PORT OF SEATTLE 
MEMORANDUM 

COMMISSION AGENDA                 Item No.      6e 
Date of Meeting   February 14, 2012 

DATE:    February 3, 2012 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Elizabeth Morrison, Sr. Manager Corporate Finance
SUBJECT:  Resolution No. 3658 Authorizing the Issuance and Sale of Intermediate Lien
Revenue Refunding Bonds 

ACTION REQUESTED: 
Second Reading and Final Passage of Resolution No. 3658: Resolution of the Port Commission
of the Port of Seattle authorizing the issuance and sale of intermediate lien revenue refunding
bonds in one or more series for the purpose of refunding certain outstanding revenue bonds of the
Port; delegating authority for the sale of the bonds by negotiated sale, the negotiation, approval and
execution of the bond purchase contract and the preparation and dissemination of a preliminary
official statement and final official statement; authorizing the appointment of an escrow agent and
execution of an escrow agreement; providing for continuing disclosure; and providing for a
negotiated sale of the bonds to J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Barclays
Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Backstrom McCarley Berry &
Co., LLC and Drexel Hamilton, LLC. The issuance and sale of the Intermediate Lien Revenue
Refunding Bonds is in an amount not to exceed $730,000,000.
SYNOPSIS: 
Commission authorization is requested to issue Intermediate Lien Revenue Refunding Bonds in
multiple series in an amount estimated not to exceed $730 million (including a reserve fund and
cost of issuance) to refund up to $534,710,000 outstanding First Lien Revenue Bonds and up to 
$105,430,000 outstanding Subordinate Lien Revenue Bonds (See Exhibit A). The Bonds are being
issued solely for the purpose of achieving debt service savings; there is no new project funding 
associated with this transaction. The actual amounts refunded and the associated savings will be
based on market conditions at the time of the bond sale. 
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. The current low interest
rate environment offers an opportunity to potentially refund several series of outstanding bonds
and meet or exceed the Port's debt service savings target.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 3, 2012 
Page 2 of 5 

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
coordinated with the airline agreements. Since its introduction in 2005, the Intermediate Lien
has been used for most new Airport debt and for the refunding of existing Airport related debt. 
First Lien Bonds 
The Port sold bonds in four series in 2001 to fund Airport projects including the third runway,
the central terminal, concourse A and the Airport office building, and to refund bonds originally
issued in 1990 and 1992. The original 1990 and 1992 bonds funded both Airport and Seaport
projects including Airport noise mitigation, concourse improvements and improvements to
various Seaport facilities, so a portion of the 2001 bonds is allocated to the Seaport. Three series
of the 2001 bonds are currently callable and would be redeemed immediately upon issuance of
the Bonds. The fourth series of the 2001 bonds is callable on November 1, 2012, and would be
defeased through the establishment of an escrow until their call date.
The 2003A bonds funded Airport projects including the third runway, and infrastructure
improvement like electrical and storm water systems. Only a portion of the 2003A bonds meet
the Port's savings target at this time, but the entire series is included. Recent declines in interest
rates have put the entire series closer to the target and worth including in the refunding 
candidates list; further improvement in rates could make the entire series eligible for refunding.
The 2003A bonds are callable on July 1, 2013, and would be defeased through the establishment
of an escrow until their call date.
Subordinate Lien Bonds 
In 1999 the Port issued bonds to fund Airport projects including the third runway, property
acquisitions, parking garage improvements and terminal infrastructure improvements. These
were originally issued as variable rate bonds on the Subordinate Lien; in 2002, the Port
converted the 1999 bonds to fixed rate bonds. The 1999 bonds are callable September 1, 2012, 
and would be defeased through the establishment of an escrow until their call date.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 3, 2012 
Page 3 of 5 

Other Potential Refunding Opportunities 
The 2003B bonds funded Airport projects. These bonds do not meet their savings target and are
not included in the refunding candidate list. However, they are actively monitored and a
decrease in interest rates could warrant adding these bonds to the list of candidates. The
outstanding amount is $138 million and the bonds are callable on July 1, 2013.
ADDITIONAL BACKGROUND: 
The Bonds are being issued pursuant to the Intermediate Lien Master Resolution No. 3540 and
this Resolution No. 3658. The Bonds will be issued in multiple series based on their tax status:
governmental purpose bonds exempt from all federal income tax will be issued to refund existing
governmental purpose bonds; private activity bonds exempt from regular federal income tax, but
subject to the Alternative Minimum Tax (AMT), will be issued to refund existing private activity
bonds that are currently callable; and taxable bonds subject to federal income tax will be issued
to refund existing private activity bonds that are not currently callable (the tax code prohibits the
issuance of tax-exempt bonds to refund private activity bonds that are not callable within 90
days).
Resolution No. 3658 is similar in all material respects to other Intermediate Lien Series
Resolutions and provides for a contribution to the Common 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:     $730,000,000 
Minimum debt service savings:    3.75% 
Expiration of Delegation of Authority:     six months 
Upon adoption, Resolution No. 3658 will authorize the Designated Port Representative (the
Chief Executive Officer or the Chief Financial 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 J.P. Morgan Securities, LLC; Morgan Stanley & Co. Inc.; Backstrom
McCarley Berry & Co., LLC; Barclays Capital; Drexel Hamilton, LLC; and Merrill Lynch,
Pierce, Fenner & Smith Inc. Seattle Northwest Securities Corporation, Inc. is serving as
Financial Advisor and K&L Gates LLP is serving as bond counsel on the transaction.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 3, 2012 
Page 4 of 5 

OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST: 
Resolution No. 3658 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
October 11, 2011, Commission held First Reading of Resolution No. 3653 and was briefed on 
additional refunding opportunities. 
January 10, 2012, Commission was briefed on the refunding resolution. 
February 7, 2012, Commission held First Reading of Resolution No. 3658 

Exhibit A 
Candidates for 2012 Bond Refunding (1) 
Outstanding Bonds   $ Amount to be        Tax Status          Call Date 
Refunded 

First Lien 

2001A          176,105,000      Governmental, Non-AMT    Current 

2001B          187,265,000      Private Activity, AMT      Current 

2001C          12,205,000       Private Activity, AMT      Current 

2001D          30,805,000       Private Activity, AMT      11/1/2012 

2003A          128,330,000      Governmental, Non-AMT    7/1/2013 

Subordinate Lien 

1999A          65,585,000       Governmental, Non-AMT    9/1/2012

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
February 3, 2012 
Page 5 of 5 

1999B          39,845,000       Private Activity, AMT      9/1/2012 
(1) Actual refunded bonds will depend on market conditions