The New York Transportation Development Corporation sold $2 billion in taxable bonds to reduce refinancing risk as John F. Kennedy International Airport (JFK) builds a new terminal.
The bonds mature between 2038 and 2060, yielding between 4.6% and 5.56%. They received insured ratings of AA from S&P Global Ratings, A1 from Moody’s Investors Service, and AA+ from Kroll Bond Rating Agency, and uninsured ratings of Baa3 from Moody’s, BBB- from Kroll, and BBB- from Fitch Ratings.
The rating reflects “the high development costs, construction constraints and interface challenges associated with the construction of the New Terminal One (NTO) at John F. Kennedy International Airport,” Moody’s analysts wrote.
After a slow start, the project to modernize one of America’s flagship airports is well underway. The most extensive part of the project is a $10 billion renovation to create a new international base at Terminal One.
The airport began construction on the NTO project in June of last year, with the goal of completing the first phase by June 2026. The project ramped up in May 2023, with construction entering a period officials called more “intense.”
So far, the $19 billion project is progressing on time and on budget, with about one-fifth of construction costs for the first phase paid so far. Additional phases of the project will require the airport to sell more debt.
The bond proceeds will refinance existing debt to reduce risk.
The bonds are special and limited obligations of a conduit issuer, JFK NTO LLC, payable by its revenue.
Citigroup Global Markets Inc served as lead underwriter on the issuance, purchasing the bonds for $1.99 billion. The price reflected a discount of almost $10 million. Frasca & Associates, LLC and Samuel A. Ramirez & Co, Inc served as financial advisors.