Atlanta Airport Saves in $706 Million Debt Offering: Muni Deals

Hartsfield-Jackson Atlanta International Airport, the world’s busiest, plans for even more passengers to throng its terminals, which may benefit bondholders.

Atlanta, which owns the airport, will sell about $706 million of mostly tax-exempt debt this week backed by revenue from the operations, deal documents show.

“Current scheduled seat projections for the airlines reflect an increase of approximately 1.5 percent for the next six months, and we are optimistic this growth, combined with continued growth in international enplanements, will continue into fiscal year 2015,” Reese McCranie, an airport spokesman, said by e-mail.

The airport, where Delta Air Lines Inc. is based, served about 95.5 million passengers in 2012, bond documents say.

The bonds will refinance securities and may provide about $29.2 million in present-value savings, McCranie said. No additional debt sales are anticipated for the rest of this year, he said.

Three Parts

Georgia’s capital is selling the debt in three parts. The largest, at $376 million, is paid off first by passenger facility charges and then a subordinate lien on general revenue. It is graded A1, fifth-highest, by Moody’s Investors Service. Another portion is backed by a senior lien on revenue. Moody’s on March 10 raised the grade of those bonds to Aa3, fourth-highest.

Atlanta airport revenue bonds maturing in January 2042 and rated Aa3 by Moody’s traded March 21 at an average yield of 4.85 percent, or about 2.8 percentage points above benchmark munis, data compiled by Bloomberg show.

Airport securities are on pace to beat the broader $3.7 trillion market for the fourth consecutive year, according to Bank of America Merrill Lynch indexes. The obligations have earned about 3.8 percent this year, compared with 3.4 percent for the entire market.

Atlanta joins issuers selling $4.9 billion in bonds this week, up from about $4 billion last week.

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