The Port of Oakland was able to achieve $29.2 million in present-value debt service savings by selling $345.7 million of refunding revenue bonds — the highest known level of savings achieved by the port on a refunding, officials said. The sale enabled the issuer to smooth debt services payment over the next eight years, a period in which the port's debt remains at peak or near-peak levels.
"We will continue to push the organization to aggressively seek savings, investments, grants, public-private partnerships and business growth to get us back on a track toward competitive sustainability," said Port Commission president Pamela Calloway.
Interest on the bonds is subject to the alternative minimum tax, though it's otherwise tax-exempt. Bank of America Merrill Lynch had priced the bonds with a top yield of 5.2% for the 2031 maturity, according to Thomson Reuters.
The port benefited from pricing the deal in the first week of August, being one of the few issuers in the market as yields plummeted following the federal debt-ceiling pact. The port announced the closing of the bond sale Aug. 19.
Standard & Poor's revised its outlook to positive from stable, affirming its A rating on the senior-lien revenue bonds. Moody's Investors Service and Fitch Ratings affirmed their respective A-plus and A2 ratings on the senior revenue bonds with stable outlooks.
In fiscal 2009, the Oakland airport experienced a 27% decline in passenger boardings on the airport side while also experiencing some softening in maritime traffic, according to a Moody's report.