Dallas Fort Worth International Airport (DFW) sold $691.3 million in bonds to make capital improvements and refund a previous issuance.
The airport sold both serial bonds and term bonds. The serials, consisting of $624.6 million, mature between 2024 and 2042, yielding between 3.19% and 4.05%. The term bond, consisting of $66.7 million, matures on November 1, 2047, and yields 4.19%. All of the securities pay interest at 5%. They received a rating of A1 from Moody’s Investors Service, A+ from Fitch Ratings, AA from Kroll Bond Ratings Agency, and A+ from S&P Global Ratings.
“The rating reflects DFW’s underlying favorable revenue risk profile anchored by an expanding regional economy as well as the airport’s role as a primary hub for American Airlines, Inc,” according to Fitch.
The issuance comes as a series of near misses at U.S. airports redraw attention to aviation infrastructure, much of which has not been upgraded in decades. The plurality of funding in the airport’s $9.2 billion capital improvement program, about $3.7 billion, will go toward infrastructure improvements. An additional $2.7 billion will be directed toward expanding the airport’s central terminal area. The airport is also adding a sixth terminal, with an anticipated cost of $1.6 billion.
The bonds are limited obligations of the cities of Dallas and Fort Worth, payable by airport revenue.
Piper Sandler & Co served as lead underwriter on the issuance, purchasing the bonds for a discount of $2.5 million.