Salt Lake City, Utah, issued $600 million in bonds to help fund the redevelopment of the city’s airport.
The bonds mature between 2025 and 2053, yielding between 3.34% and 4.28%. They received a rating of Aa2 from Moody’s Investors Service, A+ from S&P Global Ratings, and AA by Kroll Bond Rating Agency.
The rating reflects “our expectation that the financial impact of the capital plan, which is primarily debt financed, can be managed given the airport’s strong starting financial position, supportive long-term airline agreement and favorable traffic growth prospects,” Moody’s analysts wrote.
The bonds add about $400 million in financing for the airport’s $4.1 billion redevelopment program, known as the New SLC. (The remainder of the funds will pay for costs of the bond issuance and deposits to required reserves.) Airport officials have said that the airport’s new design, which reduces the amount of time planes idle and taxi prior to takeoff, will reduce greenhouse gas emissions by 15,000 metric tons.
Ground broke on the project in 2014. The first phase of construction completed in 2020, with the next phase slated to finish in October of this year. When the project is finished (currently projected for 2027), it will constitute the first new hub airport constructed in the United States this century, according to the American Society of Civil Engineers, an industry group.
The bonds are limited obligations of the city, backed by airport revenue. In fiscal year 2022, the airport collected $259 million in operating revenue. By comparison, in fiscal year 2019, the last year before phase one of New SLC completed, the airport generated $173 million in operating revenue.
BofA Securities Inc served as lead underwriter on the issuance, purchasing the bonds for $655 million. The price reflected a net issue premium of $55 million.