Port of Seattle Bonds See Strong Demand Among Investors

Very favorable marks from the nation's top rating agencies led to strong investor demand for a Port of Seattle bond sale Wednesday.

The Port sold revenue bonds that will finance $250 million in construction at Seattle-Tacoma International Airport and refinance $200 million in outstanding debt.

Strong demand meant the $454 million in revenue bonds sold at favorable rates, which will directly benefit the Port, its airline customers and the flying public in the Pacific Northwest, said Port Commission President Bob Edwards.

"The enthusiasm demonstrated by investors is due to a couple of factors," Edwards said. "First, we've received excellent credit ratings by the major rating agencies. Second, it reflects the growth we've seen in our core business activities as well as strong operational and financial performance."

In credit reports issued earlier this month, Fitch, Moody's Investors Service and Standard and Poor's affirmed the Port's senior lien revenue bond ratings of "AA," "Aa2" and "AA-," respectively, which are among the highest revenue bond ratings of any port or airport in the nation. The agencies rated the new, intermediate lien bonds "A+" (Fitch), "Aa3" (Moody's) and "A-" (Standard & Poor's), citing the Port's strong track record and solid credit fundamentals.

The bond sale will fund approximately $250 million worth of new construction planned for Seattle-Tacoma International Airport, including the Third Runway, relocation of the North Expressway, terminal improvements, property acquisitions, stormwater management and airfield projects.

In addition, the Port will refinance about $200 million worth of outstanding bonds at lower rates, which will result in a savings of $13 million and help reduce costs for the airlines serving the airport, Edwards noted.

Maturity dates for the bonds range up to 30 years and the average interest cost to the Port is 4.50 percent. They are revenue bonds and will be repaid out of operating revenues, not the Port's property tax levy.

"Ultimately, keeping airline costs in check makes flying more affordable for the passengers we serve," said Port of Seattle CEO Mic Dinsmore. "That benefits the economy of the entire region."