The Wayne County Airport Authority (WCAA) sold $375 million in bonds to finance improvements to Detroit Metropolitan Airport (DTW).
The authority sold the bonds in five series. About $247 million worth of the bonds are tax exempt, while the remaining $128 million are taxable. The securities received a rating of A from Fitch Ratings, A1 from Moody’s Investors Service, and AA- from Kroll Bond Rating Agency.
“The ‘A’ rating reflects WCAA’s continued favorable operating and financial long-term profile anchored by its central geographic location, demonstrated essentiality to Delta Air Lines’ (BB+/Stable) global operations, and a fully residual long-term use and lease agreement extending through 2032, which provides the airport with meaningful revenue protection should demand fall unexpectedly,” according to Fitch.
DTW’s year-over-year revenue has increased as it emerges from the COVID-19 pandemic, though its recovery still lags the national average. The airport enplaned 14.1 million passengers last fiscal year, about 77% of fiscal year 2019 levels, according to the official statement accompanying the sale of the bonds. Delta accounted for almost three-quarters of the enplaned passengers at the airport last year.
The issuance comes as DTW enacts its five year capital improvement plan, which runs through fiscal year 2026 and is predominantly debt-funded. Most improvements are focused on airfields, power transmission, and parking. Total projected costs of the improvement plan are estimated at more than $1.1 billion.
WCAA runs and operates Detroit Metropolitan Airport. The bonds are revenue obligations of the authority, payable by airport revenue.
Siebert Williams Shank & Co LLC served as lead underwriter on the issuance.