The Albany County Airport Authority (the Authority) is scheduled to issue $42.2 million in Special Obligation and Revenue Bonds this week. The negotiated sale is scheduled for November 26th with Morgan Stanley as the lead manager. Each of the three series of the Bonds have their own distinguishing characteristics. Let’s dig into the details.
About the Bonds
Series 2019 constitutes $9.6 million of the total bond issuance, and unlike the 2020 Series’ are not being issued under a forward delivery agreement. Proceeds from the 2019 Series will be used to finance a portion the Upstate Airport Development & Revitalization Project and other projects in the Authority’s 2015-2019 Capital Plan. The Series 2019 Bonds are subject to redemption prior to maturity at the option of the Authority.
Series 2020A and 2020B constitute $4.3 and $30.2 million of the total bond issuance respectively. Proceeds from these series will be used to refund part of the Authority’s outstanding debt. The Series 2020A Bonds and the Series 2020B Bonds are not subject to optional redemption prior to the maturity thereof.
In the opinion of Bond Counsel, interest on the Series 2019 Bonds is exempt from federal income tax, the federal alternative minimum tax (AMT), and New York state taxes or any political subdivision thereof. Additionally, interest on the Series 2020 Bonds is exempt from federal income tax, except that no opinion is expressed with respect to interest on any Series 2020B Bond during any period when such Series 2020B Bond is held by a “substantial user” of the facilities financed or refinanced by the Series 2020B Bonds.
Series 2020 Bonds are also exempt from New York state taxes. Series 2020A is not subject to AMT, while Series 2020B is subject to AMT.
The Bonds (all three series) are secured by a pledge of the Net Revenues derived from the operation of the Airport. Worth noting in the case of Special Obligation Bonds, they do not constitute a debt of the State of New York, nor a pledge of the faith and credit of the State of New York or any political subdivision thereof.
Subject to certain exclusions, Revenues are defined as all income and revenue from all sources collected or accrued by the Authority in connection with operation of the Airport. These sources include the rates, charges, rentals, fees and any other compensation, and investment income earned by the Authority, as well as passenger facility charges contingent on their availability and eligibility.
Moody’s has granted a rating of A3 to the Bonds, and S&P has granted a rating of A.
Albany International Airport
The Albany County Airport Authority was established as a public benefit corporation 1993, responsible for the efficient planning, development, administration, operation and financial condition of the Albany International Airport. Acting in the capacity of landlord, the Authority rents space and assesses fees and charges to the airlines and businesses providing goods and services to the traveling public and to the civilian, business, governmental and military users of the Airport.
The Airport serves the City of Albany, the capital of the State of New York, and the major neighboring cities of Rensselaer, Saratoga Springs, Schenectady and Troy. According to the U.S. census, the service area of the Airport is home to approximately 1.2 million people. Albany International is host to major airlines, including Allegiant Air, American Airlines, Cape Air1, Delta Air Lines, JetBlue Airways, Southwest Airlines, and United Airlines.
The Upstate Airport Development & Revitalization Project (for which Series 2019 is financing in part) is a major capital improvement project that initially found its way into the New York State budget in 2017. Specific capital improvements to the facility include a new 1,000-unit multi-level parking garage and a refurbishing of the passenger terminal that will provide greater amenities to passengers like better internet connectivity. This project is being done in conjunction with new construction on Interstate 87 that will provide better connectivity to the Airport. These details and more on purposes, security, risks and other matters pertaining to these Bonds can be found in the preliminary official statement, provided by MuniOS. After registering, if needed, visitors can link directly to the official statement by searching for ‘Albany County Airport Authority’.
Statistical Snapshot of Albany International Airport — FY Ended June 30, 2018
Provided above is a quick snapshot of financial characteristics of the Albany International Airport, courtesy of Merritt Research Services, LLC. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness). In addition to the Merritt information related to the featured bond, more information can be found on our municipal bond calendar, city, state, and county pages.
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.
Potential investors should rely only on the official documents and figures provided in the official statement (prospectus). Although the numbers presented in this summary are primarily derived from public documents, including issuer audits, issuer reports and other public sources such as federal reporting agencies , they are not intended to replace official information presented in connection with the bond sale. Medians may differ from official sales documents due to methodology or survey base variances.