DIA sells $720M in revenue bonds for project funding
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Denver International Airport.
Denver International Airport[5] has sold $720 million worth of revenue bonds at a 4.94 percent interest rate.
The bulk of the money from the Airport System Subordinate Revenue Bonds, about $608 million, will help pay for the airport’s six-year capital improvement plan including elements of the South Terminal project, a new parking garage, extending Concourse C to add five gates, and other projects, the airport said Wednesday.
The sale is DIA’s first for subordinate bonds, which are considered junior to the airport's existing senior liens.
Due to their second-in-line position to receive payments in case of defaults, subordinate debt is considered riskier and therefore carries a higher interest rate compared to senior debts.
DIA said its new subordinate bonds, called the 2013A-B Bonds, were rated A2, A and A by the three major credit rating services Moody’s, Standard & Poor’s and Fitch, one notch below the airport’s senior lien bonds.
DIA has $3.897 billion worth of outstanding senior bonds, according to city officials.
“The strong acceptance of DIA bonds issued under the new lien demonstrates the market’s view of Denver International Airport as a financially strong airport,” said Patrick Heck[6], DIA’s CFO.
Airport and city officials called the sale a success and credited DIA’s management and fiscal planning and execution.
“The positive response to this sale illustrates that it is one of the most financially sound airports in the world and expands on a critical fact that Denver is a great place to do business,” said Mayor Michael Hancock[7].
Citi Group was the lead underwriter for the transaction, which involved six investment bands and drew demand from more than 80 investors, the airport said.
Cathy Proctor covers energy, the environment, transportation and construction for the Denver Business Journal and edits the weekly "Energy Inc." newsletter. Phone: 303-803-9233. Subscribe to the Energy Inc. newsletter[8]
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