January/February 2024 - 13
INFRASTRUCTURE FUNDING
Renderings of the new $445 million terminal
at Des Moines International Airport.
RENDERINGS FROM DES MOINES AIRPORT AUTHORITY
Keep a Conservative
Eye on Spending
Adapting to rate fluctuations and
economic outlook insights on rate
fluctuations are pivotal. Lehman said
the expected decrease in long-term
treasury rates heralds a period of new
investment opportunities and refinancing
for airports.
" We anticipate the cost of capital to
remain relatively high through 2024,
suggesting a gradual approach to rate
cuts, " he said.
The financial resilience of the airport
sector was demonstrated during the
COVID-19 pandemic. Lehman notes,
" The sector's robust response, with few
downgrades in credit ratings, indicates a
stable future. We expect more predictability
in the coming years. "
Lehman's advice for airports is clear:
Adopt conservative financial strategies
with traditional borrowing structures.
He suggests balancing short-term and
long-term debt, using short-term debt
primarily during construction phases for
flexibility.
" Airports should prepare for consistent
growth, ensuring the infrastructure
matches the demand, " he said.
Heffintrayer echoed these sentiments
pointing out, " Larger airports had already
planned for higher interest rates, creating
a buffer that aids in funding new projects. "
Thomson acknowledges the potential
benefits of refinancing existing debt in a
low-interest-rate environment, but any
decision to do so would be carefully considered
within the broader context of the
authority's long-term financial strategy
and project priorities.
" Lower rates will cause us to continue
to look at the economics of such an
action and could cause us to try to capitalize
in that area, " he said.
Mulcahy said the construction timeline
will remain the same for DSM as it
approaches the project, but they could
consider adjusting the borrowing schedule
for the project as it proceeds. The
authority will issue debt in phases from
2024-2026, with a keen eye on the prevailing
interest rate environment. Voters
in Polk County recently approved a referendum
authorizing the Polk County
supervisors to issue up to $350 million
of debt and loan the proceeds to the
authority, giving DSM access to lower
interest rates thanks to the county's AAA
bond rating.
The authority may also do some
short-term borrowing directly through
a bank to try to mitigate the impact of
high interest rates. However, the continued
economic outlook for the nation and
interest rates as a whole will be continuous
factors in approaching the future.
" If there's an economic slowdown, we
hope it won't be for very long and it will
allow us to continue to progress with the
rest of the project, " he said.
JANUARY/FEBRUARY 2024 \ AVIATIONPROS.COM / 13
http://www.AVIATIONPROS.COM
January/February 2024
Table of Contents for the Digital Edition of January/February 2024
Inside the Fence
Toronto Pearson Airport Operations Transforms with Advanced Autonomous Works Vehicle
Airports Invest Big in 2024
Lower Interest Rates and Their Impact on Airport Improvement Projects in 2024
2024 Projects of the Year
Revolutionizing Airport Sustainability
How Distributed Drives Can Drive E ciency
Southwest Awards Leonardo Its First U.S. Airport Baggage Handling Contract
What It Takes to Build a Small City: A Whole New Salt Lake City
Best Practices for Local Government Leaders to Spearhead Airport Sustainability
Airport Guru
AviationPros Podcast
January/February 2024 - 1
January/February 2024 - 2
January/February 2024 - 3
January/February 2024 - 4
January/February 2024 - Inside the Fence
January/February 2024 - Toronto Pearson Airport Operations Transforms with Advanced Autonomous Works Vehicle
January/February 2024 - 7
January/February 2024 - 8
January/February 2024 - 9
January/February 2024 - 10
January/February 2024 - Airports Invest Big in 2024
January/February 2024 - Lower Interest Rates and Their Impact on Airport Improvement Projects in 2024
January/February 2024 - 13
January/February 2024 - 2024 Projects of the Year
January/February 2024 - 15
January/February 2024 - 16
January/February 2024 - 17
January/February 2024 - 18
January/February 2024 - 19
January/February 2024 - 20
January/February 2024 - 21
January/February 2024 - 22
January/February 2024 - 23
January/February 2024 - 24
January/February 2024 - 25
January/February 2024 - 26
January/February 2024 - 27
January/February 2024 - Revolutionizing Airport Sustainability
January/February 2024 - 29
January/February 2024 - 30
January/February 2024 - 31
January/February 2024 - How Distributed Drives Can Drive E ciency
January/February 2024 - Southwest Awards Leonardo Its First U.S. Airport Baggage Handling Contract
January/February 2024 - What It Takes to Build a Small City: A Whole New Salt Lake City
January/February 2024 - 35
January/February 2024 - 36
January/February 2024 - 37
January/February 2024 - Best Practices for Local Government Leaders to Spearhead Airport Sustainability
January/February 2024 - 39
January/February 2024 - Airport Guru
January/February 2024 - 41
January/February 2024 - AviationPros Podcast
January/February 2024 - 43
January/February 2024 - 44
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