An airport board in central Kentucky sold $47.3 million in bonds to finance improvements at the primary airport in the state’s second-biggest city.
The Lexington-Fayette Urban County Airport Board issued the bonds in three series. The tax-exempt 2023 Series A bonds, consisting of $29.2 million, mature between 2027 and 2053, yielding between 3.52% and 4.81%. The taxable 2023 Series B and 2023 Series C bonds, together consisting of $18.1 million, mature between 2033 and 2053, yielding between 4.33% and 6.124%. The securities received a rating of Aa2 from Moody’s Investors Service and AA from S&P Global Ratings.
The rating reflects “the stable operating performance of the airport in the recent past resulting in healthy liquidity and ample debt service coverage,” Moody’s analysts wrote.
The bond proceeds will finance the expansion of Lexington’s Blue Grass Airport, where much of the infrastructure was designed for lower passenger demand. In August, the airport invited Kentuckians to comment on ways to meet growing demand for flights. By October, the airport had announced that it would build a new, $15.5 million hangar for corporate airplanes. It is now considering proposals to expand its terminal, roads, and parking lots.
The airport board will also use the proceeds to refund securities it issued in 2009 and 2019.
Lexington is the second-most populous city in Kentucky, with a population of 320,000. The bonds are general obligations of the urban county government, payable by airport revenue and backed by the county government’s full faith and credit.
Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds for almost $49 million. The price reflected a premium of almost $2 million. Hilltop Securities Inc served as financial advisor.