Hartsfield-Jackson Atlanta International Airport – 2014A, 2014B & 2014C

City of Atlanta Hartsfield-Jackson
Atlanta International Airport
$846,485,000
General Revenue Refunding Bonds
Series 2014A, 2014B & 2014C

World’s busiest airport benefits from strong premarketing and aggressive pricing spreads

Siebert Brandford Shank priced this offering in March for the City of Atlanta. The proceeds were used to current and advance refund outstanding Airport PFC Hybrid and Airport General Revenue Bonds, to make a deposit to the debt service reserve funds and to pay costs of issuance.

Our firm took the lead in helping the City create a comprehensive investor presentation which was viewed by 40 investors, many of whom put in significant orders. We then fielded many  investor  follow-up  questions.

Leading up to the pricing, the market experienced a sell-off with municipal bond yields increasing in response to Federal Reserve commentary that interest rates may be increased in early 2015. Given both the size of the transaction and the multiple series, Siebert Brandford Shank recommended releasing a pre-marketing wire on Monday before pricing with initial pricing indications to gauge investor interest in advance of the formal order period planned for Tuesday.

On Tuesday morning, as a result of the strong investor interest throughout the curve, our underwriter recommended entering the pricing with spreads as much as 5 basis points tighter than initial pricing indications from Monday, despite a slightly negative tone in the market. By the end of the order period, there were $5 billion in priority orders from 155 different investors, of which 93% were generated by Siebert Brandford Shank.

The bonds were re-priced at up to 15 basis points through the preliminary pricing scale which led to the City and the Airport’s decision to include the remaining $158 million of refunding candidates available for advance refunding.

The aggressive pricing spreads were tighter than the City’s Airport transactions in 2012, 2011 and 2010, and produced an all-in TIC of 4.00% with a total refunding present value savings of $73.6 million (8.4%), including the replacement of the existing sureties within the reserve funds to allow for 100% cash funded. The aggregate present value savings of $73.6 million was far greater than the savings of $47.6 million projected before pricing.