Little Rock expects to save $2 million a year in debt service by redeeming airport revenue bonds that financed projects at Bill and Hillary Clinton National Airport.
The airport used the proceeds from the 1999 issue to build a parking deck and other improvements at the facility, known at the time as Adams Field.
The $9.7 million of outstanding bonds, with a 2019 maturity, would be paid off with $2.4 million from a reserve fund and $7 million in cash, according to Bobbie Nichols, senior vice president at Stephens Inc. The city pays interest of 5.24% on the outstanding debt.
The Little Rock Municipal Airport Commission approved the restructuring in late December.
Two bond issues due in 2016 may also be called, Nichols said, which would bring the annual debt-service savings to $8.6 million.
The refunding will reduce the airport’s cash on hand to slightly more than $6 million. Nichols said the city expects to restore the cash fund with federal reimbursements on qualified projects, including $7 million a year for airfield maintenance.
Clinton National has $18 million in a restricted account, generated by a $4.50 passenger facility charge, that cannot be spent without federal approval.
A $67 million upgrade to the passenger terminal is almost complete. A second phase to expand the number of gates to 16 from 12 and renovate the baggage area and concourse is expected to cost $75 million.
Little Rock’s airport revenue bonds are rated A2 by Moody’s Investors Service. Standard & Poor’s raised its rating to A from A-minus in October 2012.