Port of Seattle Issues Bonds for Airport Construction Projects

The Port of Seattle is the first public airport operator in the nation to issue long-term revenue bonds to fund capital improvements in the wake of the terrorist attacks of September 11. The Port sold $508 million worth of bonds on October 3 to help fund construction of the Third Runway, the Central Terminal Expansion Project (CTEP), the South Terminal Expansion Project (STEP), and several other projects.

"The decision to move forward with the bond issue demonstrates the confidence we have in the strategic value of the projects the bonds will fund," said Port of Seattle Commission Chair Clare Nordquist. "These capital investments will bolster the local economy, generate jobs, and expand air capacity at Sea-Tac."

"The fact that we were able to sell the bonds at very favorable rates is a testament to our solid financial and operational management, and to the outstanding work done by our investment banking team," Nordquist added.

Moody's Investors Service has given the Port of Seattle a credit rating of Aa2, the highest of any public port or transportation system in the nation.

The bonds will yield an average of 5.25 percent interest and have a maximum maturity of 30 years. Approximately $80 million worth of the bonds are a refinancing of existing Port debt. By refinancing the debt, the Port expects to save about $4 million.

Moving ahead with capital investments that advance the Port's strategic and competitive position is critical, especially at a time when the economy is slowing, said Port of Seattle Chief Financial Officer Dan Thomas.

"These projects have long-term implications for the local and regional economy," said Thomas. "But they also have meaning in the near-term," he said. "These investments create local jobs and business revenues, which will help mitigate the economic downturn we're experiencing."

Goldman Sachs & Co. was the lead underwriter on the bond sale. UBS PaineWebber served as co-senior underwriter. Lehman Brothers and Siebert Brandford Shank & Co. were co-managers of the issue.

"The fact that the Port of Seattle was able not only to sell long-term bonds, but to sell them at very favorable rates, represents a major victory for airports and the municipal bond market nationwide," said Paul Bloom with Goldman Sachs. "The high quality of the Port's credit makes it a natural leader in airport bond issues."