The airport serving Grand Rapids, Michigan, issued $94 million in bonds to finance upgrades to its terminal.
The bonds mature between 2029 and 2054, yielding between 3.31% and 4.49%. They pay interest at 5%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The bonds were sold by the Gerald R. Ford International Airport, which is a component unit of surrounding Kent County.
“The Aaa issuer rating reflects the county’s large and growing tax base that serves as an economic hub of western Michigan,” Moody’s analysts wrote.
The airport will use the bond proceeds to fund the expansion of its terminal and the construction of a new inspection system for checked baggage.
Those upgrades are part of a larger capital improvement plan that will see the airport spend $500 million on projects such as concourse expansion and additional rental car facilities. It is one of the largest capital improvement plans for a small hub airport, according to the city’s destination marketing organization.
The bonds are limited tax general obligations of Kent County, backed by its full faith and credit. The bonds are further supported by a lien on airport revenue. The airport recorded $75.8 million in operating revenue last fiscal year, according to the official statement accompanying the sale of the bonds. That marked an increase of more than 25% over the previous year’s revenue, then a record.
J.P. Morgan Securities LLC served as lead underwriter on the issuance, purchasing the bonds for $99.5 million. The price reflected a premium of $5.7 million and a discount of $200,000. PFM Financial Advisors LLC acted as municipal advisor.