KBRA assigns a long-term rating of AA to the Joint Revenue Refunding and Improvement Bonds Series 2025A-1 (AMT), Joint Revenue Refunding and Improvement Bonds SeriesA-2 (AMT) and Joint Revenue Refunding and Improvement Bonds Series 2025B (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"). Concurrently, KBRA affirms the long-term AA rating on outstanding Joint Revenue and Improvement Bonds previously issued by the Cities on behalf of the Airport. The Outlook is Stable.

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 2025A-1 (AMT), Series 2025A-2 (AMT) and Series 2025B (Non-AMT) Bonds will pay the cost of capital improvements at the Airport, refund certain outstanding Subordinate Lien Obligations (commercial paper notes), fund the Debt Service Reserve Requirement and pay issuance costs.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• Sizable and growing regional population and employment base, facility and capacity advantages, and central geographical location contribute to DFW’s status as a fortress hub and sustain its competitive position.
• Experienced leadership team demonstrates strong financial and operational management, and is effectively executing the ambitious, recently expanded Capital Improvement Plan.
• Significant non-airline activity diversifies Airport revenues, provides for discretionary capital funding, and is expected to help to keep airline costs competitive despite increases in operating and capital expenditures through FY 2030.

Credit Challenges

• Further increases in currently high debt per enplanement and maximum annual debt service per enplanement are anticipated as up to $10.0 billion in additional debt is issued through FY 2030.
• Budget exposure exists for the Terminal F program, which increased from $1.7 billion to $4.0 billion since FY 2024 to accommodate a more than doubling of gates.
• While American Airlines DFW hub commitment underpins demand, the Airport’s high exposure to a single carrier’s strategy presents material event risk.

Rating Sensitivities

For Upgrade

• Ongoing population growth and strong local economic performance that drives growth in O&D enplanements and non-airline revenues as debt is amortized.
• Timely completion of planned capital projects, with lower than anticipated related airline costs.

For Downgrade

• An unanticipated lack of enplanement growth due to waning passenger demand and/or reduced airline capacity that leaves DFW overcapitalized relative to its needs for a time.
• While highly unlikely, a sharp or sustained reduction in American’s daily connection banks at DFW and/or a diminishment in the importance of DFW as an American Airlines fortress hub.

To access ratings and relevant documents, click here.

Methodologies

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

Disclosures

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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1010996

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