Airport Completes $291M Sale of Revenue BondsFriday, August 4, 2017
Operators of San Diego International Airport recently completed a sale of more than $291 million in revenue bonds, at an interest rate that is the lowest earned in the airport’s history, at 3.74 percent.
An Aug. 3 statement from San Diego County Regional Airport Authority said proceeds from the July 18 sale of subordinate airport revenue bonds will go toward construction costs of the Terminal 2 parking plaza and international arrivals facility, both currently underway.
Officials said proceeds will also go toward funding other vital capital improvement projects, including airfield and terminal enhancements.
Airport operators said the borrowing cost of 3.74 percent is a lower long-term rate than comparable bond issuances in 2010 and 2013. Accessing the bond market at a favorable interest rate saves an estimated $43.4 million in reduced debt service costs over the 30-year term of the bonds.
Officials said the bonds also received “exceptional demand from investors,” with $4 million sold to retail investors and $287 million sold to 80 institutional investors.
Among other factors, the airport authority’s revenue bonds carry favorable credit ratings from the top three ratings agencies – Fitch Ratings, Moody’s Investor Services and Standard & Poor’s.
“Receiving such favorable terms for the bond sale speaks volumes of the solid financial standing of the Airport Authority and its management strategies,” said Kimberly Becker, the authority’s president and CEO. She said airport projects financed via the bonds will in turn benefit the region through new jobs and other economic investment.
The $127.8 million, three-floor parking plaza at Terminal 2, as well as the $229.47 million federal inspection and international passenger services facility in Terminal 2 West, are both under construction and expected to be completed during 2018.