DALLAS – Dallas-Fort Worth International Airport will complete nearly $1 billion of refinancing for 2012 with a $301 million deal scheduled to price next week.

The 2012G series, reaching final maturity in 2035, will refinance series 2002A and 2004B with tax-exempt revenue bonds that are not subject to the alternative minimum tax, according to the airport’s co-bond counsel. The firms of Bracewell & Giuliani, McCall Parkhurst & Horton and Newby Davis share bond counsel duties.

The refunding is expected to produce $28.9 million in net present value savings, officials indicated.

The senior manager for the deal is Siebert Brandford Shank & Co., with Stifel, Nicolaus & Co., Citi, and Cabrera Capital Markets as co-managers.

First Southwest Co. and Estrada Hinojosa & Co. are co-financial advisors.

The issue comes on the heels of a similar sized refunding in September.  DFW is also remodeling its four original terminals under a $1.9 billion bond program and watching the progress of major tenant American Airlines’ plan to emerge from bankruptcy protection.

The AMR Corp.’s American Airlines and American Eagle represent 85% of the airport’s passenger traffic and landed weights, according to the preliminary official statement for the upcoming deal.  In fiscal year 2011, American and its American Eagle commuter airline contributed $173 million or 30% of DFW’s operating revenue.

“Any significant financial or operational difficulties incurred by AMR could have a material adverse effect on the gross revenues of the airport,” the POS warned.

Despite those caveats, DFW officials have witnessed strong demand for the airport’s debt.

Ratings of A-plus from Standard & Poor’s and Fitch Ratings and A1 from Moody’s Investors Service were affirmed.  Moody’s and Fitch maintain negative outlooks on the ratings while the Standard & Poor’s outlook is stable.

“Resolution of the negative outlook will be closely aligned with future announcements from American about their plans for operating at the airport, as well as the airport's ability to meet its projections,” wrote Moody’s analyst Kurt Krummenacker.

Standard & Poor's credit analyst Todd Spence cited DFW’s status as American’s largest hub as supporting the A-plus rating.

The cities of Dallas and Fort Worth, which jointly issue debt for the airport, expect to issue about $350 million in the next two months for the Terminal Renewal and Improvement Program known informally as TRIP.

The airport has $4.48 billion of debt outstanding after this deal, according to the POS.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.