Dulles Airport Operator Sells Bonds for New Metro Line

Travelers arriving at Dulles International Airport in northern Virginia will have a new option to get to downtown Washington -- a direct transit line, partly financed by municipal bonds this week.

The Metropolitan Washington Airports Authority, which operates Dulles and its Eero Saarinen-designed terminal, is selling $450 million in revenue bonds May 14 that retire short-term notes issued last year for the Silver Line rail expansion, said Chief Financial Officer Andy Rountree.

The $5.7 billion project will extend the Washington Metropolitan Area Transit Authority’s 106-mile Metrorail system by 23.1 miles (37 kilometers).

“It’s a great project that will serve the nation’s capital,” Rountree said. “It’ll connect two counties in a major way and the international airport serving the region to a rail system.”

The federal government, Virginia, the state’s Loudoun and Fairfax counties, and the airport authority are financing the venture, bond documents show. The debt offered this week is backed by levies on the Dulles Toll Road, which the authority runs in addition to Dulles and Reagan National Airport. Construction is expected to be completed by the end of 2018, Rountree said.

Busy Roads

Before the sale, the authority had $1.3 billion of bonds outstanding, according to offering documents. The new securities are rated BBB+, eighth-highest investment grade, by Standard & Poor’s, which said “the socioeconomic and development trends in the corridor and metropolitan area provide the underlying demand for traffic in the corridor.” Between 2000 and 2010, Loudoun County’s population grew 84 percent, bond documents show.

Securities issued by toll roads and turnpikes are earning 6.9 percent this year, outpacing the 5.7 percent return of the $3.7 trillion market, Bank of America Merrill Lynch indexes show.

The Washington authority joins issuers offering $3.5 billion in bonds this week, down from $4.7 billion last week.

(Corrects spelling of Loudoun County starting in fifth paragraph.)
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