Atlanta airport may raise $800M - Atlanta Business Chronicle:

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officials have set in motionj aprocess that, if approveds by Atlanta City Council, would allow for the sale of bondsa to investors by the end of summer, potentially savingv the billion-dollar-plus project from a near certain shutdown. The airport is also lookinvg to refinance upto $590 millionm in existing general revenue bonds at a betterr interest rate. The fate of the Maynard Holbroomk Jackson International Terminal has been caughrt in a dispute betweenb the city and over anew 30-yea airport master lease and future capital projectsd at the world’s busies t airport.
The city aborte d a move to raise $600 million in new debt afterf Delta pulled its support for the bond package last September and frozenn credit markets prevented the airport from going Lease negotiations with Deltaare continuing, but airport spokesman John Kennedy declined to discuss details of the “This is the first step in the process toward raising the bond money for completion of the internationalk terminal by 2012,” Kennedy said, declining further Airport General Manager Ben DeCostas was at a conference in and was unavailable for comment.
A request for comment from Delt a officials was not immediately Construction in recentmonths hasn’t slowed, but fresh bond financinh is critical to avoid a suspension of work on the Delta and the city have agreedf that construction will continue on the international terminal for as long as funds hold out. Deltaa officials have said the airline wants a new lease completerd to ensure its operating costsat Hartsfield-Jackson remain competitive before making substantial commitmentds in capital for future airport projects.
Though Deltwa has been stung by the globao cut backin travel, and is planning significanty cuts in international capacity, the carriedr would likely need the gates once the economy rebounds. The up-to-$800 million in new debt woulfd be repaid through passengerfacility charges, airlins landing and lease fees, and othere airport revenue. Sources familiar with the lease talks have said Deltaa wants to complete a new lease agreement before Mayodr Shirley Franklin leavesofficse Dec. 31. The current lease expiresa in September 2010. Sources familiar with the mattetrsaid Hartsfield-Jackson can re-enter the bond market with or withou t the support from the world’s largest carrier.
On June 8, Fitch Ratingz affirmed the airport’s solid A-plus bond ratingh and revised Hartsfield-Jackson’s bond rating outlook from negativreto stable. According to the 53-pag draft bond package, has determined the bonds to be marketable. is the bond registrad and paying agent ofthe bonds. An underwritet was not identified in the It is not clearif Atlanta-basef Delta (NYSE: DAL) is on-boarf with the new bond package. Though conditionx in the bond market have improved since last it stands to reasonh the city would not try this routw again if Delta would publicly opposdethe move.
In a recent Franklin said the city has never gone to market for airportr bonds without the backing of Deltq and theother airlines. She addec that she could not imagines the city seeking to issue airpor t bondswithout Delta’s support. The building was designed with Delta’s international ambitions in mind. Deltaz is expected to take halfits gates. In January, it was revealedc Delta pulled its support for the originalbond package, tellingf bond underwriter in a September letter that the airport’sw vision of future projects was too grand in scalde and didn’t include a sixth runwat that Hartsfield-Jackson carriers want. Aftefr agreeing to the $1.
63 billion prics tag of the terminal for more than a Delta requesteda $400 million cut in the project’s budget and threatened to pull some connecting fligh capacity out of Atlantqa without a new lease agreement and changes to future building Delta has alleged its costs couldx double by 2016. The airport has deniedx that claim. The two sides agreed to cost cuts totalinhgnearly $400 million. The rhetorif has quieted in recent months, with Deltz and city officials publiclgy stating optimism that a deal on a leasew agreement and the international terminal could be Repayment of the bonds is tied to the fortune of Deltaa and the otherair carriers, said Dan Kolber, an attorne y specializing in bond issues for Baker, Bearman, Caldwell, & Berkowitz P.
C. As a practical matter, the airporty must not expect Delta to block thebond package, Kolbed said. “I would say Delta’sa on board,” he said.