Charlotte, North Carolina, sold $367 million in bonds to finance improvements to its airport.
The city sold the bonds in two series. The tax-exempt Series 2023A bonds, consisting of $257 million, mature between 2025 and 2053, yielding between 3.04% and 4.33%. The taxable Series 2023B bonds, consisting of $110 million, also mature between 2025 and 2053, yielding between 3.73% and 4.6%. The securities received a rating of Aa3 from Moody’s Investors Service and AA- from Fitch Ratings.
“The rating reflects the large hub airport’s robust service area, underpinned by a strong and diverse MSA and significant hubbing operations, airline leases with a favorable cost recovery framework that produces strong coverage metrics at extremely low airline costs, robust liquidity levels, and proactive capital management,” Fitch analysts wrote, referring to the Charlotte metropolitan statistical area.
The issuance comes as airports across the country make upgrades to accommodate surging passenger demand, which has eclipsed prepandemic levels.
The bond proceeds will fund projects to improve Charlotte Douglas International Airport, a hub for American Airlines. These projects will add a fourth parallel runway, extend and add new taxiways, and expand one of the airport’s concourses.
Charlotte Douglas was the eighth busiest airport in the United States last year by number of enplaned passengers, according to data from the U.S. Department of Transportation. It enplaned more than 25 million passengers in fiscal year 2023, the highest such figure in the airport’s history.
The bonds are special obligations of the city, payable by a pledge of some airport revenues.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $392 million. The price reflected an original issue premium of $26 million.