Salt Lake City Airport bond sale funds airport reconstruction
- February 14 2017 03:25 PM
The Salt Lake City Department of Airports (SLCDA) announced last week that it had sold off $1 billion in airport revenue bonds. Proceeds from the sale will go toward funding the airport’s $2.9 billion reconstruction program currently in progress.
The order period took place February 8th. Very strong demand and investor confidence resulted in the 30-year bonds being sold at rates below 3.8 percent. Since Salt Lake City Airport (SLC) repaid its last bond issue in 2008, it has been the largest airport in the country with no outstanding debt.
The bonds received credit ratings from three major credit rating agencies. Kroll Bond Rating Agency assigned a long-term rating of AA-minus rating with a stable outlook to the Airport Revenue Bonds. S&P Global Ratings assigned a rating o f A-plus with a stable outlook, and Moody’s Investor Service assigned a rating of A2 with a stable outlook.
“We are pleased with the strong response,” said Ryan Tesch, SLCDA Director of Finance. “It is rare to have the chance to commence a major financing program with a completely clean slate, but that’s what we did and the market clearly responded very favorably.” Additional funding sources for the project include federal grants, passenger facility charges, rental car facility charges and Airport cash. No local tax dollars will be spent on the project.
Salt Lake City is the 25th busiest airport in North America, with more than 330 flights departing daily to 91 nonstop destinations. The reconstruction project began in 2014 and the first phase, which includes the terminal, is expected to be completed in 2020.
The new SLC will include a new terminal, two new concourses and a new parking garage. The priorities being addressed in the reconstruction include replacing obsolete facilities, ensuring a flexible design for future needs and expansion, efficiency and ease in everyday use, cost efficiency and ecological sustainability.
The second phase of the reconstruction will be completed in 2023-2024.