Miami International Airport bonds save $117 million

Miami International Airport’s strong position for both domestic and international travel as a gateway airport with a dominant position in Latin America contributed to an A+ rating that a leading financial service has just assigned to new airport bonds to be issued this month to pay off prior debt.

The report from Fitch Ratings cited $4.2 billion already approved in capital projects through 2035 to meet future capacity and operational needs of rapidly growing airport traffic and an additional $3.2 billion in construction plans already in place for the period. Fitch estimates that 66% of that work would also be financed by bonds yet to be issued.

The Miami-Dade County Commission adopted the new capital improvement program for the airport in September 2021. The extensive redevelopment plan calls for spending up to $7 billion in airport-wide modernization over the next five to 15 years.

The bond rating from Fitch includes $1.025 billion in new bonds to be repaid by future aviation revenue and affirms that rating on $4.8 billion in outstanding county aviation capital bonds.

The bonds being refunded by the new issue were all issued in 2014, and the county will reap an interest rate savings of nearly 8% at present value on the deal without extending the final maturity date, Fitch wrote.

Before the bonds were approved, county Chief Administration Officer Carladenise Edwards wrote to county commissioners that based on current market conditions, the bond interest savings of about $116.9 million would over their lifetime represent a net value savings of about $90.1 million.

Through the first five months of this year, total passengers boarding aircraft at Miami International Airport are up 8.5% from last year, Fitch notes, and “passenger revenues move in tandem with enplanements.”

The airport’s most recent traffic report, for May, shows total passengers, including boardings and arrivals, up more than 11% for the year, including an increase in international passengers of more than 14% and more than 9% increase in domestic passengers.

For this calendar year through May, international passengers were up 12% and domestic more than 10%, for totals of 10.6 million international and 13.7 million domestic travelers.

Total airport freight tonnage was also up for the five months, rising 4.6%, led by a 6.4% gain in international tonnage. The county commission has just agreed to a contract for construction and operation by a private vendor that will add capacity to handle an additional 1.5 million tons of freight annually at the airport.

The airport is operating from a position of strength. Passenger totals broke records at more than 52 million last year and are on pace to far surpass that number this year. In addition, “We’ve had… [about] four straight record-breaking years in just cargo overall,” Ralph Cutié, director of the aviation department, told Miami Today in May.