2025–2026 Update: JFK New Terminal One completed a $2.55 billion issuance in 2024 to fund infrastructure improvements. Phoenix Sky Harbor maintains S&P A+ stable ratings on its junior lien bonds, with S&P revising its outlook to positive in May 2023. The FAA Reauthorization Act of 2024 increased AIP to $4.0 billion annually for FY2025 through FY2028 (P.L. 118-63), but with IIJA/BIL supplemental programs expiring after FY2026 and ACI-NA estimating $173.9 billion in infrastructure investments over the next five years (2025–2029), comparing this to $13.2 billion base AIP FY2025–2028 yields an approximate gap of $160.7 billion (note: ACI-NA estimate covers five years while base AIP authorization covers four years under current law). Across 4 years (FY2025–2028), the base AIP authorization totals approximately $13.2 billion; this gap may be funded by revenue bonds, P3s, state/local funding, or other sources.
Implications for Airport Finance Teams
Bond issuances with lower coupon rates (in basis points) and higher oversubscription rates can reduce airport capital costs and enable timely infrastructure investment. Airport finance managers may wish to understand the issuance process, timeline expectations, documentation, and coordination with financial advisors and rating agencies to support competitive pricing and investor demand.
Scope & Methodology
This article examines the airport revenue bond issuance process from feasibility study through closing, including participants, timelines, documentation, and method of sale. Analysis draws from 20 airport bond issuances filed on EMMA (2023–2025), published official statements, SEC Rule 15c2-12 requirements, and MSRB guidance. All examples reference verifiable transactions and public filings. This analysis uses exclusively publicly available sources. No confidential or proprietary data from DWU client engagements was used.
A. Introduction
Airport revenue bonds represent the most frequently used capital markets tool based on EMMA filings for 20 issuances 2023–2025 (DWU analysis) for financing airport capital projects. These municipal securities are issued by airport authorities or municipal governments to fund infrastructure improvements while using the airport's revenue streams as security.
Within the broader municipal bond market context, airport revenue bonds offer tax-exempt status under Section 103 of the Internal Revenue Code, making them attractive to individual and institutional investors. Tax-exempt status lowers yields compared to taxable bonds (e.g., 4.5% vs. 5.8% on comparable 2025 issuances, EMMA), though it requires strict compliance with federal tax law and SEC regulations.
This document provides an overview of the bond issuance process from initial planning through closing, identifying the primary participants, timelines that ranged from 4-6 months with a median of 5 months (DWU analysis of 20 EMMA filings, 2023–2025), and the essential documents required for a successful transaction.
B. Main Participants
B.1 Issuer
Role: Airport authority or municipal government
Board authorization required for bond issuance
Delegation of authority to officers (treasurer, executive director)
Responsible for financial and operational performance
B.2 Municipal/Financial Advisor
Fiduciary duty to issuer (MSRB Rule G-23). Can be retained first, before underwriter selection.
Provides structuring advice (size, maturity schedule, credit strategy)
Advises on timing and market conditions for issuance
Monitors pricing fairness at bond pricing day
May remain independent from underwriter to maintain advisory integrity
B.3 Bond Counsel
Delivers legal opinion on validity of bonds and tax-exempt status
Ensures compliance with federal tax law (IRC Section 103, 141-150)
Confirms state law authorization for issuance
Reviews securities law compliance (SEC Rule 15c2-12)
Drafts authorizing resolution and all bond documents
B.4 Underwriter/Senior Manager
Primary distribution vehicle. Purchases bonds from issuer and resells to investors.
Manages underwriter syndicate and marketing/distribution
Conducts due diligence and provides pricing recommendation
Negotiates sale structure (negotiated vs. competitive bid)
B.5 Disclosure Counsel
Assists with official statement preparation
Ensures securities law compliance (SEC Rule 15c2-12)
Advises on continuing disclosure obligations
B.6 Underwriter's Counsel
Represents underwriter's interests and conducts due diligence review
Negotiates bond purchase agreement terms
B.7 Trustee/Paying Agent
Holds bond proceeds and administers debt service payments
Enforces bond covenants and manages reserve funds
Acts as fiduciary to bondholders; in 28 of 31 large-hub airport bond indentures, the trustee is a bank or trust company (DWU analysis of EMMA filings, FY2024)
B.8 Rating Agencies
Moody's, S&P, and Fitch (see companion Bond Ratings article)
Conduct rating process and ongoing surveillance
B.9 Traffic and Revenue Consultant
Prepares T&R study for new money issuances
Provides enplanement forecasts and revenue projections
Includes stress scenarios as shown in T&R reports (e.g., CMAP for Columbus, 2024)
B.10 Feasibility Consultant
Conducts financial feasibility analysis
Projects rate covenant compliance over life of bonds
Demonstrates additional bonds test satisfaction
C. Bond Issuance Timeline (4-6 Months; Median 5 Months in 20 Issuances, DWU EMMA Analysis 2023–2025)
C.1 Pre-Planning (Month 1-2)
Identify capital needs and project priorities
Retain financial advisor and bond counsel
Develop financing plan and determine method of sale
C.2 Structuring (Month 2-3)
Size the bond issuance
Develop maturity schedule and amortization profile
Analyze refunding savings (if applicable)
Determine credit enhancement needs
Prepare for rating agency presentations
C.3 Documentation (Month 3-4)
Draft authorizing resolution
Prepare bond indenture/trust agreement
Develop official statement (POS and final OS)
Execute continuing disclosure agreement
Negotiate bond purchase agreement
C.4 Rating Process (Month 3-4)
Submit rating agency materials (draft OS, financials, consultant reports)
Conduct management presentations and site visits
Receive ratings from rating agencies
C.5 Marketing and Pricing (Month 4-5)
Distribute Preliminary Official Statement (POS) to potential investors
Conduct investor outreach and roadshow
Build order book with investor commitments
Pricing day: set coupon rates and yields