Kroll Bond Rating Agency (KBRA) has taken the below rating actions with respect to the following obligations of Clark County, Nevada:

Assigned a long-term rating of AA- with a Stable Outlook to:

• Airport System Subordinate Lien Refunding Revenue Bonds Series 2021A (Non-AMT)

Assigned a long-term rating of A+ with a Stable Outlook to:

• Airport System Junior Subordinate Lien Revenue Notes Series 2021B (AMT)

Affirmed the long-term rating of AA with a Stable Outlook for:

• Airport System Revenue Bonds Senior Series 2019C (Non-AMT)

Affirmed the long-term rating of AA- with a Stable Outlook for:

• Airport System Subordinate Lien Refunding Revenue Bonds Series 2019D (Non-AMT)
• Las Vegas-McCarran International Airport Passenger Facility Charge Refunding Revenue Bonds Series 2019E (Non-AMT)

Key Credit Considerations

KBRA continues to monitor the direct and indirect impacts of the COVID-19 virus. Click here to access KBRA’s ongoing research on the topic.

The rating actions reflect the following key credit considerations:

Credit Positives

• Large, mainly O&D (~90% of travelers) passenger base with varied airline market share.
• Reduced, although still satisfactory, debt service coverage margins and strong liquidity.
• Moderate debt metrics that will likely improve as debt amortizes and no additional debt is issued.

Credit Challenges

• Unprecedented recent passenger traffic declines due to COVID-19 related public health measures and uncertain recovery trajectory.
• Leisure and hospitality base concentration represents a vulnerability in a severe economic downturn.
• Variable rate debt / swaps require ongoing monitoring and have associated risks.

Rating Sensitivities

For Upgrade

• Significant progress in moving toward a fixed-rate debt structure that reduces liquidity and facility renewal risk.
• Improved debt metrics through outstanding issue retirement and limited or no additional debt issuance.

For Downgrade

• Reductions in coverage and/or liquidity
• Unsteady and weak recovery from passenger volume reductions associated with pandemic.
• Sustained passenger enplanement declines due to diminished air trade area relevance as leisure/conference destination.

ESG Considerations

Governance Factors

Cybersecurity: The County operates a large and complex information technology infrastructure to support internal and external operations. The County has a team of nine information technology employees dedicated to protection from cybersecurity attacks and enforcing security policies and procedures. The County has invested in anti-virus, extensive log monitoring, and multi-factor authentication systems. The County is compliant with the requirements of the PCI Data Security Standards Council and additionally maintains a cyber-liability insurance policy.

To access ratings and relevant documents, click here.

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) 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 pursuant to the Temporary Registration Regime. 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.

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