CHICAGO — The Wayne County, Mich., Airport Authority, which runs Detroit Metropolitan Airport, will come to market Thursday with $127 million of refunding bonds.
The authority expects to save about $6 million, or 3.4%, by refunding bonds originally issued in 1998 and 2002.
There is no extension of maturity associated with the transaction.
The sale comes as the authority struggles with personnel turmoil that led to the Oct. 31 dismissal of Detroit airport chief executive officer Turkia Mullin after only two months in the position and the replacement of the airport board chairman.
Mullin, former chief of economic development for Wayne County, is at the center of a Federal Bureau of Investigation probe into the awarding of county contracts.
Wayne County Executive Robert Ficano, who last week fired two top aides in connection to the FBI investigation, also asked for the resignation of any airport authority board members with the appearance of a conflict. Board chair Renee Axt, who runs a consulting company that is a registered lobbyist for a firm that has received county contracts and has been subpoenaed as part of the probe, stepped down last week, local reports said. Ficano named a retired local businessman to replace Axt on the seven-member board.
Bond documents note the FBI investigation under its investor consideration section, but say the authority has no reason to believe that it is a target of the probe or that it will have an adverse impact on the airport or bondholders.
The authority’s long-time chief financial officer Thomas Naughton is serving as interim CEO.
Thursday’s bond issue is tentatively divided into two series, $110 million that are subject to the alternative minimum tax and $17 million that aren’t.
The authority last entered the market in December 2010, refunding $848 million to achieve interest-rate savings as well as terminate swaps and shift a chunk of its debt into non-AMT bonds.
Ahead of the sale, Fitch Ratings affirmed its A-minus rating and stable outlook on the airport’s outstanding $2 billion of senior- and subordinate-lien bonds, including this week’s sale. Moody’s Investors Service rates the bonds A2 with a negative outlook and Standard & Poor’s A with a stable outlook.
Analysts praise the airport for its two new terminals, modest future capital needs, and 30-year leases with airlines. But it has experienced years of enplanement declines and is heavily reliant on Delta Airlines, which dominates enplanements.
JPMorgan and Citi are senior managers. Miller, Canfield, Paddock and Stone PLC is bond counsel. Public Financial Management Inc. and D+G Consulting Group LLC are financial advisors.
