THE Government of Jamaica has increased the size of its latest infrastructure bond offering, responding to strong market demand by upsizing the Montego Bay Airport Revenue Finance Limited (MOAIR) transaction from US$385 million to US$400 million.

MOAIR is a Cayman orphan special purpose vehicle (SPV) set up as a way for the Government of Jamaica (GOJ) to monetise the concessionary fees it receives through Airports Authority of Jamaica (AAJ), in relation to the Sangster International Airport (SIA). MOAIR received an expected BB+ credit rating with a stable outlook from Fitch Ratings, and a Ba3 rating with a positive outlook from Moody’s Ratings last Wednesday. Citigroup, a US bank, is the sole book runner.

MOAIR’s senior secured bond launched on Tuesday, with the offer being upsized and receiving an initial issue yield of 6.625 per cent. The 10-year bond was subsequently priced at US$99.829 with an interest rate of 6.60 per cent compared to an IPT (initial price talk) in the 7.00 per cent area. According to IFRE.com, the offer is expected to settle on July 22 (T+5) with the issue denominated at US$200,000 with a US$1,000 price. This bond is expected to mature on June 15, 2035.

Fitch Ratings and Moody indicated in their ratings releases that the proceeds from this bond offer will be used to fund access to clean water through the financing of certain water infrastructure projects, and to support general budgetary purposes for the GOJ. The proceeds will also be allocated to fund the debt service reserve account (DRSA) equivalent to six months of interest payments, the accrual account with at least US$14.3 million, and the revenue account along with transaction fees and expenses plus the purchase price under the true sale of revenue right.

A Bloomberg notice said Jamaica’s Government would be focused on certain infrastructure projects such as increasing access to potable water, promoting small and medium enterprises (SMEs) across the country, and improving health facilities and equipment. The notice also mentioned a one-time payment to GOJ for certain general budgetary purposes.

The senior secured bond is secured by all the assets and accounts of MOAIR and rights under the Government’s top-up agreement.

GOJ raised US$480 million ($75.44 billion) in September 2024 when Kingston Airport Revenue Finance Limited’s (King Air) issued a 12-year secured bond at 6.75 per cent interest rate and 6.47 per cent yield. The bond’s initial raise amount was US$440 million. This bond was secured by the 53.22 per cent monthly concession fee paid by PAC Kingston Airport Limited (PACKAL).

Sangster International Airport (SIA) is currently operated by MBJ Airports Limited under Chief Executive Officer (CEO) Shane Munroe, while Norman Manley International Airport (NMIA) is operated by PACKAL under CEO Sitara English-Byfield. MBJ Airports operates SIA under a concession agreement that expires in March 2034 while PACKAL operates NMIA under a concession agreement that expires in October 2044. Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (Pacific Airport Group or GAP) owns 74.5 per cent of MBJ Airports while PACKAL is a wholly owned subsidiary.

MBJ Airports earned US$158.53 million ($24.54 billion) or MXN$2.9 billion in revenue for 2024 while PACKAL generated US$92.93 million ($143.85 billion) or MXN$1.7 billion in revenues. MBJ paid a US$30-million dividend during 2024, with US$7.65 million being paid to Vantage Airport Group Limited.

MBJ Airports paid US$45.8 million ($7.09 billion) or MXN$837.8 million in concession fees to AAJ during 2024. MBJ Airports also paid US$26.1 million in additional concession fees to AAJ for the period ending March 2025. The additional concession fee requires MBJ to pay 45 per cent of any revenue that exceeds the forecasted revenues between April to March.

MBJ invested US$20.7 million during 2024 into SIA, which largely covered the expansion of the immigration and security areas along with major landside development works. MBJ will invest US$118.1 million over the next six years into NMIA.

PACKAL’s monthly concession fee was amended during 2024 from 62.01 per cent to 53.22 per cent and took effect in September 2023. Thus, PACKAL’s concession fee paid during 2024 was US$36.4 million or MXN$665.6 million.

PACKAL invested US$33.6 million during 2024 into NMIA, which was largely concentrated on the Runway End Safety Area project that should be completed in 2027. PACKAL will be investing US$85.2 million between 2026 to 2030, which will cover a wastewater treatment plant, solar farm, partial replacement of some machines, and rehabilitation of all airport restrooms.

Both MBJ and PACKAL recently received approval from the Jamaica Civil Aviation Authority (JCAA) on the maximum passenger charges between 2026 to 2030. The maximum 2024 charge at SIA was US$16.47 and will be adjusted to US$17.38 in 2026, up to US$19.07 in 2030. The maximum 2024 charge at NMIA was US$29.41 and will be adjusted to US$38.18 in 2026, up to US$60.10 in 2030. Passenger charges made up 42 per cent of MBJ’s revenue and 32 per cent of PACKAL’s revenue during 2024.

According to Pacific Airport Group’s recent traffic report, Sangster International saw a 1.9 per cent reduction in terminal passengers for June, with 438,900 passengers passing through the airport compared to the 447,400 passengers in the prior year. However, NMIA saw a 5.3 per cent increase with 152,500 passengers compared to 144,500 passengers in the prior period.

For the first six months of 2025 Sangster International experienced a 5.1 per cent reduction, or handled 138,700 fewer passengers, and processed 2.60 million passengers in 2025. NMIA had an 8.6 per cent increase, or handled 69,900 more passengers, and processed 881,700 passengers.

According to a recent article in
The Gleaner, Transport Minister Daryl Vaz has indicated that the Government will be considering an extension to MBJ’s concession agreement. That agreement was extended last July by one year to March 2034.