Item 7a Memo


COMMISSION AGENDA             Item No.      7a 
Date of Meeting     May 12, 2009 
DATE:    May 6, 2009 
TO:      Tay Yoshitani, Chief Executive Officer 
FROM:    Elizabeth Morrison, Sr. Manager, Corporate Finance 
SUBJECT:  Briefing on Consolidated Rental Car Facility (CRCF) financing 

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]
On July 1, 2008, the Commission passed Resolution No. 3600, as amended, authorizing the
issuance of CFCbacked 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 October 14, 2008, the Commission authorized the use of general Airport funds in the amount
not to exceed $20 million as interim funding to allow continuation of project construction on
schedule toward the original May 2011 program target. This budget was established using Turner
Construction Company's estimated cash flow projection for the entire project as provided to the
Port in September. These funds, in combination with available CFC funds, were expected to be
sufficient to fund construction through the end of March 2009, by which time longer-term
financing would be secured. 
In early November 2008, Turner provided a revised cash flow estimate that showed faster
spending than previously anticipated due to favorable weather conditions and more refined
estimates from subcontractors, with expenditures projected to exceed available funds around the
end of 2008. As a result, 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.

Tay Yoshitani, Chief Executive Officer 
May 6, 2009 
Page 2 of 3 

On January 27 and March 5, 2009, staff provided updates on the financial markets and on
possible funding options available for the project. Since that time, staff has worked on several
elements of the financing. 
Airport staff has developed a detailed transaction day forecast methodology based on a 
revised enplanement forecast that reflects a larger drop in traffic, and slower recovery,
than originally projected.
Staff has met with the rental industry to discuss the forecast and a financing plan that
provides for a projected opening day CFC of $6.50.
The Port has re-engaged the feasibility consultant and begun a draft report.
Staff has met with the Port's finance team to evaluate the market and the Port's access to
credit for this financing. 
Staff has worked to secure two $100 million bank lines of credit, for a total of $200
million, to ensure that the project can be funded to completion and provide flexibility in
structuring the fixed rate bonds. 
Staff has begun drafting Resolutions for Commission authorization of the two bank lines
of credit (including the Bank of America (BOA) Note) and the issuance of taxable bonds.

The financing plan for the CRCF consists of several components designed to ensure that the
project can be fully funded through completion, in an amount totaling approximately $400
million. Since the total amount and type of fixed rate bonds available for purchase by investors
won't be known with certainty until the Port actually enters the bond market, the funding plan
includes a backup in the form of $200 million in bank lines of credit that can be drawn when, and
if needed, to provide flexibility in structuring the fixed rate debt. The permanent funding plan,
based on an assessment of current market conditions and expected investor demand, includes the
Funding Source 
$20 million tax-exempt debt 
$100 million variable rate debt 
$100 million 10-yr bonds 
$150 million 30-yr bonds 
$30 million Capital
Appreciation Bonds (CABs) 
$400 million Total 
This plan provides for a projected opening day CFC of $6.50. The plan will continue to be
refined based on market conditions to provide for greater certainty (e.g. longer-term bonds)
and/or a lower CFC (e.g. more CABs/cash or lower market rates).

Tay Yoshitani, Chief Executive Officer 
May 6, 2009 
Page 3 of 3 

To accomplish this plan, staff proposes the following schedule: 
May  Commission briefing, draft feasibility report, meet with rating agencies, 
June  Commission briefing, First and Second Reading of BOA and US Bank Note and Revenue
Bond Resolutions, close Notes, sell bonds and initiate project restart. 
Additional background and details will be provided on May 12, 2009.

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