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 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.