The Port Authority of New York and New Jersey issued $748 million in bonds to finance capital projects and refund previously issued securities.
The bonds mature between 2030 and 2054, yielding between 2.9% and 4.2%. They pay interest at 5%. The securities received a rating of AA- from Fitch Ratings, Aa3 from Moody’s Investors Service, and AA- from S&P Global Ratings.
The rating reflects the port authority’s “solid credit profile, anchored by its mature, diverse and monopolistic transportation infrastructure asset base,” FItch analysts wrote.
The port authority will use the bond proceeds to fund capital improvement projects, among the largest of which are renovations at John F. Kennedy International Airport and Newark Liberty International Airport. The issuance will also refund bonds that the authority sold in 2012.
Fitch analysts noted that the port authority “still faces longer-term risks around its capital plan, with certain high-profile projects not yet finalized, which could lead to cost increase.”
The port authority runs the airports that serve the New York City metropolitan area, the bridges and tunnels that connect New York and New Jersey, and the port of Newark, which is the largest on the East Coast. The bonds are general obligations of the port authority, backed by its full faith and credit. The port authority recorded $6.6 billion in gross operating revenue last fiscal year, more than half of which came from aviation.
Siebert Williams Shank & Co, LLC served as lead underwriter on the issuance, purchasing the bonds for $827.4 million. Frasca & Associates, LLC acted as financial advisor.