Sky Harbour announces interest rate swap on $200m facility

Aviation infrastructure company Sky Harbour said it has successfully completed an interest rate swap with a J.P. Morgan Chase affiliate for its $200m tax-exempt warehouse facility.

“We took advantage of the recent and expected drop in interest rates and inverted yield to convert our future floating interest cost to fixed rate, thereby locking in an attractive cost of funding for the next five years,” said Francisco Gonzalez, Sky Harbour’s chief financial officer.

“The 4.73% effective swapped fixed rate compares favorably to the 5.60% floating rate prevailing at the time we entered into the J.P. Morgan Facility.”

As a result, the company has converted its floating rate to fixed rate of 4.73% locked in for five years.

Sky Harbour had entered into the warehouse facility with J.P. Morgan in September to fund the building of luxury private jet hangars.

“Sky Harbour continues to seek increasingly efficient financing to fund its accelerating growth. Site acquisition continues to perform on plan. Development is realising new efficiencies in both pace and cost. National leasing volume has commenced a quantum step-up,” said Tal Keinan, Sky Harbour’s CEO.

The swap is governed by a new ISDA agreement with no Credit Support Annex (CSA) requirement.

Moreover, the company also reiterated its guidance for 2025. The company plans to announce five new airports by year-end, expanding its portfolio to 23 airports in operation. The company also expects to achieve operating cash flow (or adjusted EBITDA) breakeven on a run rate basis by year-end.

Greenberg Traurig LLP acted as swap counsel and Mohanty Gargiulo LLC as swap advisor, respectively, to Sky Harbour Capital II.