BRADENTON, Fla. — The Charleston County Airport District in South Carolina will be in the bond market for the first time in nine years to finance a portion of Charleston International Airport's terminal redevelopment and improvement program.

The Airport District plans to price $174 million of new money airport revenue bonds for retail Tuesday and on Wednesday for institutional investors.

The proceeds will help upgrade the 30-year-old terminal, adding new gates, and responding to requirements of the Transportation Security Administration, according to airport finance director Judith Olmstead. The airport district will contribute $29.6 million in cash toward the upgrades.

Another $43.5 million in taxi lighting and related improvements are slated in the next five years at the small hub airport, which is a joint use facility with the U.S. Air Force.

The bond offering is structured as $144.5 million of tax-exempt bonds subject to the alternative minimum tax and $29.5 million of non-AMT bonds. They are expected to have a 10-year call provision.

The preliminary schedule calls for the Series A bonds to have serial maturities between 2017 and 2033, and term bonds of $40.8 million in 2038 and $23.7 million in 2041. The Series A bonds will have a second lien on revenues and capitalized interest until September 2015. When the district's 2004 refunding bonds mature in 2015, the 2013 bonds will have a first lien on revenues.

The Series B bonds will have a single term maturity in 2043. All bonds are structured to provide level annual debt service.

"I think the Charleston deal will do just fine, as long as the market remains fairly stable," a trader said when asked interest by investors. "I think the key to how well the deal does is the pricing."

The trader noted that Dallas-Fort Worth International Airport priced $225 million of A-rated AMT revenue refunding bonds Aug. 14. That deal sold with all-in yield of 3.88%.

"I don't think there are many balances around, and I think the [DFW] deal was a success" the trader said, who added that the success of the sale was an interesting development in light of the U.S. Justice Department's suit opposing the merger of DFW's largest tenant, American Airlines, with US Airways.

At Charleston International, the top carriers are Delta, US Air, and Southwest. After the merger between American and US Air the combined airline would have 30% market share, according to the preliminary official statement. It also said the impact of the merger could not be predicted.

Moody's Investors Service assigned an A1 rating to the airport district's bonds. Moody's also changed the outlook to negative from stable.

"The negative outlook reflects the size and scope of a construction program that will transform the airport but also create risks that will need to be carefully managed, including the potential for cost over-runs, delays, and airport disruptions, combined with unexpected management changes at a sensitive time," said Moody's analyst Myra Shankin. "These challenges have the potential to put downward pressure on the rating."

Standard & Poor's assigned an A rating to the new bond issue, and said the outlook is stable. S&P also raised its rating on the district's 2004 bonds to A-plus from A due to expected strong debt service coverage through final maturity in 2015 on a lien that is now closed.

"I would just like emphasize we have been planning this [improvement program] for many years and our long-standing goals are stability and conservatism," Olmstead said. "We have a good percentage of non-aeronautical revenue and have been able to maintain small increases in expenses."

Airport parking is staffed by district employees, so the revenues are retained by the district, she said. The district has more than 1,000 days cash-on-hand and does not expect to go below 550.

With the joint use agreement at Charleston International, the Air Force maintains the airport's 7,000-foot runway and its 9,000-foot runway, according to Olmstead.

The Boeing Co.'s 787 Dreamliner assembly plant is located adjacent to the airport on 265 acres. It employs 6,000 workers.

Boeing recently announced plans to add a $1 billion expansion of its plant, and is in the process of purchasing 320 acres from the airport district. The expansion is expected to create 2,000 jobs over the next eight years.

Bank of America Merrill Lunch is the book-runner for the bonds. Raymond James & Associates Inc. and Wells Fargo Securities also underwriting the deal.

Public Financial Management Inc. is financial advisor.

Peck, Shaffer & Williams LLP and Howell Linkous & Nettles LLC are co-bond counsel. Parker Poe Adams & Bernstein LLP is underwriters' counsel.

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