Citigroup has priced a $165 million private placement deal for the Bahamas' Nassau Airport, a sell-side source said.
Due to the extreme volatility that has been plaguing Treasury rates, this transaction was based on the coupon rather than a credit spread. The deal, which priced last week, was done in a single tranche, 23-year final, 15-year average life, for a 7% quarterly paid coupon, which is a 7.06% bond equivalent yield. There is a delay until November built into the deal. The price talk around the deal was 300 bps to 325 bps above Treasurys.
This funding was raised by the Bahamian Airport Authority for project funding for Nassau.
As market participants predicted, Nassau priced wider than Copenhagen Airport (PPL, 05/26/10). On May 20, the latter priced a $250 million private placement deal at 275 bps above Treasurys for a 6% coupon. The deal was upsized by $30 million the following week. Both airports maintain a BBB- credit rating, however, sources said Copenhagen was viewed more favorably.
The next airport expected to land on the private placement market is Melbourne Airport, while Brisbane Airport is a possibility for later in the year.