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Chicago Midway to Get Improvements From $784 Million Bond Sale

May 26, 2014 12:00 pm

Skift Take

Midway has always seemed minor league — both in its on-time numbers and its facilities — to O’Hare. Perhaps this will improve matters a bit.

— Jason Clampet

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M. Spencer Green  / Associated Press

FILE - This March 12, 2013 file photo shows the air traffic control tower at Chicago's Midway International Airport. M. Spencer Green / Associated Press


Chicago plans to offer about $784 million of airport-revenue bonds next week for projects including work on runways at city-run Midway International.

The borrowing for Chicago’s second-busiest airport, which began operating in 1927, will price as soon as May 29, according to data compiled by Bloomberg. Moody’s Investors Service ranks the securities A3, the seventh-highest level.

Proceeds of the deal will also go toward mitigating noise for local neighborhoods and buying land.

The bonds are backed by revenue generated at the airport, according to offering documents. Midway served about 10.2 million passengers last year, making it the 24th-busiest airport in the U.S., the documents show. Southwest Airlines Co. accounted for about 91 percent of passengers last year and more than half of operating revenue.

Moody’s has a stable outlook on the bonds, noting that the airport is “largely insulated” from the financial strains of the third-most populous U.S. city.

Midway bonds are benefiting from a rally in the $3.7 trillion municipal market. A portion of the airport’s November deal maturing in January 2035 traded at 4.37 percent on May 22, down from 5.21 percent when the federally tax-exempt bonds were issued.

Municipal airport bonds have earned 7.1 percent this year, outpacing the 6.2 percent gain for the broader municipal market, Bank of America Merrill Lynch data show.

Kelley Quinn, spokeswoman for Mayor Rahm Emanuel, didn’t have an immediate comment on the sale.

–With assistance from Brian Chappatta in New York.

To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net. To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net.

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