8f. Presentation
2024 Intermediate Lien Bonds
Item No. 8f supp Meeting Date: June 25, 2024 Intermediate Lien Revenue & Refunding Bonds Series 2024 June 25, 2024 1 Adoption of Resolution No. 3826 • Sale and Issuance of Intermediate Lien Revenue & Refunding Bonds – Fund Airport capital investments – Refund outstanding debt for savings • Draft Plan of Finance anticipates the use of new revenue bonds to fund $3.6 billion of Airport capital investments from 2024-2028 – 2024 Revenue Bonds to provide partial funding • 2024 bonds issued in multiple series based on federal tax status: – Governmental Bonds – no income tax for investors – Private Activity Bonds – no regular tax, but subject to Alternative Minimum Tax (AMT) – Taxable Bonds (if needed) – investors subject to regular federal income tax 2 Purpose of the Bonds Refund for Savings Funding for Capital Projects ~$272 million (1) ~$535 million (1) • Refund outstanding revenue bonds • Partial funding of Airport CIP, as outlined in issued in 2013 and 2015 the Draft Plan of Finance • Current estimate of NPV savings on the • Revenue bonds are the primary funding refunding is ~$9.2 million source for Airport capital investments (1) estimate 3 Fund Airport Capital Investments Projects include: • SEA Gateway Project • C Concourse Expansion • S Concourse Evolution • Continuation of Baggage Handling System Optimization and Airfield Pavement Replacement • A Concourse Expansion • MT Low Voltage System Upgrade Some flexibility to redirect bond proceeds to other Airport capital projects, subject to meeting project eligibility requirements (federal tax) Actual spending on projects is subject to appropriate authorization 4 Resolution No. 3826 • Similar in all material respect to other • Delegation Limits: Intermediate Lien resolutions – Maximum Par Amount: $850 million – Pursuant to Intermediate Lien Master – Maximum Interest Rates: Resolution • 6.0% - Tax Exempt Bonds – Provides approval delegation to Executive • 7.0% - Taxable Bonds (if needed) Director, Deputy Executive Director or Chief Financial Officer – Bond sale must occur by June 25, 2025 – Exceeding limits requires further authorization • Bonds will be sold by Port underwriting team led by Bank of America • Provides funding for – Bond issuance costs – Capitalized interest during construction – Contribution to the debt service reserve 5 Next Steps • Meetings with credit rating agencies June 24-25th • Bond sale scheduled for August 1st • Bond closing scheduled for August 15th 6
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