Spaceports Just Got Access to the Municipal Bond Market. Here Is What That Changes.

For three decades, spaceports operated like airports. They were financed like startups.

Space Florida closed that gap in November 2025, when its board unanimously approved the first deal using a provision that had been law for four months: up to $235 million in conduit financing — a structure where a state or local government issues the bonds and owns the underlying assets, while a private operator leases them and makes payments that service the debt. Code-named Project Jaguar, it is the first test of whether the municipal bond market will treat a spaceport the way it treats an airport. Bankers and lawyers tracking the muni market have not identified any other spaceport private activity bond deal currently in development, according to Ron Lau, Space Florida's senior vice president for capital programs.

The provision is Section 70309 of the One Big Beautiful Bill Act, signed July 4, 2025. Greenberg Traurig confirmed the signing date and Public Law number. It designates spaceports as exempt facility bond issuers under the same rules that have financed airports since the 1970s — technically narrow, structurally significant. SpaceNews described the logic in an op-ed by Craig Hrinkevich, a D.A. Davidson managing director with 30 years in public finance: spaceports are long-lived, capital-intensive assets that function like airports and seaports. They have always needed 30-year financing horizons. They have always been financed with shorter-duration, higher-cost capital more appropriate for commercial ventures.

The consequences of that mismatch have been deferred maintenance, capacity constraints, and an infrastructure gap the industry has papered over with launch fees and government contracts. Florida's Space Coast, which supported a record 94 launches from Cape Canaverral last year and is on track to exceed 100 this year, needs an estimated $1 billion or more over the next five years just to keep up: roads, fuel delivery, wastewater treatment, and the oceanfront wharf that catches what comes back from orbit. Bloomberg Tax reported that Barclays projects the new asset class could exceed $20 billion in issuance by 2034. The Joint Committee on Taxation estimates the provision will cost taxpayers more than $1 billion in foregone revenue over the next decade. Those two numbers live in the same sentence because they are the same story from different angles: this is expensive public subsidy for an industry whose two largest current operators are owned by the world's wealthiest individuals. Elon Musk's SpaceX and Jeff Bezos's Blue Origin have both built or operate facilities at federal launch sites. They did not need this subsidy to exist. They will use it anyway.

Municipal bonds do not fix that gap by themselves. But they change the math. Tax-exempt financing typically runs 50 to 100 basis points cheaper than equivalent taxable debt. Over a 30-year maturity, that spread compounds into meaningful project economics. And because there is no volume cap on spaceport private activity bonds, the ceiling is not a statutory dollar amount. It is the market's appetite for space infrastructure as an asset class. Nixon Peabody noted that unlike many other types of private activity bonds, those issued for spaceports are not subject to volume cap. Orrick confirmed the no-volume-cap feature.

Three features make this more flexible than standard airport bond law. Spaceports do not need to be available for general public use, which matters when the primary customers are SpaceX, Blue Origin, and defense contractors rather than individual passengers. Manufacturing and assembly facilities located at or near a licensed launch site are explicitly eligible, which means satellite factories and rocket integration hangars can be financed alongside the launch pad itself. And a special exception to the federal guarantee prohibition means that NASA and Space Force payments for using a spaceport do not automatically disqualify the bonds from tax-exempt status, which removes a structural obstacle other infrastructure categories have tripped over. Nixon Peabody

The provision became law without Treasury guidance. IRS staffing cuts mean the agency has not published interpretive rules on how the new authority applies to specific facility types. Johnny Hutchinson at Nixon Peabody told The Bond Buyer he expected a deal to come to market this year but acknowledged that potential issuers are still working through whether and how their projects qualify. The first offering documents will effectively write the rulebook in real time.

This is not necessarily a problem. The muni market has proceeded before without guidance when the statutory language is clear enough. But it creates asymmetry between the first movers and everyone watching. The deals that price first will set the terms everyone else works from: coupon rates, how long the bonds run, and what backstop investors require to buy them. The deals that come later will have templates. The first deals are the templates.

The second-order effect

If Project Jaguar prices successfully, the question is which spaceport moves next. Spaceport America in New Mexico, where Virgin Galactic is the anchor tenant, has already said it is evaluating the option. Mojave Air and Space Port in California confirmed it is in early-stage conversations with banks. Texas, where Blue Origin operates from a private facility and SpaceX runs Starship development at Boca Chica, has no state-level spaceport authority to issue conduit bonds, but private developers could theoretically work through local issuers. Bloomberg Tax

The more consequential second-order effect is credit enhancement for the supply chain. Under the spaceport private activity bond framework, an anchor customer like Lockheed Martin or RTX can provide long-term service agreements or capacity reservations to a bond-issuing entity developing a facility near a launch site. Those commitments reduce risk for municipal investors, lower borrowing costs, and make facilities financeable that would not be financeable on their own. The prime does not own the asset. It gets the infrastructure it needs without a capital expenditure. This is the cellular tower model applied to rocket factories.

The obvious objection

Elizabeth Pancotti, a policy advocate at Groundwork Collaborative, told Bloomberg Tax the provision was "bananas" as a subsidy for billionaires. The political economy is not complicated: SpaceX and Blue Origin receive federal contracts, occupy federal land, and are owned by men who have more wealth than most governments. The tax code change cost $1 billion to enact. It flows primarily to commercial launch operators who would have built anyway.

The counterargument is the one Hrinkevich made in the SpaceNews piece: this does not subsidize space. It corrects a misclassification. Spaceports are infrastructure. They should be financed like infrastructure. The fact that the companies using them are currently wealthy does not change the fact that launch capacity is a strategic asset with national security dimensions, and strategic assets get financed through public mechanisms. The interstate highway system subsidizes trucking companies. The air traffic control system subsidizes airlines. The logic of infrastructure finance is that the public mechanism enables private activity, and the private activity generates returns that justify the mechanism.

Whether you find that argument persuasive depends on whether you think space launch is a public utility or a private luxury service. That debate existed before this provision. It will continue after it. The provision does not resolve it. It just tilts the economics in one direction.

The here and now

Project Jaguar has not priced yet. The bonds have not been sold. The first test of whether institutional investors will treat a spaceport the way they treat an airport is still running. Everything in this story is a projection or a provision until that deal closes.

But provisions shape behavior before they are tested. Florida's Space Coast is already planning around a financing tool it did not have six months ago. Lawyers are advising clients on structures. Bankers are pricing risk. And somewhere in the muni market, a portfolio manager is deciding whether to put spaceport bonds in a municipal strategy for the first time.

The law is clear enough. The precedent is not yet set. That is the moment we are in.