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Lambert Airport Bonds A Big Hit With Investors
The Lambert Airport refunding transaction provides several benefits for the city, airport, signatory airlines and bond investors.
June 23, 2011
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This article is 13 years old. It was published on June 23, 2011.
ST. LOUIS, June 23, 2011— The city of St. Louis today sold $29.5 million in refunding bonds to refinance some previously issued, higher cost Lambert Airport debt. Major institutional investors put in significant orders for the Series 2011 Lambert-St. Louis International Airport Refunding Bonds. Demand for the four year bonds was so strong that after the end of the order period bond yields were reduced by 13 to 15 basis points for maturities ranging from 2012 to 2015. The timing of the city's bond sale was extremely opportunistic given the lack of short term municipal paper and rather robust demand for 'Baa1/A-' rated bonds.
"On balance, this refunding transaction represents a 'win-win' for everyone involved. We are all very pleased with this sale and my office will continue to work hard with Lambert officials to ensure the airport's finances remain strong," said Comptroller Darlene Green.
The Lambert Airport refunding transaction provides several benefits for the city, airport, signatory airlines and bond investors. The transaction produces annual debt service savings of approximately $1.5 million per year for four years, thereby reducing payments to be made by the airport's signatory airlines. The bond financing allows the city to deposit over $2 million in additional funds into the debt service stabilization fund. The transaction allows the airport and the city to fully fund the debt service reserve fund for all outstanding airport bonds. These transaction benefits allowed Moody's Investors Service to change the airport's bond rating from 'Baa1' (negative outlook) to 'Baa1' (stable outlook). In addition, Standard & Poor's rated the 2011 Airport Refunding Bonds even higher than Moody's at 'A-' (negative outlook).
"This refinancing comes at a critical time for us as we have just completed a new five-year use and lease agreement with the airlines. We are thrilled at the cost savings it will generate for the airport and it reaffirms our commitment to the airlines to continue seeking opportunities to lower costs," said LambertAirport Director Rhonda Hamm-Niebruegge.
Lambert-St. Louis International Airport is an Enterprise Fund Department of the City of St. Louis. It is wholly supported by airport user charges. No general fund revenues are used for the operation, administration, promotion or maintenance of airport facilities.
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"On balance, this refunding transaction represents a 'win-win' for everyone involved. We are all very pleased with this sale and my office will continue to work hard with Lambert officials to ensure the airport's finances remain strong," said Comptroller Darlene Green.
The Lambert Airport refunding transaction provides several benefits for the city, airport, signatory airlines and bond investors. The transaction produces annual debt service savings of approximately $1.5 million per year for four years, thereby reducing payments to be made by the airport's signatory airlines. The bond financing allows the city to deposit over $2 million in additional funds into the debt service stabilization fund. The transaction allows the airport and the city to fully fund the debt service reserve fund for all outstanding airport bonds. These transaction benefits allowed Moody's Investors Service to change the airport's bond rating from 'Baa1' (negative outlook) to 'Baa1' (stable outlook). In addition, Standard & Poor's rated the 2011 Airport Refunding Bonds even higher than Moody's at 'A-' (negative outlook).
"This refinancing comes at a critical time for us as we have just completed a new five-year use and lease agreement with the airlines. We are thrilled at the cost savings it will generate for the airport and it reaffirms our commitment to the airlines to continue seeking opportunities to lower costs," said LambertAirport Director Rhonda Hamm-Niebruegge.
Lambert-St. Louis International Airport is an Enterprise Fund Department of the City of St. Louis. It is wholly supported by airport user charges. No general fund revenues are used for the operation, administration, promotion or maintenance of airport facilities.
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Contact Information:
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Department:
Office of the Comptroller
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Topic:
Local Government Offices, Agencies, and Departments
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