After $2.55 billion deal, JFK Terminal One P3 is done issuing until 2026


In November 2023, when municipal bonds for the New Terminal One project at John F. Kennedy International Airport first came to market, the project’s team invited investors to look at the construction site.

The steel frame of the terminal thrust out of the dirt. Construction workers were installing utility pipes underground. The investors could hear the roars of incoming planes, and if they looked through the maze of steel beams, past the bulldozers and looming cranes, they could see the planes landing at the current, much smaller Terminal 1.

By June, the public private partnership behind the new terminal was set to price $1.5 billion. The team gave around two dozen investors another tour. 

A May view of New Terminal One construction at John F. Kennedy International Airport. The project’s progress helped convince municipal bond investors to jump into a $2.5 billion deal in June.

New Terminal One

The structure was no longer skeletal steel beams. It now had a clear inside and outside, and investors could go inside, stand on the concrete floor in warm light from the clerestory windows, and look up at the gaps in the sheet metal roof. Three escalators were already installed, snugly wrapped in plastic to protect them from the elements, awaiting the second floor where they would one day deposit travelers. 

That deal was upsized by $1.05 billion.

“Our vision is to basically be one of the top five terminals in the world,” said Manoj Patel, the New Terminal One CFO. “But, you know, it’s great to say it. It’s another thing to be able to see it. So I think when investors were able to see it, you know, it really drove that home that this is real. This is coming.”

With its construction on schedule and its funding ahead of schedule, the P3 consortium of Ferrovial, JLC Infrastructure, Ullico and Carlyle is on track toward 2026: the date of its next issuance and grand opening. 

The $2.55 million of green special facilities revenue bonds, sold through conduit issuer New York Transportation Development Corp., closed June 27 with serials from 2039, 2042, 2049, 2054, and 2060. The lead underwriter was Bank of America, Loop Capital was a co-bookrunner, and Barclays was co-senior manager. Eight other banks assisted with the transaction. 

The deal team saw spreads and rates improving in the weeks leading up to the issuance and decided to upsize from $1.5 to $2 billion, Patel said.

“After we marketed and saw about 3.2 times oversubscription, we decided to tighten as well and upsize to $2.55 billion,” Patel said. 

A total of 140 investment houses “came to play,” Patel said, including BlackRock, Vanguard, and MacKay.

Patel credits the construction progress with the deal’s performance: it’s rare for such a large project to be on schedule and on budget, he said. Two years into the project, the terminal is 40% completed and has procured 96% of its trade packages. 

The deal also had good timing and positioning for the market’s appetites, broad name recognition, a unique position as the nation’s largest public-private partnership, and as an unusual low-investment-grade airport offering. 

$800 million of the deal was insured by Assured Guaranty Municipal, as part of the insurer’s broader strategy to work on P3s. Assured Managing Director Lonre Potash argued the insurer “helped the issuer achieve a highly successful execution” in a statement after the deal closed.

“The 2023 and 2024 insured issues together represent the largest commitment Assured Guaranty has to a single public-private partnership credit,” Potash said. “We are the only bond insurer with the experience, scale and financial strength to provide meaningful cost savings for issues of this size and complexity.”

Ferrovial, a Spanish firm with a global infrastructure P3 footprint, is managing the project and is one of the firms providing equity. Tishman Construction Corporation is designing and building Phase A of the project under a contract with a guaranteed maximum cost of $3.99 billion.

The project procured all of its steel around June of 2022, along with most of the glass and other construction materials, Patel said, avoiding some of the inflation that has beset the construction industry.

Thanks to the NTO’s lease with the Port Authority of New York and New Jersey, the steel and glass can avoid the congested streets of New York City, and instead travel to the construction site on barges through the waterways. Once there, the materials wait in sheltered parts of the massive site until the construction workers are ready to use them. 

Patel described the project as “de-risked” from a construction standpoint and now, thanks to the most recent issuance, from a funding standpoint. 

The NTO project already had all of the funding it needed from its private partners. Its strategy has been to refinance that debt with public debt whenever market conditions were most favorable.

Now that this “very opportunistic” deal has closed, Patel said, the NTO project will access the market again in the first or second quarter of fiscal year 2026. That issuance will use the same structure as the first two and will likely cover the last quarter of Phase A of the NTO, when the first 14 gates open allowing the closing of the existing Terminal 1, allowing the P3 to proceed with Phase B, which is to result in 2030 in a 2.4 million-square-foot terminal with 30 gates.

“We’re very adamant about getting done by June,” Patel said. 

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