparatively well but are still likely to be pressured with lower toll revenues in 2020 and 2021.

While not benefiting directly from COVID-19 relief grants, the port sector did get something as part of the year-end legislative package in the form of the Water Resources Development Act of 2020. Among other initiatives, the act provides Congress with the authority to appropriate up to $1.5 billion in additional funds (a total of $3 billion when combined with CARES Act provisions) from the federal harbor maintenance trust fund to eligible U.S. port operators.

Our recently updated criteria give transit operators credit uplift for tax support.  As of November 2020, transit operators are rated under our updated criteria. (For more information, see "Credit FAQ: How We Apply Our Global Not-For-Profit Transportation Infrastructure Enterprise Criteria," Nov. 2, 2020.) These criteria now provide uplift of up to four notches of improvement to the issuer credit rating, which is two notches greater than the previous criteria allowed, in recognition of our broader view of how tax revenue can strengthen credit quality of certain TIEs. This analytical approach is likely to mitigate any rating downgrades for transit operators facing depressed ridership but with high levels of tax support.

What could change the trajectory

Further delayed economic recovery.  Should the pandemic-induced recession and depressed activity volumes last longer than currently forecast, the federal relief funding would become a figurative bridge to nowhere, only postponing cutbacks, furloughs and other measure to align fixed cost to the new, significantly lower revenue reality. And the passage of additional COVID-19 relief may not be forthcoming in a new Congress during 2021.

3. Will the historic passenger and revenue declines at U.S. airports that resulted in downgrades in 2020 further erode credit quality in 2021?

Individual airport credit quality depends not on a full passenger recovery but rather a credible plan by management teams returning enterprises to self-supporting operations from recurring revenues underpinned by realistic assumptions, demonstrated liquidity, and predictable, forward-looking financial metrics that align with current ratings. Except for Chinese domestic travel, the global and U.S. passenger recovery remains anemic and will likely remain so (see chart 3). So, for 2021 and beyond in the aviation sector, it's all about progress toward widespread vaccination and restoring confidence in the entire air travel experience. We still anticipate U.S. passenger activity recovery to 2019 levels by 2024 with many markets (domestic/leisure) rebounding faster than others (international/business). The level of passenger activity at which that occurs is an open question and will vary by airport.

Chart 3


How this will shape 2021

The return of passenger activity will not be uniform.  Accurate forecasts of the recovery in passengers have so far been fleeting but the worst is behind us. Individual U.S. airlines are forecasting a slow recovery to 2019 levels by 2023-2025 with the International Air Transport Association currently projecting 2024 with vaccine production and distribution challenges pushing meaningful traffic recovery into late 2021 and early 2022. Airports Council International's consensus forecast shows a baseline recovery in global passenger traffic to 2019 levels in the second half of 2023 for domestic and 2024 for international. It may take up to two decades to catch up to the long-term pre-COVID-19 passenger forecast, or it may never be reached.

Airport operators' deferral of airline payments have largely ended and fiscal 2021 budgets are set.   U.S. airports' business model with airline lease agreements typically include some cost-recovery mechanisms, requiring airlines to pay higher landing fees and/or terminal rentals when activity levels decline. These work well in benign or moderately stressed operating environments, but are untested in the current severe market downturn. Arrangements by airport operators to partially defer airline charges in 2020 have largely ended.

The next big challenge is filling the hole left by concession revenues dependent on passenger volumes/composition.   With rate-raising constrained but airlines paying under the terms of their agreements, how airport operators compensate for depressed passenger activity-related revenues derived from concessions, parking, rental car operations will be a challenge. Most airports have modified concession agreements to waive or defer minimum annual revenue guarantees, but how long concessionaires can last will depend on traffic levels and the return of business and international passengers who park, rent cars and shop at duty-free.

What we think and why

Focus on non- aeronautical revenues will be the story of 2021  We anticipate airport operators will turn their attention to preserving and enhancing important non-aeronautical revenue sources (which can be as high as 45%-50% of the operating revenue mix) through rent and concession agreement relief combined with new or alternative approaches to revenue raising reflecting market conditions. We assume airlines will continue to pay rates and charges in 2021 but airport rate-raising flexibility remains constrained with pressure to keep airline costs low.

With traffic forecasting still difficult, development of reasonable scenarios will be key  Systemwide passenger traffic at U.S. airports remains significantly depressed with average daily passengers between March 1, 2020, and Jan. 1, 2021, at only 30% of 2019's level with some connecting hubs performing better at 40%-45%. North American international passenger traffic is only 12%-15% of 2019's. Currently, our baseline January 2021 activity estimates for U.S. airport system-wide traffic are at 40% lower than 2019 levels in 2021, 10% lower in 2022, and 5% lower in 2023 before recovering in 2024. Downside activity estimates assume a delay in widespread vaccine adoption (tables 1 and 2) We continue to utilize these activity estimates to assess the reasonableness of managements' cash flow and financial forecasts, with more aggressive projections evaluated differently than conservative projections.

Table 1

S&P Global Ratings' Estimated Baseline Annualized Transportation Subsector Percent Changes Relative To Pre-COVID-19 Levels*
Estimates as of January 2021/June 2020
Mass transit Airports Parking Toll roads Ports
2020 (55)/(55) (60)/(50) (40)/(45) (25)/(25) (10)/(20
2021 (50)/(30) (40)/(25) (30)/(15) (10)/(10) 5/(10)
2022 (20)/(20) (10)/(5) (5)/(10) 1/(5) 10/(5)
2023 (15)/(15) (5)/(5) (1)/(10) 5/(5) 10/0
*Values represent a composite of assets within the transportation subsector; activity estimates for specific assets could differ based on its value proposition and specific advantages/disadvantages.

Table 2

S&P Global Ratings' Estimated Downside Annualized Transportation Subsector Percent Changes Related To Pre-COVID-19 Levels*
Estimates as of January 2021/June 2020
Mass transit Airports Parking Toll roads Ports
2020 (60)/(60) (65)/(60) (45)/(55) (30)/(30) (10)/(20)
2021 (60)/(55) (70)/(45) (45)/(35) (30)/(20) (5)/(15)
2022 (25)/(30) (20)/(20) (15)/(15) (1)/(10) 5/(10)
2023 (20)/(20) (10)/(10) (10)/(10) 3/(5) 5/(5)
*Values represent a composite of assets within the transportation subsector; activity estimates for specific assets could differ based on its value proposition and specific advantages/disadvantages.

Capital programs continue but reassessed to reflect uncertainty.   Airport management teams have thus far taken a prudent approach to capital investments, both ongoing and planned, by accelerating some projects in the current depressed passenger environment, deferring program elements where possible or outright canceling or shelving large capacity-enhancing terminal or parking projects not already well underway.

Management actions to reach financially sustainable operations are critical.  Our focus in 2021 will be on each airport operator's forward-looking financial risk profile, including key financial metrics (S&P Global Ratings-calculated DSC, debt to net revenues, days' cash on hand, and unrestricted reserves to debt). Specifically, we expect to evaluate operators' fiscal year 2021-2023 estimates along with supporting assumptions to provide a clearer picture of probable financial metrics as activity levels recover or stabilize. Airport management teams' ability to mitigate financial pressures and navigate an evolving landscape will inform our prospective view to determine if metrics we analyze are achievable, sustainable, and align with current rating levels.

What could change the trajectory

Pace of vaccinations.  As noted, rapid passenger recovery brought about by a successful vaccination implementation could improve our view of the sector with delays, implementation challenges, and/or a lack of acceptance of vaccination efforts adding to sector headwinds. We don't believe depressed traffic volumes in 2020 and 2021 are representative of long-term trends, though we do expect that some business travel may permanently disappear. We continue to view airports as long-term infrastructure assets essential to a healthy, growing economy with strong market positions.

Weaker longer-term financial metrics.  We have already lowered credit ratings reflecting our qualitative assessment of weakened demand, the severely constrained rate-setting environment, and expectation that financial metrics will be weaker in the near term. This could also include further stresses on airport tenants, including airlines or concessionaires, that results in a weaker financial performance for airport operators. To the extent there is a long-term reliance on cash reserves or one-time fixes to achieve budgetary balance or projections that indicate longer-term metrics will likely be below thresholds associated with current ratings, credit ratings could be lowered.

4. What is the outlook for infrastructure investment in 2021 under the Biden Administration?

Every president in recent history has advocated for an infrastructure plan either to promote economic growth or, as in 2009, to provide economic stimulus during a recession. In that he campaigned on a $1.3 trillion "Build Back Better Plan," President-elect Biden is likely to advance infrastructure more incrementally to jump-start the economy, possibly in the form of additional stimulus and/or through existing programs initially. Other policy objectives would be subject to congressional negotiations with the likelihood of an infrastructure grand bargain having improved with single-party control of the executive and legislative branches.

How this will shape 2021

Clock is ticking on surface transportation authorization.  Looming in 2021 is the expiration of Fixing America's Surface Transportation (FAST) Act which is authorized through Sept. 30, 2021 (see "GARVEE Bonds Benefit From Continuing Federal Government Support; Uncertainty About Future Funding Remains A Risk," Dec. 4, 2020)and could be a vehicle for part of a broader infrastructure program. However, as in past years, longer-term, more ambitious infrastructure plans will depend on a bipartisan consensus among policymakers on both priorities and funding. The appetite for new taxes is always a challenge and pandemic-stimulus spending in 2020 may usher in new-found austerity by some policymakers.

State and local governments still face an infrastructure deficit.  State and local governments are responsible for the majority of transportation and water infrastructure spending in the U.S. and were responsible for $342 billion of the total $441 billion in public spending according to the Congressional Budget Office. While in recent years they have been filling a void left by a lack of federal funding through higher gas taxes to maintain infrastructure, investment to expand and enhance capital assets continues to decline (see "Infrastructure After COVID-19: Risk Of Another Lost Decade Of U.S. State Government Capital Investment," Oct. 29, 2020).

More green and climate-focused investment.  Federal transportation infrastructure investment will take on a shade of green, particularly in the context of executive branch budgets and more broadly in stimulus spending subject to Congressional approval. President-elect Biden's plan identified heavy investment in transit and transitioning to zero-emissions public transportation options. The transportation sectors represent a combined 28% of total US greenhouse gas emissions. (chart 4) However, with the slim Democratic majorities in Congress, there may be a need to compromise on green objectives to get bipartisan approval for substantive progress on climate issues.

Chart 4


What we think and why

Alternative revenue sources for the HTF remains the Holy Grail.  Federal funding for transportation allocated to states is derived from the Highway Trust Fund (HTF), which relies on a federal fuel tax of 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel fuel, levels that have not risen since 1993. The HTF is forecast to be depleted in 2022 which would require transfers from the U.S. Treasury. Approximately $140 billion has been transferred into the HTF since 2008 as outflows exceed tax collections. What form and method a long-term replacement for the federal gas tax takes will be something to watch for in 2021 as the debate intensifies unless the can (FAST Act reauthorization) is yet again kicked down the road.

Growing influence of ESG factors.   Whether integrated into policy and federal investment priorities, there is a growing market and investor interest in sustainable, lower-greenhouse gas emission transportation opportunities, and increasing focus on long-term transportation asset resiliency. While these could add to capital requirements in the near term, exposure to extreme weather events or carbon transition risks could be lower over the longer-term.

What could change the trajectory

A grand bargain or a majority control of Congress.   While a grand infrastructure bargain--achieved either through negotiations with Congress or with just the Democratic majority--is unlikely, should it or even a more modest comprehensive investment program be approved, the stage would be set for broad-based spending, providing a boost to employment and overall GDP.

Same-old, same-old?   While infrastructure investment has historically received strong support by policymakers, it has lacked long-term funding commitment. With the outcome of the Georgia Senate run-off elections giving President-elect Biden slim Democratic majorities in Congress, this could change in 2021, though hopes for progress on infrastructure investment have been dashed in the past. Because the public benefits are broad and capital requirements are high, transportation investment in the U.S. comes from many sources: general fund money, taxes (such as gas and sales), fees, tolls, fares, cross-subsidies from public enterprises, state grants, and direct federal spending, all of which face constraints. Absent a new funding source, we expect states and regional transportation authorities will struggle to fill potential long-term declines in federal transportation spending, and look to expanded tolling.


Key Transportation Sector Demand Indicators

In past years, U.S. public transportation infrastructure sectors have benefited from slow-but-steady economic growth. Combined with historically low fuel prices, greater certainty in federal funding, and benign global trade flows, the result has been generally positive demand across aviation, maritime, and roadway sectors with declines in public transit ridership. In 2020, the COVID-19 pandemic changed all that resulting in dramatic declines across several key transportation demand indicators.

Chart 5


Chart 6


Chart 7


Chart 8


Rating Changes And Distribution

We define U.S. transportation infrastructure as comprising seven subsectors. The three largest in descending order are airports; toll roads and bridges; and ports. Others include bonds secured by parking systems; transit systems; special facilities (like consolidated rental car facilities at airports); and bonds backed by direct federal payments for highway or transit programs (GARVEE bonds).

This transportation infrastructure report highlights broader economic and industry trends that could lead to changes to credit quality (ratings and outlooks) over the near to intermediate term ignoring changes in criteria. The 2020 modal U.S. transportation infrastructure rating (including all senior and subordinate) is 'A' with more issuers rated at the 'A-' and 'BBB+' rating levels and fewer at the higher rating levels. For example, the share of airports rated in the 'AA' category fell to 4% in 2020 from 20% in 2019. Outlooks across the asset classes are overwhelmingly negative (88%) compared to stable (98%) in 2019.

Specifically, 2020 rating trends were vastly negative after several years of generally positive trends, reflecting the weakened market position of mostly airport, transit, and parking credits (measured by dramatically lower activity trends and rate-raising flexibility) along with anticipated reduced financial performance (measured by debt service coverage).

The transportation sectors saw six rating upgrades and 109 rating downgrades concentrated in airports (76), airport special facility projects (17), ports (3), transit (5) and parking (8). This represents a marked change from previous years of more upgrades than downgrades.

Chart 7


Chart 8


Chart 9


Chart 10


This report does not constitute a rating action.

Primary Credit Analysts:Kurt E Forsgren, Boston + 1 (617) 530 8308;
Joseph J Pezzimenti, New York + 1 (212) 438 2038;
Todd R Spence, Farmers Branch + 1 (214) 871 1424;
Sussan S Corson, New York + 1 (212) 438 2014;
Secondary Contacts:Kevin R Archer, San Francisco + 1 (415) 3715031;
Kenneth P Biddison, Centennial + 1 (303) 721 4321;
Paul J Dyson, San Francisco + 1 (415) 371 5079;
Scott Shad, Centennial (1) 303-721-4941;
Kayla Smith, Centennial + 1 (303) 721 4450;
Taylor Hahn, Centennial;
Andrew J Stafford, New York + 212-438-1937;

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, (free of charge), and and (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to:

Register with S&P Global Ratings

Register now to access exclusive content, events, tools, and more.

Go Back