WSJ & AP: Delta stopped airport bond issuance
January 21, 2009 at 11:01 am by Andisheh Nouraee in NewsThe hardball negotiations between Delta and Atlanta over airport fees appear to be getting, er, hardballier.
It’s a word. I swear.
In November, the Atlanta Business Chronicle reported a $600 million bond issuance for new construction at Hartsfield-Jackson had stalled because of the nation’s frozen financial markets. Without new bonds, construction at the airport’s new international terminal will slow or even stop.
On Saturday, the Wall Street Journal quoted an anonymous source contradicting the city’s explanation:
People familiar with the planned transaction, however, say the debt wasn’t issued because Delta opposed the project’s budget, believing it would raise its airport costs long-term. Delta “stopped them from moving ahead,” said a person familiar with the transaction. Because of the airport’s prominent role in the country’s aviation infrastructure and good credit history, the person added, “the bonds would have been very sellable, even in this market.”
Mayor Franklin, who was interviewed for the WSJ story, denied the anonymous source’s claim and stuck by the original explanation. The bonds were not issued, she said, because of the condition of the financial markets.
Two days later, the Associated Press ran this:
However, according to documents obtained Monday by AP, John Boatright, Delta’s vice president of corporate real estate, sent a Sept. 10 letter to prospective underwriters of the airport’s bond financing stating that Delta opposed the airport’s capital improvement program, which includes the terminal project.
Delta’s stance could factor into the underwriters’ decision because the airline is the majority tenant of Hartsfield-Jackson.
Perhaps it’s a total coincidence that the AP and the Wall Street Journal, over the same holiday weekend, magically gained access to four-month-old Delta memos.
Or maybe someone at Delta decided now is a good time to subtly remind the city’s decision-makers that Atlanta needs Delta a lot more than Delta needs Atlanta.
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