Favourable market conditiions have led to San Diego International Airport getting a much lower interest rate on nearly $600 million in revenue bonds issued to help fund its 'Green Build' Terminal 2 expansion programme and other projects outlined in its ongoing Capital Improvement Programme (CIP).
“Everything just lined up,” admits Vernon Evans, chief financial officer for the San Diego County Regional Airport Authority. “The market was good, we hit it at the right time, we had little debt, and the investors were hungry for our paper.
“There was such a demand for the bonds that they were over-subscribed by an average of 3.5 times the amount of bonds available."
The airport authority was able to secure an interest rate of 4.38% for the bonds – one of the lowest rates to date in the US for an airport-related long-term bond sale – which is estimated will save it more than $40 million over the 30-year term of the bonds.
And it believes that the success of the largest bond sale in the airport's history means that it now won't have to issue any more more bonds for The Green Build/CIP until 2012 at the earliest.
“We are pleased to have achieved such favourable terms for this bond sale,” says Thella F Bowens, San Diego's president and CEO. “The sale under these terms significantly strengthens our financial plan for The Green Build project, which benefits the entire region during construction, with jobs in the community and state-of-the-art facilities upon completion in 2013.”
The Green Build will help meet the region’s current and future demand for air travel, with 10 new gates, expanded passenger waiting areas, a dual-level roadway with kerbside check-in, additional security lanes, expanded concessions, and airfield improvements.