Bonds swap nets county $83 million
Written by Lidia Dinkova on December 30, 2014
Miami-Dade saved $83.4 million by selling more than $761 million in bonds in late December to refinance older airport bonds, according to county financial advisor First Southwest Co.
The refinancing saved 10% of the outstanding refunded bonds.
The county’s Aviation Department doesn’t use taxpayer money. Its revenues come from airline and other fees. Airport revenues service aviation bonds.
Miami-Dade refinanced the bonds on the advice of Dallas-based First Southwest, which cited “the financial volatility of the airline industry, and the global economic weakness” and the aviation department’s ability to “generate sufficient revenue to operate effectively and service its outstanding debt.”
In the refinancing, the county will save on debt service on older bonds issued to pay for Miami International Airport’s upgrade.
The Aviation Department, which runs county airports, began the capital improvements in 1993. To pay for the upgrades, the department got county commission approval to issue $6.2 billion in revenue bonds in several series. Since then, the county has issued $5.8 billion in such bonds, records show.
December’s refinancing will redeem all or part of outstanding Aviation Department revenue bonds issued in 2002, 2003 and 2004, according to county records.
Annual debt service savings will grow rapidly. In 2016, the county expects a gross savings of under $4,000. But savings will soar over time, reaching $11.3 million in 2025, dropping to $8.6 million the following year, and going back up to $11.3 million a year between 2027 and 2036.
The December bond issue matures Oct. 1, 2037. The senior underwriter is Wells Fargo Securities LLC.
The county commission OK’d the refinancing Nov. 5. Staff closed on the bond sale in December.