PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      4b 
ACTION ITEM 
Date of Meeting    November 10, 2015 
DATE:    October 16, 2015 
TO:      Ted Fick, Chief Executive Officer 
FROM:   Elizabeth Morrison, Director, Corporate Finance 
SUBJECT:  Enter into a Reimbursement Agreement with Sumitomo Mitsui Banking
Corporation to replace the expiring agreement with Bayerische Landesbank. 
Estimated Cost: $750,000 per year, total $3,750,000 over five years. 
ACTION REQUESTED 
Request Commission authorization for the Designated Port Representative (Either the Chief
Executive Officer or the Chief Financial Officer)  to execute a reimbursement agreement
(Agreement) with Sumitomo Mitsui Banking Corporation and to take any other actions or enter
into any related documents necessary for this agreement. 
SYNOPSIS 
The Port of Seattle has a commercial paper program in the authorized amount of $250,000,000
as part of its debt management program.  Commercial paper is short-term debt issued in
maturities up to 270 days. Upon maturity the issuer can either pay down the commercial paper
or roll it over with a new issuance. The program is currently supported by two credit facilities in
the form of direct pay letters of credit provided by Bank of America and by Bayerische
Landesbank (BLB). The credit facility with BLB expires on November 30, 2015, and cannot be
extended or renewed. The Port conducted a competitive selection process for a new provider and
selected Sumitomo Mitsui Banking Corporation (Bank) to replace the BLB credit facility. The
Port may terminate without penalty after the first year. The fees are standard non-operating
costs, allocated to the operating divisions; a portion is allocated to aeronautical rates and charges. 
BACKGROUND 
In 1997 the Port initiated a commercial paper program to provide a low cost, flexible funding
option, similar to a bank line of credit. In 2001, the program was expanded to a maximum
authorization of $250,000,000 to accommodate the Airport's capital program; currently, the Port
has $41,655,000 of Commercial Paper outstanding. 
The Port typically uses commercial paper in two ways; first, as bridge funding in anticipation of
issuing long-term debt or receipt of grants or other repayment. For example, the Port used 
commercial paper to fund a portion of the third runway and paid down the commercial paper
with grant payments received over several years post completion. The second use of commercial

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
October 16, 2015 
Page 2 of 3 
paper is as a source of liquidity in support of the Port's risk management program. For example,
the Port is able to forego earthquake insurance which is expensive and limited because the Port's
commercial paper program provides relatively inexpensive and quick access to funds for 
earthquake damage repairs.
Similar to the Port's Variable Rate Demand Bonds, commercial paper is backed by a credit
facility, typically in the form of a letter of credit provided by a bank. The letter of credit 
provides investors with both the credit and liquidity support they require to hold short-term debt.
Investors are essentially relying on the bank's ability to repay them when the commercial paper
they hold matures. In order to obtain a letter of credit, the Port enters into a reimbursement
agreement with the bank that requires the Port to repay the bank for any draws under the letter of
credit; repayment is provided by rolling-over the commercial paper with investors or redeeming
commercial paper.  In the event that the Port fails to repay the bank, the reimbursement
agreement converts the amount owed into a term loan from the bank. During an initial liquidity 
period, the Port makes interest payments to the bank. At the end of the liquidity period the Port
begins to make principal payments in equal amounts during the term loan period. The only time
that the Port has had to utilize the letter of credit for liquidity was during the financial crisis of
2008 and early 2009 when the Port was unable to roll-over or remarket its variable rate debt due
to concerns about the letter of credit providers (not concerns about the Port). The Port was able
to remarket the debt within the liquidity period and no term loan payments were required. 
In addition to liquidity periods and term loan conditions, the Port carefully reviews the terms and
conditions of the Agreement.  Reimbursement agreements include representations and
warranties, covenants and default provisions. Many of these are standard and were developed
based on loans to the private sector. However, some otherwise standard requirements can be
inconsistent with the Port's municipal status, debt structure or debt management, or they can
create inadvertent events of default. The Port has been negotiating with the Bank to tailor certain
conditions to meet the Port's needs. 
The Port may terminate the Agreement upon 30 days' notice. After the first year, there is no
termination penalty. If the Port terminates the Agreement during the first year, the Port must pay
the Bank the remainder of the fees for that year, thereafter, there is no penalty for early
termination. The Port may terminate without penalty during the first year if the Bank's ratings
decline below a proscribed level. 
Resolution No. 3456, adopted June 26, 2001, and authorizing the commercial paper program
requires Commission approval of any agreement authorizing a credit facility. This differs from
the resolutions governing the Port's variable rate demand bonds that delegate this authority to the
Designated Port Representative. 
In anticipation of the expiry of the BLB credit facility, the Port conducted a competitive selection
process. Seven proposals were received and Sumitomo Mitsui was selected; staff has been
working with the Bank to negotiate the specific terms of the Agreement. Key provisions include:

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
October 16, 2015 
Page 3 of 3 
Amount       $125,000,000     Supports $125,000,000 of the commercial paper
program plus interest (the other half is supported by a
letter of credit provided by Bank of America). 
Term of the      Five years        The market standard is one to three; five provides
Agreement                  additional stability to the commercial paper program. 
Fee            0.48 percent      This is at the low end of market rates for a five year
facility. In addition, there are other minor
administrative and legal fees. A reduction in the
Port's credit ratings will increase the fee. 
Term Loan      Five years       The market standard is three years. The extra time
reduces the Port's annual payments and allows more
time to put an alternative financing in place. 
Liquidity Period   180 days         The market standard is 90 days. The Port prefers extra
time to put an alternative financing in place prior to
the first term loan payment. 
Early Termination One year        Market standard is typically two or three years for a
Penalty                       five year facility. The Port effectively guarantees
payment of the first year's fees if it terminates within
the first year. There is no penalty for early termination
after the first year. 
Terms and      Standard except   Most are standard requirements for reimbursement
Conditions       where Port       agreements except that the Port has modified or
required         eliminated several that are either inconsistent with the
modifications      Port's debt structure and management or have the
potential to create an unintended event of default. 
Staff recommends that the Port replace the BLB credit facility with a credit facility provided by
the Bank as described above. 
ATTACHMENTS TO THIS REQUEST 
Draft Reimbursement Agreement 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
June 26, 2001  Adoption of Resolution No. 3456 Authorizing a Commercial Paper
Program