The Port of Portland, Oregon, issued $589.9 million in bonds to finance upgrades to Portland International Airport (PDX).
The port sold the bonds in two series. The Series Thirty A bonds, consisting of $518.3 million, mature between 2029 and 2054, yielding between 3.49% and 4.35%. The Series Thirty B bonds, consisting of $71.6 million, mature between 2025 and 2044, yielding between 3.48% and 4.13%. The securities received a rating of AA- from Fitch Ratings and AA- from S&P Global Ratings.
The rating reflects the airport’s “strong credit fundamentals supported by a sizable origin and destination (O&D) enplanement base and its role as a primary service provider in an expanding metropolitan area,” Fitch analysts wrote.
The port will use most of the issuance proceeds to fund PDX’s capital improvement plan. It will spend $431.2 million of the proceeds to fund a portion of a $1.5 billion plan to redevelop the airport’s terminal. The renovated terminal will be able to accommodate more passengers.
The issuance comes amid rising demand for flights at PDX. The airport enplaned 7.8 million passengers last year, an 11% increase from the year prior, according to the official statement accompanying the sale of the bonds. But that still fell far short of the 10 million passengers that the airport enplaned in 2019.
The port will also use the bond proceeds to refund previously issued securities. The Series Thirty A bonds will refund commercial paper notes, and the Series Thirty B issuance will refund bonds that the port sold in fiscal year 2015.
The bonds are limited obligations of the Port of Portland, payable by airport revenue.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $638 million. The price reflected a premium of almost $50 million. PFM Financial Advisors LLC acted as municipal advisor.