Bond smarts and investment savvy helped the San Diego County Regional Airport Authority win a coveted award earlier this year.
The Airport Authority, the independent agency that manages the San Diego International Airport, was honored in late November with The Bond Buyer’s “2022 Deal of the Year” award in the Far West Region category.
The Bond Buyer is a print and digital publication that provides news, analysis and data, and is the only independent resource serving the complete municipal finance community. Its “Deal of the Year” awards identify and recognize what it considers the most outstanding municipal financings.
The Airport Authority’s award as best in the Far West Region was for its major bond financing totaling $1.94 billion that was completed December 2021.
The bond proceeds pay for the replacement of Terminal 1, roadway and parking improvements and a new administration building, and advance refund outstanding bonds for debt service savings.
The Airport Authority was able to upsize its deal at pricing by $600 million, enabling it to fund projects in out years.
“We actually saved $400 million in present value against our board-approved financing,” said Scott Brickner, vice president and CFO of the San Diego County Regional Airport Authority. “The interest rate was so favorable, issued at a much lower rate. And that’s real money that goes back to the rates we charge the airlines and gives us the ability to provide all these conveniences that make the passenger experience what San Diego wants and deserves.”
Brickner noted that the Airport Authority takes no tax dollars, that it runs on user fees for the airport including tenants, airlines and travelers.
New T1 Construction
In November 2021, the Airport Authority began construction on a new Terminal 1 which includes the replacement of the old terminal, improvements to the airfield, improved transportation connectivity to the airport and a new administration building.
Brickner said the debt the Airport Authority issued in 2021 “of about $1.9 billion is about half of what it needs for the total program, which is about $3.4 billion.” Additionally, the New T1 program is estimated to create between 15,000 to 20,000 construction-related jobs.
Brickner noted that the bond sale was the largest airport deal in California history.
Kimberly Becker, San Diego County Regional Airport Authority president and CEO congratulated the finance and legal teams at the Airport Authority for the award.
“It is an honor to be recognized by The Bond Buyer for our bond sale,” Becker said. “The majority of funds we secured from the bond deal will be used to pay for the New T1 program, a project costing $3.4 billion in total. The deal was of significant value as we improve our airport.”
Becker noted that the airport is funded by user fees rather than tax dollars, and that “therefore the Airport Authority always strives to create an exceptional airport experience for our community and the world in a fiscally responsible way.”
The Bond Buyer judged entries on several factors including creativity, the ability to pull a complex transaction together under challenging conditions, the ability to serve as a model for other financings, and the public purpose for which a deal’s proceeds were used.
San Diego County Regional Airport Authority
REVENUE: $503.8M (FY 2021-22, unaudited)
SOCIAL IMPACT: The airport’s New T1 program’s total project budget is $3.4 billion and is estimated to create between 15,000 to 20,000 construction-related jobs.
NOTABLE: San Diego County Regional Airport Authority was the Far West Region winner of The Bond Buyer magazine’s “Deal of the Year.”