The Metropolitan Washington Airports Authority yesterday named 14 investment banking firms to underwrite as much as $281 million in bonds to finance the agency's first construction projects at National and Dulles International airports, among the region's biggest public works projects.
The authority is expected to finance about $1 billion worth of new roadways, terminals, parking structures, runways and other improvements at the airports over the next five to seven years.
The announcement yesterday, which completed the agency's financing team, ended the first round in the feverish competition for a chunk of that lucrative business.
Last year, the authority's board awarded contracts expected to be worth $450,000 a year to the bond counsel and financial advisers needed to prepare for issuing the bonds. Investment bankers have estimated that fees and commissions from the $1 billion financing package could total $20 million.
Among the local firms named to the underwriting team are Wheat, First Securities Inc. of Richmond; Alex. Brown & Sons Inc. of Baltimore; Johnston, Lemon & Co. Inc. of Washington; Legg Mason Wood Walker of Baltimore; Scott & Stringfellow Inc. of Richmond, and Julia M. Walsh & Sons Inc. of Washington. Wheat, First will serve as co-senior manager of the bond issue, along with Merrill Lynch Capital Markets and Pryor, Govan, Counts & Co. Inc. The other firms serving as comanagers are R.W. Corby & Co.; Cranston/Prescott; Goldman, Sachs & Co.; Grigsby, Brandford & Co. Inc.; Shearson Lehman Brothers Inc.; Smith Barney, Harris Upham & Co.
The underwriting team was chosen to provide "the best blend of national, regional and minority-owned firms," said Bette B. Anderson, head of the board's finance committee, which recommended the selections to the full board.
The authority board members have joked and complained about being besieged by investment bankers since the board was formed and took control of the federally owned airports last year. Forty-three firms applied for the underwriting job and 32 were interviewed, said board chairman Linwood Holton Jr.
The board plans to use the first $281 million for: $65 million in projects at National, including a 2,000-car parking structure, road work and a 700-car taxicab holding area.
$180 million in work at Dulles, including a new international arrivals building, new baggage carousels and the acquisition of up to 900 acres of land for an additional runway.
$35 million to make a a one-time payment to the U.S. Civil Service Retirement Fund, as required by the law that transferred the airports from federal to local control.
The board has not decided the terms or timing of the bond issue.