Intermediate Lien Revenue Bonds
April 12, 2022
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Item No. 10b_sup
Meeting Date: April 12, 2022
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
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Fund Airport Capital Investments
• Funding for approximately
$560 million of spending
• Project spending must be
authorized prior to use of
bond proceeds
• Most projects will be
funded with Private
Activity bonds and subject
to AMT
Projects Include:
– Continuation of Baggage Optimization and
Airfield Pavement Replacement
– North Main Terminal Redevelopment
3
Refund Existing Bonds
Refunding Candidates Total Principal ($)
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
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Resolution No. 3801
• Similar in all material respect to
other Intermediate Lien
resolutions
– Pursuant to Intermediate Lien
Master Resolution
– Provides delegation to Executive
Director to approve bond sale
• Provides funding for related
costs
• Bonds will be sold by Port
underwriting team
• Delegation Limits:
– Maximum Par Amount: $1 billion
– Maximum Interest Rate: 4.5%
– Bond sale must occur by December
31, 2022
– Exceeding limits requires further
authorization
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ADDITIONAL INFORMATION
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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:
• Fuel Facility lease
7
9%
90%
1%
Bonds by Security Type
as of Feb. 28, 2022
G.O. Revenue Special Revenue
Port Revenue Bonds - Three Liens
Priority of Payment from Gross
Operating Revenues
1 Operating Expenses
2 First Lien Obligations
3 Intermediate Lien Obligations
4 Subordinate Lien Obligations
5 Capital Investments
Revenue Liens Primary Use 2/28/22 $M
First Lien Non-Airport or in adverse markets 211.8
Intermediate Lien Airport funding; includes Airport
features like using PFCs and CFCs to
off-set debt service
3,307.9
Subordinate Lien Variable rate debt backed by bank
credit facilities; includes CP
168.3
3,688.0
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The Airport accounts for 87% of all Port debt and 95% of revenue bond debt
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
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