8c. Presentation - Adoption of 2021 Intermediate Lien Revenue Bonds
Item No. 8c_supp Meeting Date: May 11, 2021 Intermediate Lien Revenue Bonds May 11, 2021 1 Request Adoption of Resolution No. 3786 Sale and Issuance of Intermediate Lien Revenue Bonds 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) Private Activity, non-AMT no income tax for investors, special exception during financial crisis and limited to refunding bonds issued in 2010 Taxable investors subject to regular federal income tax 2 Fund Airport Capital Investments Funding for approximately $600 million of spending Project spending must be authorized prior to use of bond proceeds Most projects will be funded with Private Projects Include: Activity bonds and subject Completion of International Arrivals Facility and North Satellite to AMT Continuation of Baggage Optimization and Airfield Pavement Replacement 3 Refund Existing Bonds Refunding Candidates Total Principal ($) Tax Status PFC Revenue Bonds, Series 2010A 51,110,000 Governmental (Non-AMT) Intermediate Lien Revenue Bonds, Series 2010B 184,995,000 Private Activity (Non-AMT) Intermediate Lien Revenue Bonds, Series 2010C 48,400,000 Private Activity (AMT) Commercial Paper (CP) 20,805,000 multiple TOTAL 305,310,000 Bonds will be refunded for debt service savings due to lower interest rates estimated present value saving of $25 million Due to postponement of the 2020 bond issue, Commercial Paper was used to temporarily refunded bonds 4 Resolution No. 3786 Similar in all material respect to Delegation Limits: other Intermediate Lien Maximum Par Amount: $950 resolutions million Pursuant to Intermediate Lien Maximum Interest Rate: Master Resolution Tax-exempt series 4% Provides delegation to Executive Taxable series 5% Director to approve bond sale Bond sale must occur within six Provides funding for related months of adoption costs Exceeding limits requires further authorization 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 General Obligation secured by the Port's full faith and credit and paid from the tax levy Revenue bonds secured by all of the Port's net operating revenues Special revenue bonds secured by a specific revenue source: PFCs Fuel Facility lease 7 Port Revenue Bonds - Three Liens Priority of Payment from Gross Revenue Liens Primary Use 3/31/21 $M Operating Revenues First Lien Non-Airport or in adverse markets 243.5 1 Operating Expenses Intermediate Lien Airport funding; includes Airport 2,895.8 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 226.0 4 Subordinate Lien Obligations credit facilities; includes CP 5 Capital Investments 3,365.3 The Airport accounts for 86% of all Port debt and 93% of revenue bond debt 8
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