Miami-Dade County Saves $5 Million Annually in Airport Financing Costs

Miami International Airport, the largest U.S. gateway to Latin America, said the financing costs for its most recent bond sale were about half a percentage point less than an April estimate.

The so-called true interest cost of the securities, which takes into account the timing of the interest and principal payments, was 4.92 percent, compared with an April estimate of 5.44 percent, the airport said in a release yesterday. The lower interest rates will result in net savings of $5 million in annual borrowing costs.

Miami-Dade County issued its last part of more than $500 million in revenue bonds on July 22 for the $6 billion expansion of the airport, which includes additional cargo areas, a new air-traffic control tower and an increase in the area of the terminal building by more than 60 percent.

“We’re thrilled,” said Anne Syrcle Lee, chief financial officer for the Miami-Dade Aviation Department, which operates the airport. “The market conditions were vastly better and we had excellent underwriters who marketed very aggressively.”

Yields on 10-year, top-rated municipal bonds have fallen 40 basis points since April 15, according to the Municipal Market Advisors index.

The county, which shaved about $20 million from the planned sale, was able to sell at a lower face value by pricing many of the notes at a premium, said Lee in an interview. The securities are backed largely by revenue from the airport, which is the biggest international hub for AMR Corp.’s American Airlines.

Underlying Bonds

The underlying bonds are rated A- by Standard & Poor’s, the fourth-lowest investment grade, and A2 at Moody’s Investors Service, the fifth-lowest.

Miami International Airport also said yesterday that its passenger and freight volume beat its forecasts through the first six months of the year as travel to Latin America held up better in the recession than other parts of the world, the group said. Total passenger traffic grew 4 percent through the period, compared with the year before and freight volume grew 26.5 percent over the same period.

To contact the reporters on this story: Simone Baribeau in New York at sbaribeau@bloomberg.net;

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email