Transformative Green Bond Issuance for JFK's New Terminal
Successful Green Bond Issuance for JFK's New Terminal One
The New Terminal One at John F. Kennedy International Airport has achieved a remarkable milestone by successfully closing its Green Bond issuance amounting to $1.37 billion. This achievement reflects robust investor support and confidence in the transformative project that aims to redefine New York's gateway experience.
Funding derived from the Series 2025 Bonds will be used to cover the remaining expenses associated with Phase A of the New Terminal One, which is projected to become operational in the year 2026. This issuance follows the previous historic $2.55 billion Green Bond, marking it as the largest municipal bond financing ever for an airport project.
The New Terminal One plays a crucial role in the Port Authority's extensive $19 billion endeavor to enhance JFK Airport into a state-of-the-art gateway. This initiative includes not just the construction of new terminals but also the modernization of existing ones alongside an upgraded ground transportation center and a streamlined roadway network.
"Securing this green bond issuance reinforces the confidence that our investors have in the vision of the New Terminal One and strengthens our framework for innovation and development as we work towards our opening in 2026," stated Jennifer Aument, the CEO of The New Terminal One. She expressed gratitude for the unwavering support from their investors and financial sponsors, emphasizing the collective effort in creating a terminal that aims to set global benchmarks in excellence and sustainability.
Despite facing strong competition with multiple offerings in the market during pricing, the demand for the Series 2025 bonds was exceptionally high, with orders reaching nearly $4.3 billion. This overwhelming interest allowed for repricing, leading to reduced overall borrowing costs.
"In a competitive market landscape, the firmness of investor demand has enabled us to tighten pricing and enhance our capital cost — highlighting the quality of this project along with the stringent financial strategy we've upheld from the start," remarked Manoj Patel, the CFO of The New Terminal One.
The New York Transportation Development Corporation served as the conduit issuer for the Series 2025 bonds on behalf of The New Terminal One. The bonds have been certified as Green Bonds by Kestrel Verifiers for fulfilling strict sustainability criteria, reflecting the project's aspiration for responsible infrastructure development. Assured Guaranty has also provided insurance coverage on $600 million of these bonds.
The underwriting team for this bond issuance includes key players such as BofA Securities (acting as lead bookrunner), Barclays, Loop Capital Markets, and several others, showcasing a diverse range of partners in the financial community.
An impressive 32% of the underwriting syndicate has been allocated to designated minority and women-owned business enterprises (MWBEs), demonstrating The New Terminal One's commitment to high levels of MWBE engagement within its financial transactions.
About The New Terminal One
The New Terminal One at JFK International Airport represents a visionary and ambitious project aimed at creating a top-notch international terminal. This terminal is intended to anchor JFK's transformation, establishing it as a premier global gateway to the New York metropolitan area and the broader United States. The project is designed to achieve a Top 5 Skytrax ranking for excellence in design and service.
Construction of the New Terminal One is taking place at the site of the existing Terminal 1 and the former Terminals 2 and 3, situated on JFK's south side. The construction is being carried out in phases, with the anticipated completion set for 2030. The first phase, featuring new arrival and departure halls along with the initial set of 14 gates, is expected to welcome passengers by 2026. Once fully operational in 2030, the New Terminal One will span 2.6 million square feet, making it the largest terminal at JFK and comparable in size to LaGuardia Airport's two new terminals combined.
The New Terminal One consortium consists of key partners from labor, operational, and financial backgrounds, including Ferrovial, JLC Infrastructure, Ullico, and Carlyle, among others. This project will be built using union labor, with a strong emphasis on local participation and diversity, aiming to meet participation goals of 20% for minority-owned enterprises, 10% for women-owned enterprises, and 3% for service-disabled veteran-owned businesses, thus prioritizing local business involvement.
Frequently Asked Questions
What is the significance of the green bond issuance?
The green bond issuance signifies strong investor confidence in the New Terminal One, facilitating funding for its development while promoting sustainability.
When is the expected opening of the New Terminal One?
The New Terminal One is anticipated to open partially in 2026, with full completion aimed for the year 2030.
What are the sustainability commitments associated with this project?
The project has been designated as Green Bonds, adhering to rigorous sustainability standards, reflecting a commitment to responsible infrastructure development.
Who are the key financial partners involved?
Notable financial partners include BofA Securities, Barclays, and Loop Capital Markets, among numerous other firms that support the bond issuance.
How does the project aim to support diversity and local businesses?
The terminal project is committed to high levels of minority and women-owned business enterprises participation, setting goals to ensure local business involvement and fair representation in its operations.
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