WASHINGTON — The Maryland Transportation Authority will price more than $260 million of tax-exempt bonds to refund 2002 bonds and to finance a passenger walkway and tunnel for the Baltimore-Washington International Thurgood Marshall Airport, according to bond documents released Tuesday.
The competitive sales for BWI, scheduled for April 11, will comprise two different sets of bonds in three series, according to the preliminary official statements. Baltimore-based McKennon Shelton & Henn LLP will serve as counsel for all the bonds.
The MTA plans to sell a total of $211.4 million of refunding bonds, including $71.8 million of Series A and $135.9 million of Series B bonds.
The bonds, backed by revenue from parking fees earned from the airport’s more than 11,000 parking spaces, will refund a 2002 issuance as well as fund the debt-service reserve fund for the 2012 bonds.
An MTA spokesperson said the authority prefers not to speculate on the level of present-value savings that the refunding will produce. The refunding bonds have been assigned ratings of A2 from Moody’s Investors Service, A from Standard & Poor’s and A-minus from Fitch Ratings.
The authority will also price $50.9 million of bonds backed by passenger facilities fees to finance construction of a tunnel walkway between the airport’s passenger concourses.
This project, the official statement says, will involve “construction of a passenger connector hallway between the secured side of Concourses B and C in order to allow connecting passengers the ability to move freely between Concourses B and C without having to be rescreened at a passenger screening checkpoint of the other concourse.”
Passenger facilities charges are a per-passenger fee of up to $4.50 that airports can charge to fund certain types of projects specified by the Federal Aviation Administration. They are collected by airlines on behalf of airports.
Airports frequently back bond issuances with PFCs, and during late 2011 and early 2012 they sought to get the $4.50 cap removed by federal lawmakers during reauthorization of FAA programs. That did not happen, but the PFC bonds earned ratings of A2 from Moody’s, A from S&P and A from Fitch.
Both sets of bonds are subject to the alternative minimum tax, another provision that airport groups tried in vain to get Congress to lift in the FAA reauthorization law signed earlier this year.
BWI has experienced stronger-than-average growth over the past decade, with enplanements growing 0.9% between fiscal 2001 to 2011, compared to 0.8% nationwide. the authority said. The airport draws passengers from and destined for the entire Washington, D.C., metrarea, including northern Virginia, the District of Columbia, and northern Delaware.
The issuances are the beginning of what is shaping up to be an aggressive year of debt financing for the MTA, which didn’t issue any debt last year, according to Thomson Reuters.
If the authority also goes ahead with plans to price $260 million in bonds near the end of May 2012, it will have issued more debt than any year since 2008, when it sold $998.3 million of bonds.
The bond transactions are scheduled to close on April 25.