Boise City, Idaho, issued $86 million in bonds to finance improvements at its airport.
The bonds mature between 2027 and 2054, yielding between 5.166% and 5.849%. They received underlying ratings of BBB+ from Fitch Ratings and A3 from Moody’s Investors Service, and an insured rating of AA from S&P Global Ratings.
The city will use the bond proceeds to fund the development of a rental car center at Boise Airport (BOI). The bonds are expected to cover only a portion of the project’s final costs, which are anticipated to be around $110 million.
The rating reflects the airport’s “relatively small, regionally focused but predominantly origin and destination (O&D) traffic base with positive socio-economic and strong enplanement growth trends, supporting a modest-sized volume for rental car transactions,” Fitch analysts wrote.
By expanding its rental car facilities, the airport may be hoping to capitalize on increasing passenger demand. Enplanements reached a record 2.37 million last year, marking an increase of more than 75% from a decade prior, according to the official statement accompanying the sale of the bonds.
The bonds are limited obligations of Boise City, payable by airport fees levied on rental car users. Boise City charges a fee of $7.95 per day, which will increase to $8.95 per day in October. It collected $5.7 million in revenue from these charges last fiscal year, according to the bond documents.
Raymond James & Associates, Inc served as underwriter on the issuance. PFM Financial Advisors LLC acted as municipal advisor.