The San Diego County Regional Airport Authority has completed a major bond financing totaling US$1.062bn.
The combination of the bond sales in 2021 and 2023 has provided US$2.35bn toward the projected US$3.4bn cost of San Diego International Airport’s Terminal 1 project. The first phase of this project is set to open in late summer 2025.
“The bond sale will help us realize our collective purpose to create an exceptional airport experience for the community and the world,” said Kimberly Becker, president and CEO of the airport authority. “This will also help San Diego International Airport to continue to serve as an economic driver for the region in terms of jobs and tourism.”
The 2023 bond sale was a combination of US$75m in Senior Series A (non-AMT) bonds and US$987m in Series B (AMT) bonds with a true interest cost of 5%. The proceeds will provide funding for terminal and roadway construction, as well as airside projects as part of the New T1 program.
Investor outreach and one-on-one investor discussions by the airport authority and its banking and financial advisory team revealed strong interest in the bonds. Despite a volatile market and increasing interest rates, investors placed more than US$3.4bn of orders for the bonds. The bond sale’s performance in a challenging market environment was due to several factors, including the airport authority’s financial profile as evidenced by credit ratings for airport authority bonds from Fitch Ratings and Moody’s Investor Services.
Proceeds from this bond sale and remaining proceeds from the 2021 bond sale are expected to fund ongoing construction at least through mid-2025, at which time the airport authority anticipates another bond sale for additional New T1 funding.
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