PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      6e 
ACTION ITEM 
Date of Meeting    November 5, 2013 
DATE:    October 15, 2013 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:   Elizabeth Morrison, Director, Corporate Finance 
SUBJECT:  Resolution No. 3684  issuance and sale of intermediate lien revenue refunding
bonds in the aggregate principal amount of not to exceed $150,000,000 

ACTION REQUESTED 
Request Second Reading and Final Passage of Resolution No. 3684: A Resolution of the Port
Commission of the Port of Seattle authorizing the issuance and sale of intermediate lien revenue
refunding bonds in the aggregate principal amount of not to exceed $150,000,000, for the
purpose of refunding certain outstanding revenue bonds of the Port; setting forth certain bond
terms and covenants; and delegating authority to approve final terms and conditions of the
bonds. 
SYNOPSIS 
Commission authorization is requested to issue intermediate lien revenue refunding bonds (the
"Bonds") in an amount estimated not to exceed $150,000,000 (including a reserve fund deposit
and cost of issuance) to refund up to $138,320,000 outstanding first lien revenue bonds, Series
2003B. The Bonds are being issued solely for the purpose of achieving debt service savings; there
is no new project funding associated with this transaction.
BACKGROUND 
The Port's on-going debt management program includes the monitoring of existing debt for
opportunities to refund at lower interest rates and reduce debt service. Since 2010, the Port has
been able to benefit from the low interest rate environment and refund $1.37 billion of debt for a
present value savings of $183 million. The current low interest rates offer another opportunity to
potentially refund the first lien revenue bonds, Series 2003B and to meet or exceed the Port's
debt service savings target.  Beginning in June of 2013, interest rates began rising.  The
municipal bond market, which is smaller and less liquid than the treasury or corporate markets,
became especially volatile and this refunding did not achieve its savings target. A recent rally in
the bond market has improved the savings forecast, but the viability of the transaction is sensitive
to future interest rate changes. As such, staff recommends that the Port be prepared to execute
the refunding if and when rates are favorable. Based on interest rates over past month, this
transaction would provide savings between 4% and 9% or $5.5 million to $12.4 million present
value. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 2 of 3 

The 2003B bonds were issued on the Port's first lien to fund Airport projects including terminal
communication, security and mechanical systems; airline relocations; bag screening and a
maintenance warehouse. The bonds are currently callable. In 2005, in conjunction with the new
airline agreements that took effect in 2006, the Port introduced the intermediate lien to be used
primarily for Airport debt. The intermediate lien incorporates certain legal provisions that are
typical for Airport debt; for example, the Intermediate Lien provides for the use of Passenger
Facility Charge collections to pay revenue bond debt service, and it provides for a lower debt
service coverage requirement that is consistent with both the 2006 airline agreement and the
recently approved 2013 agreement. Since its introduction in 2005, the intermediate lien has been
used for most new Airport related debt and for the refunding of existing Airport related debt. 

ADDITIONAL BACKGROUND 
The Bonds are being issued pursuant to the Intermediate Lien Master Resolution No. 3540 and
this Resolution No. 3684. The Bonds will be issued as private activity bonds exempt from
regular federal income tax, but subject to the Alternative Minimum Tax (AMT) and will be 
issued to refund existing private activity bonds that are currently callable 
Resolution No. 3684 is similar in all material respects to other Intermediate Lien Series
Resolutions and provides for a contribution to the common debt service reserve fund that
provides security for all intermediate lien bonds. 
The Resolution delegates to the Port's Chief Executive Officer the authority to approve interest
rates, maturity dates, redemption rights, interest payment dates, and principal maturities for the
Bonds (these are generally set at the time of pricing and dictated by market conditions at that
time). Commission parameters that limit the delegation are a maximum bond size, minimum
savings rate and expiration date for the delegated authority. If the Bonds cannot be sold within
these parameters, further Commission action would be required. The recommended delegation
parameters are: 
Maximum size:     $150,000,000 
Minimum debt service savings:    4.00% 
Expiration of Delegation of Authority:     six months 
Upon adoption, Resolution No. 3684 will authorize the Designated Port Representative (the
Chief Executive Officer, the Deputy Chief Executive Officer or the Chief Financial and
Administrative Officer) to approve the Bond Purchase Contract, the official statement, escrow
agreement (if any), pay the cost of issuance and take other action appropriate for the prompt
execution and delivery of the Bonds. The Bonds will be sold through negotiated sale to Merrill
Lynch, Pierce, Fenner & Smith Inc.; Backstrom McCarley Berry & Co., LLC; Barclays Capital;
Drexel Hamilton, LLC; J.P. Morgan Securities, LLC; Morgan Stanley & Co. Inc. Piper Jaffray,

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
October 15, 2013 
Page 3 of 3 
Seattle-Northwest Division (formerly Seattle-Northwest Securities Corporation, Inc.) is serving
as Financial Advisor and K&L Gates LLP is serving as bond counsel on the transaction. 
ATTACHMENTS TO THIS REQUEST 
Resolution No. 3684 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
April 2, 2013 - Draft Plan of Finance Update Briefing 
October 22, 2013 - First Reading of Resolution No. 3684