SAN DIEGO – August 3, 2017 – The Airport Authority recently completed a major bond sale, of which proceeds will cover construction costs of the Terminal 2 Parking Plaza and international arrivals facility slated to open in 2018. On July 18, more than $291 million in Subordinate Airport Revenue Bonds were issued, during which the Airport Authority earned the lowest interest rate the organization has ever attained. Proceeds from the sale will also go toward funding vital capital improvement program projects, including airfield and terminal enhancements.
The Airport Authority secured a favorable all-in borrowing cost of 3.74 percent for the bonds, which is a lower long-term rate than comparable issuances in 2010 and 2013. Accessing the market at a favorable interest rate saves an estimated $43.4 million in reduced debt service cost over the 30-year term of the bonds. The bonds also received exceptional demand from investors, with $4 million sold to retail investors and $287 million sold to 80 separate institutional investors.
“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 J. Becker, President/CEO of the Airport Authority. “This sale paves the way for much needed airport development and improvements that will in turn benefit the region through jobs and economic investment.”
The sale included approximately $146 million of Series 2017A (non-AMT) bonds and approximately $145 million of Series 2017B (AMT) bonds.
The bond sale’s advantageous circumstances were due to several factors, including the Airport Authority’s careful timing of market entry for the sale, pricing during a time when rates were more attractive, and its strong financial profile as evidenced by favorable credit ratings for Airport Authority bonds from the nation’s top three ratings agencies: Fitch Ratings, Moody’s Investor Services and Standard & Poor’s.
The Parking Plaza will feature three floors and include approximately 3,000 parking spaces, a net increase of nearly 1,700 spaces from the existing surface lot. With state-of-the-art parking technology, the Parking Plaza will allow motorists to find available parking spaces, reserve spaces in advance and streamline payment. The new international arrivals facility will house Customs and Border Protection and other international passenger arrival services. The facility will help accommodate increased passenger demand and improve the passenger processing experience with reduced wait times.