Logan Airport the focus of Massport revenue bond sale

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Massachusetts Port Authority expects to price $461 million of revenue bonds through a negotiated sale primarily to accommodate growth at Boston’s Logan International Airport.

The retail and institutional sales are scheduled for Tuesday and Wednesday, respectively.

Citi is senior manager. Loop Capital Markets and Bank of America Merrill Lynch are co-managers, according to bond documents.

The sale will include $155.2 million of Series 2019B bonds not subject to the alternative minimum tax and $305.9 million of Series 2019C AMT bonds.

Logan, the 16th-busiest U.S. airport with just over 20 million enplanements last year, has had average enplanement growth of 5% over the past five years with strong diversity across airlines, according to Alan Schankel, a managing director at Janney Capital Markets. Logan’s biggest carrier, JetBlue, accounts for only 28% of combined domestic and international enplanements.

Financed projects, part of Massport’s fiscal 2019 to 2023 capital program, include completion of the reconfiguration of Terminals B and C, including roadways; and the modernization of Terminal E.

The capital program totals $4.4 billion, including $1.8 billion from third-party or non-recourse funding. Authority equity funds 54% of the program, while other sources include the Omni Summer Street Hotel downtown and the Parcel K mixed-use development along the South Boston waterfront.

Bond proceeds will also support roadway and airside improvements and $400 million in maritime projects related to container and cruise facilities at the Port of Boston.

Moody’s Investors Service rates the bonds Aa2. Fitch Ratings and S&P Global Ratings rate them AA. All three assign stable outlooks. Moody’s called Logan one of the strongest airports it rates.

Massport dominates the New England market. In addition to Logan, it owns Hanscom Field; Worcester Regional Airport; Conley Terminal; the Boston Autoport; Flynn Cruiseport Boston; and South Boston real estate properties.

On June 27, the authority board named Lisa Wieland, its ports director since 2015, its chief executive by a 5-2 vote over Brian Golden, the current head of Boston Planning & Development, which is the former Boston Redevelopment Authority. The firm Isaacson Miller Inc. conducted a nationwide search.

John Pranckevicius has been acting CEO since November.

Wieland is one of three women serving on the U.S. Department of Transportation maritime system national advisory committee. She succeeds Thomas Glynn, who left after six years and is now a Harvard senior official overseeing the university’s land-use projects in Boston’s Allston neighborhood.

Since fiscal 2014, Massport’s revenues have risen on average annually at 7.7%, compared with 4.9% for expenses, acting director of administration and finance/ secretary treasurer Anna Tenaglia said on an investor call. Debt service coverage, she said, is strong at 3.43 times in FY2018.

Airport investment is a pillar of Massport’s latest strategic plan, which began in 2015, along with revitalizing the maritime mission, developing and protecting real estate assets and meeting rising demand.

“Boston Logan Airport is in a service area that is a rapid-growing sector,” said Eliot Lees, a vice president of ICF Aviation, whose market study appeared in the bond offering’s official statement.

Logan has risen from 20th nationally to 16th in the last eight years.

“The growth is substantial, particularly in the international sector, but also domestic, much faster growth than the nation as a whole, and its peer group,” Lees said. “And at the same time it is retaining its very strong origin-and-destination characteristic.”

O&D has held at roughly 95% over 10 years, Lees added.

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Infrastructure Sell side Transportation industry Primary bond market Massachusetts Port Authority Massachusetts