The days of refinancing old debt to get lower interest rates may be a thing of the past in the current economic environment, but the Metropolitan Washington Airports Authority got one under the wire.
The authority in May refinanced $205 million in 2012 bonds, with the lower interest rate promising savings of more than $15 million, CEO Jack Potter told the authority’s board on June 15.
Authority staff kept vigil on fluctuating interest rates in the lead-up to the sale, in an effort to find a sweet spot where rates might be lower, Potter said.
Since 2010, the authority has refinanced $4.7 billion in higher-interest-rate debt, leading to a savings of more than $600 million, Potter said.
The authority recently saw its bond rating for $4.3 billion in aviation-related debt upped from A+ to AA- from Standard & Poor’s Global Ratings.
The rating agency gave the airports authority a “stable outlook,” based on the assumption that the two airports will see a return to pre-pandemic levels of health by 2025 and that COVID-related “elevated health and safety concerns” appear to be on the wane.
The other two major bond-rating agencies – Fitch and Moody’s – also project a stable outlook for the airport’s aviation-related debt. Fitch’s current rating is AA-, Moody’s Aa3.
(Full details on the credit ratings can be found on the authority’s Website at https://www.mwaa.com.)
At the June 15 authority board meeting – held hunkered down at homes and offices rather than meeting in person as had been the case for several months – there seemed to be no feeling among authority leaders that COVID cases would cause another major downturn in air travel as occurred in 2020 and lingered into 2021.
“We are navigating to move beyond COVID and we are on a good path,” authority chairman William Sudow said.