Massport Sale to Fund Airport Improvements, Refund

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The Massachusetts Port Authority will come to market this week with a sale of $251.7 million of revenue bonds for improvements to Logan International Airport and refunding.

Wednesday's one-day retail sale will precede the institutional sale. Raymond James & Associates is senior manager. Public Financial Management is the financial advisor.

Quasi-public Massport will sell $93.5 million of fixed-rate, new money Series A and B bonds, about half the amount taxable. The remainder, Series C, is mostly an advance refunding of Series 2005B bonds, with some refunding of 2003A and B bonds.

Moody's Investors Service rates the bonds Aa3. Standard & Poor's and Fitch Ratings assign AA-minus and AA ratings, respectively. All three assign stable outlooks.

Authority revenues secure the bonds. In addition to Logan, the authority also operates Hanscom Field in Bedford, Worcester Regional Airport, and Port of Boston maritime properties.

Logan, according to Massport officials, accommodated 30.2 million passengers in 2013, up 3.4% from the previous year, making it the seventh-fastest growing U.S. large-hub market. It sits within the city limits in East Boston, four miles from downtown.

Proposed projects include roadway improvements near the Airport mass transit station, greenway improvements, a new garage at the Logan Express shuttle depot in suburban Framingham, and other infrastructure replacements.

Moody's based its rating on the credit fundamentals of the authority, which it pegged among the strongest of the airports it rates.

"The airport has a strong and improving relative market position in a robust and diverse economy, it is expected to maintain above-average financial metrics for the foreseeable future, and its enplanement base remains among the most diversified and has had above-average growth in recent years," Moody's said.

Massport's board in March revised its debt policy in an attempt to guard its rating. The authority will target a minimum of 2.0 debt-service coverage over its 2014-2018 capital plan period. In a recent investor call, it projected coverage to average 2.29 over that period.

Foley & Lardner LLP is bond counsel. Edwards Wildman Palmer LLP is disclosure counsel. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC is representing the underwriters.

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Transportation industry Massachusetts