Rating Action: Moody's affirms Baa2 rating on Grand Junction Regional Airport Authority, CO's outstanding revenue bonds; outlook is stableGlobal Credit Research - 31 Jan 2022New York, January 31, 2022 -- Moody's Investors Service ("Moody's") affirmed the Baa2 rating on Grand Junction Regional Airport Authority, CO's $16.96 million outstanding revenue bonds. The rating outlook is stable.RATINGS RATIONALEGrand Junction Regional Airport Authority (GJT), CO's Baa2 reflects the stability of the authority's relatively small service area and limited air service offerings. This strong competitive position has somewhat offset the negative impact from the pandemic on GJT's enplanement levels, which has been recovering at a faster than sector average pace, with 2021 being at 97% of 2019 levels. However, the rating also incorporates the negative impact of Delta's departure from the airport at enplanement levels, though we expect the airport to be able to somewhat mitigate it through continued recovery and growth by other airlines. GJT's consistently adequate debt service coverage ratio (DSCR) and liquidity levels somewhat balance the airport's small non-hub airport size. The rating is also supported by the airport's manageable capital program, which is primarily grant-funded and not expected to require additional debt over the next 10 years, but is expected to decrease the airport's liquidity level.RATING OUTLOOKThe stable outlook reflects the airport's above average performance since the coronavirus outbreak, though we expect this performance to normalize. It also incorporates our expectation that the airport will be able to mitigate the loss of Delta in a way to keep supporting the current rating level and maintaining adequate financial metrics.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING- Significant enplanement growth resulting in greater than 400,000 enplanements and increased air service offerings- Total net revenue debt service coverage levels consistently above 2.5x- Liquidity levels above 600 days cash on hand on a sustained basisFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING- Loss of a carrier or reduced service offering resulting in declining enplanements without ways to mitigate it- Narrower financial margins with total net revenue debt service coverage falling below 1.5x on a consistent basis- Days cash on hand below 300 for a sustained periodLEGAL SECURITYThe 2016A bonds are secured by a prior lien on pledged revenues of the airport consisting of net general airport revenues and eligible PFCs. Additional security is provided by a debt service reserve fund surety bond sized at the lesser of maximum annual debt service on all outstanding bonds or the tax maximum. The resolution includes a net revenue rate covenant requiring net revenues to cover the greater of (i) 125% of annual debt service in each fiscal year or (ii) required amounts to be deposited into specific bond and reserve funds. The additional bonds test requires net revenues to be equal to or greater than 1.25 times aggregate annual debt service.PROFILEGrand Junction Regional Airport Authority is a special purpose government entity sponsored jointly by Mesa County and the City of Grand Junction. Grand Junction Regional Airport (GJT) is a non-hub regional airport serving origin and destination (O&D) passengers. GJT is located on approximately 3,035 acres of land. GJT has two runways: runway 11/29 is capable of handling commercial, military, and general aviation traffic, and crosswind runway 4/22 is designed to accommodate smaller aircraft. The passenger terminal building has over 76,000 square feet of space and three loading bridges. The airport currently owns three rental car service facility buildings. Parking for the passenger terminal building includes over 675 spaces in a paved lot. West Star aviation provides maintenance, repair and overhaul (MRO) and fueling operations at GJT, occupying over 280,000 square feet of space and employing over 500 full-time staff.METHODOLOGYThe principal methodology used in this rating was Publicly Managed Airports and Related Issuers published in March 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1140469. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.The rating has been disclosed to the rated entity or its designated agent (s) and issued with no amendment resulting from that disclosure.This rating is solicited. 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