Bond deal funds initiatives at fast-growing Pensacola airport

Pensacola Worldwide Airport

Buoyed by rising visitors and anticipating extra, Pensacola, Florida, plans to cost $104.6 million of airport income bonds Tuesday. 

Passenger visitors on the Pensacola Worldwide Airport is already effectively above pre-pandemic ranges, and enplaned passengers are forecast to extend from 1.6 million in fiscal 2025 to 1.8 million in fiscal 2031, based on an investor presentation for the deal.

The bonds are rated A-plus by S&P International Rankings, Fitch Rankings and KBRA, all with steady outlooks. 

BoA Securities is the lead underwriter on the deal. 

PFM Monetary Advisors LLC is municipal advisor. Bryant Miller Olive is counsel.

Bond proceeds will fund a capital plan that features a new concourse with 5 new gates and an expanded safety checkpoint.

Preliminary maturities are from 2026 to 2055. 

The bonds can be payable from a primary lien on web revenues of Pensacola Worldwide Airport amenities, revenues and different funds. Of this, about 75% is predicted to come back from passenger amenities costs. The bonds have a 1.25X fee covenant and a multi-pronged extra bonds check. 

S&P anticipates the airport may have wholesome monetary metrics for debt service protection, debt to web revenues, and unrestricted days money readily available. 

One other constructive is the airport’s “executed airline use-and-lease agreements which can be anticipated to offer 20% of non-airline revenues on the finish of every fiscal yr to pay a portion of airport capital wants, limiting the airport’s have to borrow and preserving wholesome protection and liquidity.”

For credit score negatives, S&P pointed to the airport’s comparatively small measurement and the very fact tourism accounts for about 45% of the guests. S&P talked about the likelihood the airport will borrow extra for its capital enchancment plan. 

The airport has an above common publicity to hurricanes however that is mitigated by its efforts to harden towards class 5 hurricanes. 

Pensacola says that its enplanements grew at a compound annual progress fee of 5.5% from fiscal 2010 to 2024. Airport prices per enplanement in fiscal 2024 was $4.46, which is an enchancment from the $5.44 present in fiscal 2019. The airport had 1283 days money readily available as of fiscal 2024. 

Signatory airways are American Airways, Delta, Southwest, Spirit and United. 

The bonds are being bought at a time when most airports are doing effectively however some small ones could also be pressured by the federal shutdown.

The bonds are topic to the choice minimal tax.