Denver, Colorado, sold $586.8 million in bonds on behalf of Denver International Airport (DEN).
The city sold the bonds in two series. The tax-exempt Series 2023A bonds, consisting of $316 million, mature between 2024 and 2043, yielding between 3.33% and 4.31%. The taxable Series 2023B bonds, consisting of $270.8 million, also mature between 2024 and 2043, yielding between 4.12% and 4.73%. The securities received a rating of A1 from Moody’s Investors Service, A+ from S&P Global Ratings, and A+ from Fitch Ratings, which assigned a positive outlook.
The rating reflects “the airport’s strong operational characteristics including its standing as one of the world’s busiest airport[s], benefitting from its strategic location as a connecting hub within the large, diverse and growing Denver region,” Fitch analysts wrote.
DEN was one of the first airports to recover from the COVID-19 pandemic. The airport served almost 70 million passengers last year, beating 2019 levels even as airports across the country lagged prepandemic performance. In 2022, United Airlines accounted for almost half of DEN’s enplanements, and Southwest Airlines accounted for about one-third.
The issuance comes as the airport enacts its capital improvement plan, which calls for $2.9 billion in spending on expansion for new infrastructure assets and maintenance projects through 2027. The airport is in the process of building a new hall at its largest terminal, expanding a concourse, and rehabilitating runways, taxiways, and loading areas. The so-called Great Hall Project is the largest improvement, with the city estimating a total cost of $1.3 billion when the project completes in 2028.
Ratings analysts said the airport’s capital plan could soon be buoyed by an upgrade to its credit rating. “A rating upgrade is likely within the next one to two years should clarity into DEN’s future capital needs beyond the current CIP result in metrics at least consistent with present levels,” according to Fitch.
DEN is one of the fastest growing airports in the United States, and the third-busiest in the world by total passenger traffic, according to statistics compiled by Airports Council International, an industry group. The bonds are special obligations of the city, payable by airport revenue.
Ramirez & Co, Inc served as lead underwriter on the issuance, purchasing the bonds for $626 million. Frasca & Associates, LLC served as municipal advisor.