DALLAS — Dallas will close on $109.2 million of bonds for a Love Field Airport parking garage Aug. 18 after the tax-exempt debt met strong demand, despite issues surrounding a battle for gates at the remodeled terminal and concourses.
"We were almost six times oversubscribed," said Wayne Placide, the city's financial advisor from First Southwest Co. "It went really well."
With maturities from 2018 to 2035, the all-in cost came to 3.8701%. The bonds drew ratings of A from both Standard & Poor's and Fitch Ratings and A1 from Moody's Investors Service.
"Because we were oversubscribed, we actually were able to get yield reductions across the board," Placide said of the July 22 pricing.
Issued in the name of the Love Field Modernization Corp., the tax-exempt bonds were priced through senior managers Stern Brothers and Goldman Sachs with seven co-managers.
Estrada Hinojosa chief executive Noe Hinojosa Jr. worked with Placide as co-financial advisor.
McCall Parkhurst & Horton and Escamilla and Ponek were co-bond counsel.
The bonds drew ratings of A from both Standard & Poor's and Fitch Ratings and A1 from Moody's Investors Service.
The deal had originally been expected to price at the end of June, but a legal dispute over allocation of gates forced a delay. A supplement to the original preliminary official statement explained the issue involving Southwest, Delta and American Airlines.
U.S. District Judge Ed Kinkeade will hear arguments Sept. 28-29 over which airline gets to use the disputed Love Field gate in late September.
In the meantime, Delta will continue to use the gate subleased from Southwest under an agreement reached July 2.
Southwest had planned to use Gate 15 for its own flights after Delta's six-month agreement to use the gate expired on July 7. However, Delta refused to leave and provided a letter from the U.S. Department of Transportation backing its right to continue using the gate.
Southwest accused Delta of trespassing. The city asked the federal court to clarify the issue after both airlines sued and the federal government intervened on behalf of Delta.
Southwest planned to use 18 of the 20 gates remaining after a 2014 remodeling designed to lift restrictions on long-haul flights from the airport. Virgin America is the other operator at the airport.
The remodeling and downsizing of the airport was financed at Southwest's expense with $446 million of tax-exempt bonds issued in 2010 and 2012.
Since Southwest and Virgin began flying coast-to-coast in October, car traffic and demand for parking has increased sharply. The airport is working to add a third parking garage with the new bond money.
The upcoming bonds for expanded parking would be supported by airport revenues not already pledged to the previous bond issue.
