The multimillion-dollar business behind Luis Muñoz Marín Airport

On January 30, 2013, the Centro de Periodismo Investigativo documented the deal behind Aerostar Airport Holdings, LLC’s 40-year contract to run Luis Muñoz Marín International Airport (LMM).

On January 9, 2013, Moody’s assigned Aerostar a provisional (P)Baa3 rating with stable outlook for $350 million in senior secured bonds, meant to cover part of the contract acquisition and secured by a first-priority interest in the airport.

Economist José Antonio Herrero called the lease “very bad” for Puerto Rico: the alleged $552 million rent translates, he said, to about $4.75 million a year (present value ~$190 million), while the airport generates ~$65 million a year. He noted that for the contract to take effect the government must pay long-term debt (~$700 million) via an AFI issue and GDB letters of credit. Over 40 years, he estimated, the lessee would pay ~$500 million and gain ~$200 million against an airport present value of ~$1,500 million — a net loss to the treasury of ~$1,200 million, by his math.

CPI also flagged ceded revenues: a $4.50 PFC per passenger (~$36 million a year at 8 million passengers) and AIP/FAA funds. January 12 was the FAA endorsement deadline; García Padilla won 45 more days to exit without penalty, according to former FAA official Julio Garriga.

Moody’s rating / PPP contract ≠ consummated disbursement. Present-value critique is not a theft verdict.

Source: Centro de Periodismo Investigativo. https://periodismoinvestigativo.com/2013/01/el-negocio-millonario-tras-el-aeropuerto-luis-munoz-marin/