City prices $561.86 million in third and final bond sale for Airport Terminal Modernization Project
On behalf of the City of Kansas City, Mo., on October 14th, the Kansas City Industrial Development Authority (“KCIDA”) successfully priced $504.7 million of its Series 2020A Special Obligation Bonds (AMT) and $57.2 million of its Series 2020B Special Obligation Bonds (non-AMT) and $70.38 million of its Series 2020C Taxable Airport Special Obligation Refunding Bonds for the Airport Terminal Modernization project through a negotiated sale led by Morgan Stanley & Co. LLC as senior manager. The issuance was authorized by KCIDA resolution and City Ordinance Nos. 200703 and 200706 to appropriate and fund the project account.
The proceeds of the Series 2020A and B bonds will be used to fund costs of the City’s $1.5 billion Airport Terminal Modernization project, the Series 2020C bonds will be used to refund the Series 2013A General Improvement Airport Revenue Bonds to achieve debt service savings. Edgemoor Infrastructure and Real Estate LLC is the developer selected by the City for the terminal modernization project. The bonds are secured by net airport revenues paid to the trustee by the City, subject to City Council appropriation.
“Not only will this KCI Airport bond issuance save nearly $7 million annually over previous cost estimates, but it will help ensure that construction of our state-of-the-art new terminal remains on time, on budget, and one of its kind,” said Kansas City Mayor Quinton Lucas. “I applaud our financing team and City staff for a successful pricing, and I thank the women and men working each day to Build KCI.”
“We capitalized on historically low interest rates when completing the final phase of financing for the New Terminal project. This 1.6% reduction in interest rate from our original financial modeling results in nearly $7 million dollars of annual savings. We will continue working toward the successful on-time and on-budget completion of the New Terminal and are gratified to be saving money over the repayment of these bonds.” said Pat Klein, Director of Aviation.
The issuance follows the $985 million Series 2019 issuance that funded the first phase costs of the project. It is currently anticipated that the Series 2020 bonds for the project will be the final issuance. The phased issuance allowed the City to save on interest costs associated with the financing of the project.
The bonds are rated “A2” by Moody’s Investor’s Service, “A-” by S&P Global Ratings, and “A” by Fitch Ratings, both S&P and Fitch reported the ratings outlook as negative, while Moody’s outlook remains stable. Morgan Stanley led the underwriting syndicate for the sale, which included J.P Morgan Securities LLC, Raymond James & Associates, Samuel A. Ramirez & Co., Stifel Nicolaus & Company, Inc., Valdés & Moreno, Inc., and Backstrom McCarley Berry & Co., LLC. Hilltop Securities, Inc. and Moody Reid Financial Advisors served the City on the transaction as co-financial advisors. Kutak Rock, LLP, The Hardwick Law Firm, LLC, and Martha E. Schach, Attorney at Law, LLC served as co-bond counsel on the transaction. BOKF, NA serves as trustee on the issue.
Interest in the issue was strong, as over $1.13 billion in orders were submitted on the 2020A and B Bonds, resulting in the issue being two times oversubscribed. Seventeen of the potential investors on the Series 2020A and B bonds submitted orders of $20 million or more. Based on the very favorable rates received, issuance of the taxable refunding bonds provides over $15.26 million in gross debt service savings. The overall true interest cost, or average rate, on the three bond series was 3.616%.
2022 Charlotte Douglas International Airport Report of Achievement
Giving back to the community is central to what Charlotte Douglas International Airport and its operator, the City of Charlotte Aviation Department, is about, and last year was no different.
Throughout 2022, while recovering from the COVID-19 pandemic, we continued our efforts to have a positive impact on the Charlotte community. Of particular note, we spent the year sharing stories of how Connections Don't Just Happen at the Terminal - from creating homeownership and employment opportunities to supporting economic growth through small-business development and offering outreach programs to help residents understand the Airport better.
This whitepaper highlights the construction projects, initiatives, programs and events that validate Charlotte Douglas as a premier airport.
Download the whitepaper: 2022 Charlotte Douglas International Airport Report of Achievement.