Dallas Fort Worth International Airport is set to enter the municipal bond market with a $750 million deal, supported by a recent rating upgrade and a positive outlook revision. S&P Global Ratings recently raised the airport’s rating to AA-minus from A-plus, highlighting factors such as strong enplanements, financial resiliency, and stable debt service coverage. This upgrade comes as a result of improved financial performance and a sustainable capital plan that is expected to last through 2025-2029. Moody’s Ratings also revised the outlook on DFW’s A1 rating to positive, signifying an increased likelihood that the capital program will be completed without excessive leverage.
DFW’s capital improvement program includes the construction of a sixth terminal and the expansion of terminals A and C, with an estimated cost of $8.6 billion through fiscal 2029. The airport currently has $7.224 billion of outstanding debt, which is projected to grow to $12.4 billion by fiscal 2029 with future debt issuances. Airlines have pre-approved $5.1 billion of the program, demonstrating confidence in DFW’s growth and development plans. Despite facing challenges due to the COVID-19 pandemic, the airport has seen a steady increase in passenger volume, surpassing pre-pandemic levels in fiscal 2023.
DFW forecasts a continuous growth in passenger numbers, with an estimated 92.7 million passengers in fiscal 2025 and an increase to 107.1 million by fiscal 2029. As the second-busiest U.S. airport after Hartsfield-Jackson Atlanta International Airport in terms of passenger traffic in 2023, DFW remains a key player in the aviation industry. The upcoming bond sale is expected to support the airport’s expansion plans and further boost its position in the market.
The tax-exempt, non-alternative minimum tax joint revenue refunding and improvement bonds are structured with serial and term maturities. The deal is set to refund approximately $450 million of outstanding extendable commercial paper and issue around $300 million of new bonds. The debt has received A-plus ratings from Fitch Ratings and AA ratings from Kroll Bond Rating Agency, with stable outlooks. Wells Fargo Securities leads the underwriting team, along with Siebert Williams Shank & Co as co-senior manager. The bond sale is scheduled to take place on Aug. 22 and will play a crucial role in supporting DFW’s future growth and development.
The financial outlook for Dallas Fort Worth International Airport looks promising, with recent upgrades and positive projections laying a strong foundation for future success. As the airport continues to expand its infrastructure and passenger services, it is set to solidify its position as a key player in the U.S. aviation industry. The upcoming bond sale will provide the necessary funding to support DFW’s capital improvement program and drive growth in the years to come.