Item 3e - Bond Sale Presentation — original pdf

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City of Austin – Department of Aviation Airport System Revenue Bonds, Series 2022 (AMT) Airport Advisory Committee / May 10 © PFM 1 Pre-Pricing Events  Finance staff spent time educating investors about the growth at AUS prior to the bond sale to ensure maximum participation: • 5 in-person investor meetings in 2022 • 1 one-on-one investor calls leading up to the bond • 53 views of the investor roadshow leading up to the sale bond sale  A strong financial track record coupled with a strong recovery from the Pandemic led to an upgrade of the Airport’s credit rating from S&P from A to A+ • The Airport is one of only 7 airports to be upgraded by S&P in 2022 (after 11 downgrades due to the Pandemic) © PFM 2 Pricing Results  Investor interest for the Airport’s bonds was high and resulted in $2.5 billion worth of orders for approximately $400 million of bonds  This interest allowed the underwriter to lower yields on the bonds up to 9 basis points, despite the tax- exempt index staying flat on the day  7 different investors placed orders for over $100 million of the Airport’s bonds © PFM 3 Aggregate Pricing Results  The overall true interest cost of the bonds was 4.30%  Prior to the sale, interest rates had been increasing due to investor expectations about inflation and future Federal Reserve actions © PFM 4 Maturity1 Year Note2 Year Note3 Year Note5 Year Note10 Year Bond30 Year BondCurrent Yield1.93%2.48%2.66%2.74%2.72%2.83%% Time Less than Current52.01%65.02%62.67%57.37%41.91%21.32%Maximum Rate6.38%6.91%6.90%6.81%6.79%6.75%Minimum Rate0.04%0.10%0.11%0.19%0.51%1.00%Average Rate1.97%2.09%2.33%2.70%3.31%3.92%52.0%65.0%62.7%57.4%41.9%21.3%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%0%20%40%60%80%100%1 Year Note2 Year Note3 Year Note5 Year Note10 Year Bond30 Year BondMaturityCurrent US Treasury Rates% of Time US Treasury Rates Have Been LowerThan Current Levels% Of Time US Treasury Rates Have Been Lower Since 199904/26/2022 US Treasury Source: Thomson-ReutersDebt Service / Spreads to MMD  The evening before the sale, results were projected at: • True Interest Cost of 4.35% • Total debt service of $840.9 million  Final sale results were: • True Interest Cost of 4.30% • Total debt service of $835.0 million  Strong investor interest was able to be leveraged into approximately $5 million of debt service savings for the Airport over the life of the bonds © PFM 5 MaturityCouponYieldMMDSpread to MMD11/15/20255.000%2.900%2.350%0.5500%11/15/20265.000%2.940%2.370%0.5700%11/15/20275.000%3.040%2.420%0.6200%11/15/20285.000%3.160%2.490%0.6700%11/15/20295.000%3.280%2.560%0.7200%11/15/20305.000%3.370%2.600%0.7700%11/15/20315.000%3.490%2.670%0.8200%11/15/20325.000%3.550%2.700%0.8500%11/15/20335.000%3.640%2.750%0.8900%11/15/20345.000%3.690%2.770%0.9200%11/15/20355.000%3.750%2.800%0.9500%11/15/20365.000%3.800%2.800%1.0000%11/15/20375.000%3.820%2.820%1.0000%11/15/20385.000%3.880%2.840%1.0400%11/15/20395.000%3.910%2.860%1.0500%11/15/20405.000%3.920%2.870%1.0500%11/15/20415.000%3.930%2.880%1.0500%11/15/20425.000%3.950%2.900%1.0500%11/15/20435.000%3.970%2.920%1.0500%11/15/20475.250%3.890%2.980%0.9100%11/15/20525.000%4.060%3.030%1.0300%11/15/20524.250%4.270%3.030%1.2400%Use of Proceeds  Purpose of the Series 2022 Bonds: • Partially fund the Airport Expansion and Development Program (AEDP) which will: • Optimize the Barbara Jordan Terminal by adding new gates and making other improvements • Building a new baggage handling system • Building a future midfield Concourse B facility, including associated airfield infrastructure • Make a deposit to the Debt Service Reserve Fund • Fund capitalized interest during the construction period • Pay costs of issuance  Series is tax-exempt but subject to AMT  Principal repayment period – 2025-2052 ● Existing Debt Service ● 2022 Bonds Debt Service © PFM 6