The New York-based bond-rating agency has removed a CreditWatch with negative implications rating on Miami-Dade County's $299 million aviation revenue bonds, series 2002. At the same time, S&P lowered the bonds' rating to A-minus from A.

The ratings were initially placed on CreditWatch Sept. 20, 2001.

In a prepared statement, S&P credit analyst Joseph Pezzimenti says the agency is worried lower passenger volume over the next eight years could put the city's aviation department in a financial bind on the $2.6 billion in new debt it has taken on to complete a $7.2 billion capital improvements program.

The program at Miami International Airport entails the completion of a north terminal development program, a people mover, cargo and aircraft maintenance and security/support projects.

The $299 million bonds issue will bring the county's total outstanding debt for the airport to $1.8 billion.

"A rising debt burden, fueled by a significant capital improvement program, which currently requires almost $2.6 billion in additional debt from now through fiscal 2007, combined with flat and declining passenger levels, causes concern for Standard & Poor's," Pezzimenti says.

The analyst says, "While the airport's dominant market position and strong revenues from concessions somewhat offset these concerns, we are concerned that passenger levels could stall during the peak period of the airport's capital expenditures, putting increasing pressure on the airlines that operate Miami International."

Pezzimenti says the $7.2 billion capital improvement program will use a phased approach over the next eight years, allowing the airport to change plans if passenger levels don't recover as expected.