Jacksonville Aviation Authority bringing $222 million next week

Jacksonville Aviation Authority, operator of Jacksonville International Airport in Florida, will price $221.7 million in alternate minimum tax-eligible aviation revenue bonds next week.

J.P. Morgan is the lead manager and BofA Securities, Ramirez & Co. and RBC Capital Markets are co-managers.

The bonds are rated A1 by Moody's Ratings, A-plus by S&P Global Ratings and AA by KBRA, all with stable outlooks.

"A highest category A rating is appropriate given the airport's strong financial metrics, particularly liquidity and debt service coverage and no further leverage for their capital improvement plan," said
Bhanu Patil, managing partner at SunBright Advisory Partners, a strategic consulting firm that isn't involved in putting the deal together.

"Looking ahead, future rating considerations will be tempered by climate-related risks (rising sea levels, storm surges, hurricanes, etc.), given the airport's exposure within coastal Florida; as well as the upcoming renewal of its signatory airline agreements expiring in fall 2027," Patil said.

Proceeds from the bonds will be used to complete projects at the Jacksonville International Airport and partially refund a subordinate line of credit. The projects include building Concourse B, which will add 198,000 square feet to the facilities. It also involves expanding and improving a security area, expanding an apron, relocating a taxiway and modifying utilities.

The bonds are expected to have maturities from 2029 to 2055.

S&P said the authority's main airport, Jacksonville International, serves a large and expanding area. The authority has solid financial metrics, which S&P expects it will maintain. The passenger facility charges are available for debt service and no additional debt needs.

S&P also praised the authority's experienced management team.

S&P said the airport had elevated exposure to physical climate risks associated with extreme weather events. However, management is taking steps to mitigate extreme weather effects.

KBRA pointed to the airport's diversified military, tourism and business demand. KBRA said the construction project is well under way and is largely "de-risked from a construction standpoint." It noted the airport has no remaining parity debt expected for the remainder of its five-year capital improvement plan.

Moody's said the main airport benefits from its role as the region's sole large commercial airport. It mentioned the authority has a net revenue debt service coverage ratio historically above 5 times. "A well diversified airline base and a residual airline agreement structure that allows for cost recovery of the terminal expansion debt further support the rating."

For concerns, Moody's noted the region's relatively small size and loss of some international travelers to Orlando, 160 miles away. There remains some construction execution risk, it added.

"While airport issuance remains elevated in 2026, Jacksonville is likely to see strong demand due to its limited public general airport revenue bond issuance history ? its first in 20 years ? and lack of near-term borrowing plans, offering investors scarce, high-grade paper from an infrequent public issuer," Patil said. The airport issued bonds in 2021 and 2024 but these were privately placed with a bank.

The airport said it had 33 nonstop markets served in 2026 compared to 23 in 2022.

PFM is the municipal advisor and Butler Snow is the bond counsel.

As of Friday the bond sale was scheduled for Tuesday.