The Minneapolis-St. Paul Metropolitan Airports Commission sold $162.8 million in bonds to refund a previous issuance.
The commission sold the bonds in two series. The tax-exempt Series 2023A bonds, consisting of $154.5 million, mature between 2025 and 2035, yielding between 3.16% and 3.42%. The taxable Series 2023B bonds, consisting of $8.3 million, mature between 2025 and 2026, yielding between 3.89% and 3.91%. All of the bonds pay interest at 5%. The securities received a rating of A+ from both Fitch Ratings and S&P Global Ratings.
The rating reflects the airport’s “strong air trade service area, which provides a stable and increasing enplanement base underpinned by sizable Origination and Destination (O&D) traffic,” Fitch analysts wrote.
The issuance comes amid a lagging pandemic recovery at Minneapolis-St. Paul International Airport (MSP). While enplanements have returned to prepandemic levels nationally, MSP’s remained at 81% of 2019 levels last year. Through June of this year, enplanements at the airport are at 87% of 2019 levels, compared to more than 100% nationally, according to Fitch.
The slow return to prepandemic levels could in part be due to unforgiving weather, which contributed to an increase in the airport’s operating expenses. This past winter was the third-snowiest ever at the airport, according to the National Weather Service.
The bonds proceeds will refund bonds the commission issued in 2014.
The bonds are limited obligations of the commission, payable by a pledge of the airport’s net revenue.
Ramirez & Co, Inc served as lead underwriter on the issuance, purchasing the bonds for more than $176 million. The price reflected an original issue premium of $14 million.