BRADENTON, Fla. — Buoyed by a rating upgrade, Atlanta plans to refund $705.5 million of bonds originally sold to finance improvements at Hartsfield-Jackson Atlanta International Airport.

The city, which owns the airport, expects to price the bonds Tuesday with Siebert Brandford Shank & Co. as the book-runner.

The deal is structured in three series. Series A is $376.37 million of airport passenger facility charge and subordinate lien general revenue refunding bonds, Series B is  $144.14 million of airport general revenue refunding bonds, and Series C is $185.06 million of airport general revenue refunding bonds with interest subject to the alternative minimum tax.

The transaction is generally designed to produce level debt service within existing maturities of the refunded debt.

The offering is expected to achieve estimated present value savings of $47.6 million or 6.6% of refunded par amount, according to Gwendolyn Smith, the city's deputy chief financial officer.

Moody's Investors Service upgraded its senior-lien general revenue bond ratings to Aa3 from A1, and affirmed its A1 ratings on the PFC and subordinate lien bonds. Those ratings apply to the refunding bonds.

"The upgrade to Aa3 for the senior lien bonds is based on the airport's financial and operational strengths, which are well above average even as the airport has recently completed major capital expansion projects," said Moody's analyst Kurt Krummenacker.

The higher rating is also supported by the strong, "vibrant" local economy that is expected to outpace growth in the broader U.S. economy, the financial strengthening of the airport's two major carriers, and no additional debt planned for at least the next four years, he said.

Fitch Ratings assigned its A-plus rating to the senior-lien bonds and A rating to the PFC and subordinate bonds, while Standard & Poor's assigned its A-plus ratings to all the refunding bonds.

In 2012, Atlanta marked its 15th consecutive year as the world's busiest airport with more than 95.5 million passengers. It is also the seventh-busiest origination and destination airport in the U.S.

In fiscal 2013, operating revenues increased by more than 20% over the previous year with net operating revenues increasing by about $60 million, Miguel Southwell, the airport's interim general manager, told prospective investors in a roadshow presentation.

General airport revenue bonds saw debt service coverage of 1.7 times last year, while hybrid PFC bonds realized coverage of 2.64 times. Total general revenues were $497.1 million.

Cash and unrestricted reserves exceeded $763 million providing 3.4 years of cash on hand, said Southwell. With available liquidity added the airport has 1,249 days' cash on hand.

Atlanta's top two carriers — Delta and Southwest — have seen relatively stable enplaned passenger levels the past three fiscal years, he said. The total number of enplaned passengers has grown 4.9% over the airport's 2008 pre-recession record high.

The capital improvement plan includes about $800 million for ongoing and future projects between 2014 and 2017, though no additional debt is anticipated. The city is developing a new master plan for short- and long-term needs through 2030, which is expected to be completed this summer.

The city's financial advisors are First Southwest Co. and Grant & Associates LLC. Frasca & Associates LLC is financial advisor for the Department of Aviation.

Along with Siebert on the deal are Jefferies LLC, PNC Capital Markets LLC, Ramirez & Co., Raymond James, Rice Financial Products Co., SunTrust Robinson Humphrey, and TD Securities.

Hunton & Williams LLP is bond counsel. Greenberg Traurig LLP and Riddle & Schwartz LLC are co-disclosure counsel. D. Seaton and Associates and Gonzalez Saggio & Harlan LLP are co-counsel to the underwriters.

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