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Project Profile: Luis Muñoz Marín International Airport Privatization

Luis Munoz Marin International Airport Privatization

photo credit: Puerto Rico Ports Authority


San Juan, Puerto Rico

Project Sponsor / Borrower

Puerto Rico Public-Private Partnership Authority

Puerto Rico Ports Authority

Aerostar Airport Holdings

Program Areas

Project Finance




The Luis Muñoz Marín International Airport privatization in San Juan, Puerto Rico took place under the Federal Aviation Administration Airport Privatization Pilot Program (APPP), originally authorized by TEA-21 in 1997 and expanded under MAP-21 in 2012. The Puerto Rican government used the program to enter into a 40-year long-term lease concession with Aerostar Airport Holdings in February 2013 in a deal valued at $2.6 billion over the life of the lease.

When the Puerto Rico Ports Authority (PRPA) applied to the APPP in 2009, the airport had a significant backlog of capital needs, maintenance, and areas of underperforming customer service that diminished its appeal as a hub for air travel in the Caribbean. A report prepared by the Puerto Rico Public-Private Partnership Authority in 2012 noted deficiencies in pavement, lighting, and signage causing safety concerns; little growth in passenger traffic over 20 years; and missed opportunities for growth capitalizing on tourist segments such as cruise ship access. Analysis showed that lease payments and the value of investment in the airport by a private partner, along with attendant economic benefits, would exceed the revenue the government would otherwise earn by continuing to operate the airport.

Following a competitive selection process, Aerostar Airport Holdings - at the time a 50-50 joint venture between Grupo Aeroportuario del Sureste (ASUR), a Mexican airport operator and Highstar Capital, an American infrastructure investor - was selected as the concessionaire. The Puerto Rican government received a $615 million upfront lease payment, annual lease payments over the first five years, and is receiving a share of operating revenue over the remainder of the term. The concessionaire has also been making a number of capital investments in the airport, many of which were completed in the first several years of the lease. Improvements address facility maintenance and upgrades, passenger processing and the addition of an automated baggage scanning system, terminal layout, airport appearance, amenities, and concessions, and better financial accountability and back office operations.

PRPA used a majority of the upfront lease payment to defease outstanding debt, which at the time it applied to the APPP, exceeded $800 million. The payment also covered transaction costs and supported development and operation of other regional airports PRPA oversees.

Highstar Capital was purchased by Los Angeles-based Oaktree Capital Management in 2014. In May 2017, Oaktree Capital Management sold a 40 percent stake in Aerostar Airport Holdings to Public Sector Pension Investment Board (PSP Investments), one of Canada's largest pension investment managers. In addition, ASUR acquired Oaktree Capital Management's remaining interest in Aerostar Airport Holdings, increasing its stake in the company to 60 percent.


$2.6 billion - Estimated revenue and benefits over the 40-year lease term

  • $615 million - Upfront lease payment
  • $12.5 million - Annual lease payments ($2.5 million), years 1-5
  • 5% of gross revenues, years 6-30
  • 10% of gross revenues, years 31-40
  • $1.4 billion - Capital investments
Funding Sources

Concessionaire's original financial structure

  • Private bond issue - $350 million
  • Senior bank debt - $50 million (to fund initial capital investments)
  • Revolving credit facility - $10 million
  • Equity - $327 million
Project Delivery / Contract Method Long-term Lease Concession (40 years)
Private Partner

Aerostar Airport Holdings

Original Ownership

  • Grupo Aeroportuario del Sureste (ASUR) (50%)
  • Highstar Capital (50%) (purchased by Oaktree Capital Management in 2014)

Current Ownership

  • Grupo Aeroportuario del Sureste (ASUR) (60%)
  • PSP Investments (40%)
Project Advisors / Consultants


  • Credit Suisse - Financial and Procurement Advisor
  • Pietroantoni, Mendez & Alvarez - Local Legal Advisor
  • Mayer Brown - U.S. Legal Advisor
  • LeighFisher - Technical Advisor

To the concessionaire

  • UBS Investment Bank - Financial and Strategic Advisor
  • Royal Bank of Canada - Financial Advisor
  • Cleary Gottlieb Steen & Hamilton - Legal Advisor
  • Arup - Technical Advisor


First BanCorp

Royal Bank of Canada

UBS Investment Bank

Duration / Status

Preferred bidder selected July 19, 2012

Federal Aviation Administration approval February 25, 2013

Concession conclusion 2053

Financial Status

Financial close February 27, 2013

Aerostar's operating revenue is derived in large part from airline usage. A 15-year Airport Use Agreement caps the total annual aggregate airline fees at $62 million for the first five years. After the sixth year, the total annual airline fees may be increased annually by a percentage not to exceed the rate of core inflation.

  • First successful privatization under the FAA's APPP
Related Links / Articles

Puerto Rico Ports Authority

Procurement Documents and Reports

San Juan Int'l Forges New Territory with Public-Private Partnership (Airport Improvement, July-August 2014)

FAA Airport Privatization Pilot Program


Anthony Maceira Zayas
Executive Director
Puerto Rico Ports Authority
Tel: (787) 729-8715

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