Austin OKs $1.4 billion of bonds for airport expansion

Long-term financing for an expansion program at Austin-Bergstrom International Airport will commence after the city council on Thursday approved the sale of up to $1.4 billion of revenue bonds.

Series B bonds totaling $1.05 billion are subject to the alternative minimum tax, while Series A's $350 million of bonds are non-AMT, according to city documents. Proceeds will finance portions of an estimated $5 billion airport expansion and development program and refinance all or a portion of outstanding airport system revolving revenue notes.

The city is targeting bond pricing by mid-April. General airport revenue bonds are expected to finance 75% of the expansion program and four to five subsequent bond issues are anticipated through 2030, an airport spokesperson said in January.

Ahead of the bond financing, the airport announced the completion of multi-year airline use and lease agreements.

"These milestone agreements provide the necessary financial foundation for airport-generated revenue that will support ongoing operations and fund the airport's major expansion and development, including the construction of 32 new airline gates," a Jan. 7 airport statement said.

Projects supported by the agreements include a 26-gate Concourse B, along with security checkpoint, baggage, utility, airfield and other improvements.

The underwriting team for the bonds consists of senior manager Jefferies, co-senior manager JPMorgan (JPM), and co-managers HilltopSecurities, Loop Capital Markets, and Stifel Nicolaus & Co. The bond counsel is Bracewell, disclosure counsel is Orrick, Herrington & Sutcliffe, while PFM will provide pricing advisory services and Frasca & Associates is the city's municipal advisor.

The city last sold airport system revenue bonds in 2025 with a $229.5 million refunding issue that was rated A1 by Moody's Ratings, A-plus by S&P Global Ratings, and AA-minus by KBRA ? all with stable outlooks.

The airport, where Southwest Airlines (LUV) is the largest carrier, reported 21.66 million passengers in 2025, its third highest total.

The city council also approved a comprehensive efficiency assessment program in response to voters' rejection in November of a property tax rate increase. The measure directs the city auditor to conduct ongoing assessments to address cost-effective performance improvements across departments.

"It's both a back to basics and a modernization of local government, and that's really important because it arises out of a determination for us to safeguard public confidence, to assure operational efficiency with continuous improvement, and to deliver the best value for the services that we as a city provide," Mayor Kirk Watson said.