On the heels of Monday’s ceremonial groundbreaking for the new terminal at Kansas City International Airport, comes the announcement that $98.4 million in bonds have been issued to get financing for the $1.5 billion project off the ground.
The Kansas City Industrial Development Authority on March 22 successfully priced the special obligation bonds for the airport terminal project through a private issuance. Morgan Stanley Bank, NA, purchased the bonds at a true interest cost of 4.052 percent.
The proceeds will be used to fund the initial costs of the terminal project, including pre-development costs such as architectural, legal, site-prep, community benefits and financing fees incurred under the original Memorandum of Understanding and Reimbursement Agreement with the terminal’s developer: Edgemoor Infrastructure and Real Estate LLC.
The bonds are secured by net airport revenues paid to the trustee by the City, subject to City Council appropriation.
“The Kansas City Aviation Department is excited about continuing our progress on delivering a world class airport terminal to our traveling public,” City Director of Aviation Pat Klein said.
The next series of bonds, which may hit the $900 million mark, will be issued once the airport use and lease agreement is executed. That pact is expected to be completed by May 30. It is anticipated that the final issuance of bonds will happen in 2021. Issuing these bonds in phases allows the City to save on interest costs and will accurately reflect the final borrowing necessary to complete the project.
Hilltop Securities, Inc., and Moody Reid Financial Advisors served the City on the transaction as co-financial advisors. Kutak Rock, LLP, The Hardwick Law Firm, LLC, and Martha E. Schach, Attorney at Law, LLC served as co-bond counsel. BOKF, NA serves as trustee on the issue.
Media inquiries and requests for information can be addressed to Doug Buehler, City Treasurer, Finance Department at 816-513-1024.