Squire Patton Boggs served as co-bond counsel to the New York Transportation Development Corporation (NYTDC), a local development corporation and affiliate of Empire State Development, which is the umbrella organization for economic development for the State of New York, on a long-term tax-exempt conduit revenue bond issuance for JFK Millennium Partners, LLC (JMP) for nearly $2 billion.
The transaction is among the top three largest municipal bond financing projects at a US airport since 2021. The bonds will be used to refinance a portion of the $4.2 billion financing of the JFK Terminal 6 Project, for which Squire also served as co-bond counsel, through commercial loans and tax-exempt bonds completed in 2022. The construction of Terminal 6 is the final component of the $18 billion JFK Vision Plan which also consists of the $1.5 billion expansion of Terminal 4, led by Delta Air Lines and JFK International Air Terminal (for which the Squire team served as co-bond counsel in 2020 and 2022) and the $9.5 billion development of a new Terminal 1.
The refinancing resulted in the issuance of $1.85 billion in alternative minimum tax (AMT) green bonds and $100 million in convertible capital appreciation bonds. Initially marketed at $1.5 billion, the bonds attracted significant investor interest during pre-pricing, were upsized to $1.95 billion the day of pricing, and ultimately saw demand for nearly $11 billion of orders. The convertible capital appreciation bonds are the first of their kind at any US airport. Additionally, several maturities of the green bonds and the convertible capital appreciation bonds were insured by Assured Guaranty.
The JMP consortium (consisting of investors such as Vantage Airport Group, American Triple I, RXR, and JetBlue Airways) will develop the new, world-class, 1.2 million-square-foot Terminal 6 at the airport in two phases, with the first new gates opening in 2026 and project completion anticipated in 2028.
Squire Patton Boggs’ team was a key part of the refinancing transaction, providing insights on tax-exempt municipal finance. The team was led by public and infrastructure finance partner Alethia Nancoo, and included public and infrastructure finance partner Catie Romanchek, principal Lauren Trialonas, of counsel Laurie Schwartz, and associates Jessica Ice, Ellen Steinmetz, and Alejandra Pazzi; together with public finance partner and tax expert Taylor Klavan; and real estate partner John Thomas and senior associate Scott Thomas.
Ms. Nancoo commented, “Our team was fortunate to work with the JMP consortium once again on another extremely successful transaction that demonstrates the market’s confidence in the value of the on-going investments being made to facilitate the eventual state-of-the-art experience for passengers traveling to and from the new Terminal 6.”