June 10, 2022

Milbank Advises Lenders in JFK Airport’s New Terminal One

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The construction debt financing of the public-private partnership to build the $9.5 billion New Terminal One at New York's John F. Kennedy Airport closed today. Milbank LLP represented the lenders: MUFG Bank, Ltd. as administrative agent, along with Bank of America, N.A., Bank of China, Citibank, N.A., HSBC Bank USA, N.A., ING Capital LLC, Intesa SanPaolo S.p.A., KDB Asia Limited, KfW IPEX-Bank GmbH, Société Générale, Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia and The Korea Development Bank.

The construction of the first phase of New Terminal One at JFK Airport is expected to be finished in 2026, with additional phases to follow.  Once complete, the terminal will be the airport’s largest international terminal, involving the redevelopment and expansion of existing terminals one, two and (already demolished) three into the New Terminal One, a 2.4 million square foot, 23-gate, state-of-the-art terminal for international travel. The new terminal will host multiple airlines, with cutting-edge technology, design and sustainability enhancements throughout the main hall, ticketing, check-in, security and concession areas, and new gates, lounges, retail stores and food and beverage outlets.

The project is being developed by a consortium of affiliates of Carlyle, Ferrovial, JLC Infrastructure (Loop Capital and Magic Johnson Enterprises), and Ullico.

The debt funding consists of a term loan with two tranches, along with a liquidity facility, a working capital facility and a security deposit facility.

The Milbank team was led by Global Project, Energy and Infrastructure Finance partner Allan Marks with assistance from Global Project, Energy and Infrastructure special counsel Sean O’Neill and associates Séverine Losembe, Anya Andreeva, Pierre-Phillippe Turnbull and Donovan Blount, plus special Real Estate partner Jonathan Karl and Real Estate associates Lisa Brabant and Nicole King.  Derivatives partner John Williams represented certain banks in connection with interest rate hedging for the financing with assistance from Global Project, Energy and Infrastructure Finance partner Allan Marks, Alternative Investments special counsel Elizabeth Martinez and associates Devan Zorn and Chloe Wang. Global Project, Energy and Infrastructure Finance of counsel Michael Dayen represented MUFG in its roles as collateral agent and account bank.

Mr. Marks commented:

“As a frequent flier to and from New York City, I am personally thrilled to work with my superb Milbank team on this landmark new passenger terminal at JFK Airport. When we first launched the transaction a few years ago, no one would have expected that the COVID-19 pandemic would severely impact global air travel and that the terms of all the key agreements for the project would need to be significantly reshaped. The parties – both public and private – showed real grit and creativity in collaborating to make this critically important project, with lots of moving parts, a “win” for all stakeholders.  The teams on all sides of the table – the banks, the sponsors, the Port Authority, the other parties, and their respective counsel and advisers – were a pleasure to work with and showed remarkable tenacity to bring this transaction to a successful close. This financing shows the confidence that sophisticated financial institutions and investors have in the future of JFK Airport, international air travel, and long-term economic growth.”

New York State Governor Kathy Hochul made the official announcement earlier today.