VOL. 125 | NO. 245 | Friday, December 17, 2010
MSCAA Approves $200M Bond Refund
By Sarah Baker
The Memphis-Shelby County Airport Authority made important strides toward gaining the benefits of low interest rates Thursday when the board of commissioners approved a maximum $200 million bond refund.
The board has about $180 million worth of bonds that were issued in 1999 and 2001, when interest rates were slightly higher, said Forrest Artz, director of finance and chief financial officer for MSCAA.
Under current market conditions, that’s creating a little more than a 7 percent present value of return, or $13.4 million savings on a net present value.
“We have an opportunity to call those bonds and refund them under better rates,” Artz said. “We will now issue new debt and pay the old debt off.”
While the board was granted authorization to issue up to $200 million, it will only issue those bonds if it results in savings in interest costs.
“By the time we actually go to sell the bond in January, we could have better conditions and realize even more savings, or maybe we might realize a little less,” said Artz. “But we wouldn’t ever issue that unless we created a positive economic benefit.”
Also at Thursday’s meeting, the board approved a closed circuit TV contract with Presidio Networked Solutions Inc., which recently merged with Coleman Technologies Inc.
The total network equipment contract – including switches, firewall, maintenance and accessories – is $401,601, to be paid with 2001 capital funds and customer facility charges. The equipment will be installed in the airport’s consolidated ground transportation center, now under construction on the north side of the main terminal.
November’s activity reports showed solid cargo counts in all categories for Memphis International Airport, the busiest airport in the world for cargo 18 years running.
Memphis handled 685.8 million pounds of cargo last month, up 2.4 percent from 669.8 million in November 2009. Year to date, the airport has handled 7.85 billion pounds of cargo, up 6.5 percent from 7.4 billion for the same period in 2009.
Meanwhile, Memphis International’s passenger count was down for the month, seeing 246 average daily scheduled flights, a 5.8 decrease from 261 average daily scheduled flights in November 2009.
The airport flew 789,935 passengers last month, down 0.6 percent from November 2009’s 794,459 passenger count. Year to date shows a 2.1 dip in passenger totals.