Houston to sell more airport bonds backed by junk-rated United

United Airlines planes at Houston's George Bush Intercontinental Airport
United Airlines planes at Houston’s George Bush Intercontinental Airport. The city council approved the sale of up to $850 million of special facilities revenue bonds backed by the junk-rated airline for a Terminal B expansion project.

Houston Airport System

Houston is teeing up a third airport system special facilities revenue bond sale this year for junk-rated United Airlines, with an up to $850 million deal approved Wednesday by the city council. 

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The bonds, scheduled to price in early November, come after the city’s two other high-yield debt offerings for United facilities faced tough market conditions.

The latest issuance will complete $2 billion in special facilities bond financing backed by the airline for George Bush Intercontinental Airport’s Terminal B expansion project. Houston sold an initial $1.1 billion of bonds in 2024, marking the city’s biggest-ever issuance of that type of debt.

The anticipated true interest cost for the upcoming tax-exempt bonds backed by United’s lease payments is 5.8% to 6.2%, Houston Finance Director Melissa Dubowski told the council’s Budget and Fiscal Affairs Committee on Sept. 29.

The city finally sold two previous deals for United in May after they were pulled last November due to apparent weak investor interest and again in early March amid geopolitical volatility and rising oil prices. The bonds, which are subject to the alternative minimum tax, were rated BB-plus with a stable outlook by S&P Global Ratings, the same as United’s issuer rating.

A BofA Securities-led team priced $105.88 million of 2036 term bonds for a United ground services equipment facility with a 4.55% yield and 5.5% coupon and $151.18 million of 2035 term bonds for a catering operations facility with a 4.67% yield and 5.5% coupon, according to the official statements.

The original November financing featured larger tranches — about $180 million and $220 million — as well as a third piece, $277.4 million of revenue refunding bonds that successfully priced and attracted strong demand. 

United is the largest airline at Houston’s main airport, responsible for 73% of the total enplaned passengers in 2025 when including United’s regional carriers. 

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