Projects under San Francisco International Airport’s 10-year capital improvement plan include terminal renovation, construction of a new parking structure, and development of an on-site hotel.

SAN FRANCISCO - The San Francisco Airport Commission is planning to price $481 million of revenue bonds Tuesday.

JPMorgan is pricing the deal, which will be structured as serial bonds maturing from 2029 to 2034, and term bonds maturing in 2044.

The bonds have been assigned A-plus ratings with stable outlooks by all three credit agencies, which cite the airport's strong market position for air travel in the San Francisco Bay Area.

San Francisco Airport, 14 miles south of downtown San Francisco, serves as a major international gateway airport in the San Francisco bay region.

"The rating reflects SFO's strong operational and financial performance within the healthy, yet competitive air trade market in the San Francisco Bay Area," Fitch Ratings said in a credit report. "The airport's fully residual airline agreement and proven management team provide a solid framework for stable and competitive results, however the elevated leverage profile and additional borrowing needs create pressures on the rating."

Fitch considers the airport's debt level high at $4.2 billion, with additional borrowings expected to support capital spending.

The commission has approved a $2.5 billion five-year capital plan and a $4.4 billion 10-year capital plan for fiscal years 2015 through 2024.

The five-year plan includes approximately $2.4 billion in projects that will require the issuance of new debt during the forecast period through fiscal 2019. Other sources for funds include grants, and passenger facility charges.

Tuesday's bond sale will fund new projects under the capital plan, as well as repay around $248 million of commercial paper notes previously issued for interim financing.

Some of the new projects under the five-year plan include renovation of Terminal 1, construction of a multi-level parking structure, and the development of an on-airport hotel, located on a site that was formerly occupied by a Hilton Hotel.

Other projects include runway safety area improvements, modernization of its screening system, and a new air traffic control tower.

"We consider the significant debt the airport will need to issue to finance the capital plan to be a rating limitation," Standard & Poor's said. "We will monitor the effects these projects may have on the airport's financial metrics."

Moody's Investors Service, which gave the bonds an A1 rating, said it expects that the airport will undertake its capital plan projects on an as-needed basis and defer projects if the competitive landscape changes.

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