PORT OF SEATTLE 

 

MEMORANDUM

 

 

COMMISSION AGENDA 

 

Item No. 

6b 

 

Date of Meeting 

June 9, 2009 

DATE:

 

June 4, 2009 

 
TO:

 

Tay Yoshitani, Chief Executive Officer 

 
FROM:

 

Elizabeth Morrison, Sr. Manager, Corporate Finance 

 
SUBJECT:

 

Second Reading and Final Passage of Resolution No. 3620 authorizing the 
issuance and sale of Subordinate Lien Revenue Bond Anticipation Note, 2009 in 
the principal amount of not to exceed $100,000,000. 

 

BACKGROUND

On May 13, 2008, the Commission authorized funding for the construction of the Consolidated 
Rental Car Facility (CRCF). Source of funding at the time of authorization was expected to be 
customer facility charges (CFCs) and stand-alone CFC-backed bonds to be issued in 2008.  CFC 
cash was expected to fund a portion of the project and construction of the facility began in June 
2008.   
 
On July 1, 2008, the Commission passed Resolution No. 3600, as amended, authorizing the 
issuance of CFC–backed revenue bonds to fund all of the CRCF project costs. These bonds 
would have been secured solely by CFC revenues.  Due to deteriorating bond market conditions 
resulting from the U.S. financial crisis, the Port decided not to proceed with the bond issue at that 
time. Credit markets in general and the taxable municipal market in particular worsened toward 
the end of 2008 and the Port suspended this transaction until credit markets improved, although 
the project continued to be funded with CFC collections and funds on hand. 
 
On December 15, 2008, the Commission approved the suspension of the project for up to one 
year, and staff began developing an alternative financing strategy. 
 
On May 12, 2009, staff presented a funding plan to fully fund the CRCF project with an 
estimated opening Customer Facility Charge of $6.50.  The plan includes the issuance of Port 
Revenue Bonds and the issuance of Bond Anticipation Notes in form of lines of credit with Bank 
of America and U. S. Bank. 

 

 

SUBORDINATE LIEN REVENUE BOND ANTICIPATION NOTE, 2009 

 
The line of credit would be issued on the Port’s Subordinate Lien as a Bond Anticipation Note, 
due on December 31, 2011.  The Note is a nonrevolving line of credit and can be drawn upon to 
pay costs related to the CRCF project of up to $100,000,000.  Any draws on the Note will accrue 

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