Airport authority seeks help from bond holders

Halifax Stanfield looks to stay ahead of potential fiscal issues in 2021, 2022

Halifax International Airport Authority (HIAA) is taking precautionary steps to lessen the financial hardships of the COVID-19 pandemic, looking directly to its bond holders for help.

In a news release issued Friday, the organization responsible for Halifax Stanfield International Airport said it is seeking amendments to the trust indenture governing all obligation bonds and pledged bonds outstanding.

HIAA wants to be temporarily relieved from being obliged to meet certain debt service coverage ratios. Additionally, it wants to be relieved of having to satisfy those ratios by incurring debt or selling, leasing or disposing of assets. In order for this to happen, HIAA needs written consent from the holders of obligation bonds and pledged bonds.

The request appears to be linked to concerns that passenger volumes and the associated revenues and airport improvement fees will remain lower than anticipated in 2021 and 2022.

In the news release, HIAA said it would have trouble complying “with certain covenants under the indenture” if those revenue streams remain low over the next two years. It said the amendments would reduce the likelihood of HIAA defaulting and enable HIAA to obtain financing if needed to operate and deal with pandemic-related challenges.

The airport authority needs bond holders representing at least two-thirds of all bonds outstanding, as of Thursday, Dec. 10, and the lone holder of the pledged bonds to provide written consent to the proposed amendments by the end of the business day on Dec. 28. If that happens, the amendments can be approved.