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NAD receives funds for Phase II of airport redevelopment

With Phase I of the redevelopment of Lynden Pindling International Airport due to be completed in March, the financing for Phase II is already secured and the Nassau Airport Development Co (NAD) has received funds of $165 million. 

Wednesday, December 8, 2010
Wednesday, December 8, 2010

Nassau Airport Development Co (NAD)?has received finances to kick-start Phase II of the Lynden Pindling International Airport’s redevelopment project, with a $165 million injection into its bank account last month.

The money was deposited on November 30, allowing NAD to settle debts incurred during Phase I and replenish its revolving credit facility, as it carries out the $410 million airport expansion programme.

Phase I included the construction of a new 247,000 sq ft US terminal and pier, new parking facilities, roadways and approximately 1,000,000 sq ft of new asphalt.

Phase II is projected for completion in fall 2012. It calls for the selective demolition of the current US Departures Terminal, the construction of the 226,000 sq ft International Arrivals Terminal and International Departures Pier, removal and rebuilding of existing parking facilities and approximately 200,000 sq ft of asphalt apron rehabilitation.

Meanwhile, Phase III will see the 112,000 sq ft Domestic/International Departures and Domestic Arrivals Terminal come onstream, minor landside improvements completed and approximately 30,000 sq ft of asphalt apron rehabilitated. Phase III is projected for completion in fall 2013.

“Our mandate is very clear,” says Stewart Steeves, president and chief executive officer at NAD. “We need to maintain the integrity of our financing deal with our lenders and investors, and return all proceeds from our revenue generating activities to the project in order to ensure its execution.”

Finalized in March 2009, financing for the redevelopment is composed of a $153-million seven-year senior-secured revolving credit, a $42-million senior secured bond and a $70-million subordinated participating debt facility, says Vancouver Airport Services (YVRAS), which has a 10-year contract to develop, operate and manage the airport through NAD. The government of The Bahamas, along with 16 investors and lenders, provided the necessary capital to begin Phase I of the project.

Paul Ward, NAD’s vice president of finance and chief financial officer, says: “It is very satisfying to us that we have been able to secure the level and type of financing that we have, with an investment grade rating, so that we assure the successful execution of the entire redevelopment project.”

The key objectives of NAD’s financing structure are to maintain competitive rates at the airport, to ensure that no government guarantees are needed and to maintain an investment grade credit rating.

To support the debt and its financial performance targets, NAD will continue to grow its commercial revenues and manage its competitive rate programme, according to the company.

The new issue of The Bahamas Investor, now in its fifth year, to be published January 1, 2011, focuses on the local, home-grown talent that is having an impact on the financial services industry in The Bahamas.

Nassau is gradually getting a face lift, as major downtown projects near completion. The new $11.3-million straw market is well over half-way completed, while the Elizabeth on Bay restaurant and retail plaza is all but done.

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