Dallas/Fort Worth International Airport
Joint Revenue Refunding Bonds
Series 2012G (Non-AMT)
Tight spreads achieved for Dallas/Fort Worth Airport
In October 2012 Siebert Brandford Shank served as senior manager on $294 million of fixed rate Joint Revenue Refunding Bonds, Series 2012G, on behalf of the Dallas/Fort Worth International Airport (“DFW”). The Series 2012G Bonds were issued to current refund $304 million of Series 2002A and 2004B Bonds and replace a DSRF surety policy with cash. Approximately half of the refunded bonds were used to fund the Airtrain which had been recently reclassified as governmental purpose through a private letter ruling. The Series 2012G Bonds represent the sixth DFW financing of 2012, after issuing $1.7 billion to refinance existing debt and begin funding a $2 billion terminal renovation program.
Since DFW offered some flexibility with the structure, Siebert Brandford Shank moved all of the principal from the 2031 and 2032 maturities into the 2025 to 2028 maturities to take advantage of investor demand and reduce the interest cost for the client. We also recommended not to accelerate the financing to Wednesday due to a weak market and to build a stronger book of investors going into the pricing. As a result, on Thursday $1 billion of orders were generated from 44 institutional investors—over three times the amount of bonds offered— allowing Siebert Brandford Shank to reprice the bonds up to 5 basis points lower in yield. The spreads to MMD were the tightest of any “A” category non-AMT airport revenue bond financing since the credit crisis and 14 basis points tighter than DFW non-AMT bonds had priced five months earlier.
The Airport was able to generate $38 million of present value savings, $10 million more than anticipated a few weeks earlier, or 12.5% of refunded par. DFW is a repeat client for Siebert Brandford Shank, with the Series 2012G Bonds representing our second senior-managed financing since 2009.