8h. Presentation
Issuance and Sale of Intermediate Lien Revenue and Refun
Item No. 8h_supp Meeting Date: April 26, 2022 Intermediate Lien Revenue Bonds April 26, 2022 1 Request Introduction of Resolution No. 3801 Sale and Issuance of Intermediate Lien Revenue Bonds Fund Airport capital investments Refund outstanding debt for savings 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 investors subject to regular federal income tax 2 Fund Airport Capital Investments Funding for approximately $560 million of spending Project spending must be authorized prior to use of bond proceeds Most projects will be funded with Private Projects Include: Activity bonds and subject Continuation of Baggage Optimization and to AMT Airfield Pavement Replacement North Main Terminal Redevelopment 3 Refund Existing Bonds Refunding Candidates Total Principal ($) Intermediate Lien Revenue Bonds, Series 2012A 274,200,000 Intermediate Lien Revenue Bonds, Series 2012B 35,745,000 Intermediate Lien Revenue Bonds, Series 2013 (1) 99,785,000 TOTAL 409,730,000 (1) Potential candidate Bonds will be refunded for debt service savings due to lower interest rates estimated present value saving of $25million 2012 bonds $4 million 2013 bonds 4 Resolution No. 3801 Similar in all material respect to Delegation Limits: other Intermediate Lien resolutions Maximum Par Amount: $1 billion Pursuant to Intermediate Lien Maximum Interest Rate: 4.5% Master Resolution Bond sale must occur by December Provides delegation to Executive 31, 2022 Director to approve bond sale Exceeding limits requires further Provides funding for related authorization costs Bonds will be sold by Port underwriting team 5 ADDITIONAL INFORMATION 6 The Port Primarily Uses Revenue Bonds For CIP Funding Type of Debt based on Security Pledge Bonds by Security Type General Obligation secured by the as of Feb. 28, 2022 Port's full faith and credit and paid from 1% 9% the tax levy Revenue bonds secured by all of the Port's net operating revenues Special revenue bonds secured by a specific revenue source: 90% Fuel Facility lease G.O. Revenue Special Revenue 7 Port Revenue Bonds - Three Liens Priority of Payment from Gross Revenue Liens Primary Use 2/28/22 $M Operating Revenues First Lien Non-Airport or in adverse markets 211.8 1 Operating Expenses Intermediate Lien Airport funding; includes Airport 3,307.9 2 First Lien Obligations features like using PFCs and CFCs to off-set debt service 3 Intermediate Lien Obligations Subordinate Lien Variable rate debt backed by bank 168.3 4 Subordinate Lien Obligations credit facilities; includes CP 5 Capital Investments 3,688.0 The Airport accounts for 87% of all Port debt and 95% of revenue bond debt 8 Current Rate Environment Municipal Market Data (MMD) Index Current interest rates are reasonable compared to average rates over the past ten years Short-term rates in the upper end of the historical range Long-term rates are below average Current rates are 1.25 percentage points higher than the 2021 bond sale MMD index is based on AAA General Obligation Bonds; Port bonds bear higher interest rates than the index 9
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