BRADENTON, Fla. - The New Orleans Aviation Board plans to bring $590 million of general airport revenue bonds to market amid an above-average issuance calendar this week.
The bonds, pricing Thursday by negotiation, will help finance a new, 688,000-square-foot terminal with 30 gates at Louis Armstrong New Orleans International Airport as well as a 2,000-space parking garage and related facilities.
The deal comes to market during a week in which $9.3 billion in offerings are scheduled, according to Interactive Data.
"The new-issue slate is above average for this time of year when issuance historically slows," Municipal Market Analytics, Inc. said Monday. "This could complicate new deals competing for investor attention."
The Aviation Board's deal is expected to be structured as $533 million in revenue bonds with interest subject to the alternative minimum tax, and $57 million of revenue bonds that are not subject to the AMT.
Citi is the book-runner. Other underwriters on the transaction are Backstrom McCarley Berry & Co., Blaylock Beal Van LLC, Dorsey & Co., Harvestons Securities Inc., Loop Capital Markets, Siebert Brandford Shank & Co., and Sisung Securities Corp.
The 30-year, fixed-rate bonds will be on parity with outstanding senior lien GARBs. The deal is expected to have serial and term bonds, according to the preliminary official statement.
The bonds are rated A-minus by Fitch Ratings and Standard & Poor's, and A3 by Moody's Investors Service. All have stable outlooks.
Analysts said the ratings are based on the airport's passenger growth since Hurricane Katrina in 2005, strong liquidity, and lack of nearby competition.
Challenges faced by the Aviation Board include construction risk, the addition of a large amount of debt, a long-term airline use and lease agreement that expires in December though a longer agreement is being negotiated, and exposure to the cyclical nature of a tourism-based economy, according to analysts.
New Orleans Aviation Board is replacing the airport's 56-year-old terminal, which is too big at 1.2 million-square-feet and difficult to maintain. With a smaller footprint, the new terminal will cost significantly less to operate, and is expected to reduce airline costs when it opens in 2018.
Frasca and Associates LLC is financial advisor to the board.
Foley & Judell LLP and Auzenne & Associates LLC are co-bond counsel. Breazeale, Sachse & Wilson LLP and Golden Holley James LLP are co-underwriters' counsel.
