Official Statement Airport Commission City and County of San ...

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Other Matters In the regular course of the Airport’s business, the Commission and the City are parties to a variety of pending and threatened lawsuits and administrative proceedings with respect to the Airport’s operations and other matters, in addition to those specifically discussed herein. The Commission does not believe that any such lawsuits or proceedings will have a material adverse effect on the Airport’s business operations or financial condition. RATINGS Moody’s Investors Service (“Moody’s”) is expected to assign ratings of “Aaa/VMIG1” to the 2010A Bonds, Standard & Poor’s Ratings Services, a Division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s”) is expected to assign ratings of “AAA/A-1+” to the 2010A Bonds and Fitch, Inc., doing business as Fitch Ratings (“Fitch”) is expected to assign ratings of “AA+/F1+” to the 2010A Bonds, with the understanding that upon delivery of the 2010A Bonds, the Letter of Credit will be delivered by JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank”). See “THE LETTER OF CREDIT,” “THE BANK” and APPENDIX H–“FORM OF LETTER OF CREDIT.” The rating agencies have based their long term ratings on the 2010A Bonds on their analysis of the credit strength of the Airport and JPMorgan Chase Bank with respect to the 2010A Bonds using a “Two-Party-Pay” rating approach. The short-term ratings on the 2010A Bonds are based solely on the credit strength of the Letter of Credit. Moody’s, Standard & Poor’s and Fitch have assigned underlying ratings of “A1,” “A” and “A+’” respectively, to the 2010A Bonds. A rating reflects only the view of the agency giving such rating and is not a recommendation to buy, sell or hold the 2010A Bonds. An explanation of the significance of each rating may be obtained from the rating agencies at their respective addresses, as follows: Moody’s Investors Service at 7 World Trade Center, at 250 Greenwich Street, New York, New York 10007; Standard & Poor’s, 55 Water Street, New York, New York 10041 and Fitch, One State Street Plaza, New York, New York 10004. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that a rating will apply for any given period of time, or that the rating will not be revised downward or withdrawn if, in the judgment of the agency providing such rating, circumstances so warrant. The Commission undertakes no responsibility to maintain any rating or to oppose any revision or withdrawal of a rating. A downward revision or withdrawal of a rating may have an adverse effect on the marketability or market price of the 2010A Bonds. UNDERWRITING The Underwriters may offer and sell their respective Series of 2010A Bonds to certain dealers and other at prices lower than the public offering prices set forth on the inside cover page. 2010A-1 Bonds The 2010A-1 Bonds are being purchased through negotiation by Barclays Capital Inc. (“Barclays”) at a purchase price equal to $86,198,320.10 (representing the principal amount of the 2010A-1 Bonds, less an Underwriter’s discount equal to $176,679.90). The purchase contract pursuant to which Barclays is purchasing the 2010A-1 Bonds provides that Barclays will purchase all of the 2010A-1 Bonds if any are purchased. Under the terms of the purchase contract, the obligation of Barclays to make the purchase is subject to certain terms and conditions set forth in the purchase contract. 2010A-2 Bonds The 2010A-2 Bonds are being purchased through negotiation by Morgan Keegan & Company, Inc. (“Morgan Keegan”) at a purchase price equal to $57,508,607.50 (representing the principal amount of the 2010A-2 Bonds, less an Underwriter’s discount equal to $86,392.50). The purchase contract pursuant to which Morgan 94
Keegan is purchasing the 2010A-2 Bonds provides that Morgan Keegan will purchase all of the 2010A-2 Bonds if any are purchased. Under the terms of the purchase contract, the obligation of Morgan Keegan to make the purchase is subject to certain terms and conditions set forth in the purchase contract. 2010A-3 Bonds The 2010A-3 Bonds are being purchased through negotiation by RBC Capital Markets Corporation (“RBC Capital Markets”) at a purchase price equal to $71,892,000.00 (representing the principal amount of the 2010A-3 Bonds, less an Underwriter’s discount equal to $108,000.00. The purchase contract pursuant to which RBC Capital Markets is purchasing the 2010A-3 Bonds provides that RBC Capital Markets will purchase all of the 2010A-3 Bonds if any are purchased. Under the terms of the purchase contract, the obligation of RBC Capital Markets to make the purchase is subject to certain terms and conditions set forth in the purchase contract. VERIFICATION OF MATHEMATICAL COMPUTATIONS Upon delivery of the 2010A Bonds the arithmetical accuracy of certain computations included in the schedules provided by the Co-Financial Advisors on behalf of the Commission relating to the adequacy of forecasted receipts of principal and interest on the Governmental Obligations and cash to be held pursuant to the Escrow Agreement; will be verified by Grant Thornton LLP, independent certified public accountants (the “Verification Agent”). Such verification shall be based solely upon information and assumptions supplied to the Verification Agent by the Co-Financial Advisors. The Verification Agent has not made a study or evaluation of the information and assumptions on which such computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions or the achievability of the forecasted outcome. TAX MATTERS In the opinion of Orrick, Herrington & Sutcliffe LLP and Ronald E. Lee, Esq. (“Co-Bond Counsel”), based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the 2010A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”), except that no opinion is expressed as to the status of interest on any 2010A Bond for any period that such 2010A Bond is held by a “substantial user” of the facilities financed or refinanced by the Bonds or by a “related person” within the meaning of Section 147(a) of the Code. Co-Bond Counsel observe, however, that interest on the 2010A Bonds is a specific preference item for purposes of the federal individual and corporate alternative minimum taxes. Co-Bond Counsel is also of the opinion that interest on the 2010A Bonds is exempt from State of California personal income taxes. A complete copy of the proposed form of opinion of Co-Bond Counsel is set forth in APPENDIX G hereto. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2010A Bonds. The Commission has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the 2010A Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the 2010A Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the 2010A Bonds. The opinion of Co-Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Co-Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Co-Bond Counsel’s attention after the date of issuance of the 2010A Bonds may adversely affect the value of, or the tax status of interest on, the 2010A Bonds. Accordingly, the opinion of Co-Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Although Co-Bond Counsel is of the opinion that interest on the 2010A Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect a Beneficial Owner’s 95
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SAN FRANCISCO INTERNATIONAL AIRPORT
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2010A BONDS MATURITY SCHEDULE The i
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Information Provided by the Commiss
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Page Page VERIFICATION OF MATHEMATI
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The 2010A Bonds will be secured by
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Maturity Date (May 1) 2011 2012 201
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Interest on the 2010A Bonds will be
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Mandatory Sinking Fund Redemption T
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Redemption of Credit Provider Bonds
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SPECIAL CONSIDERATIONS RELATING TO
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“Operation and Maintenance Expens
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Fifth, to pay for necessary reconst
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Letter of Credit Upon the delivery
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Pooled Reserve Account The 1991 Mas
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No Acceleration The Bonds are not s
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LETTER OF CREDIT AND REIMBURSEMENT
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appealable judgment, to be null and
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In addition to revenues received fr
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In addition to these regulatory act
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Each of Moody’s, Standard & Poor
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Initiative, Referendum and Charter
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Jackson J. Wong was appointed Chief
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that supports all airlines in the I
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from $1.50 to $4.00. The Airport is
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Airport Security In the immediate a
Page 52 and 53: � United Airlines commenced daily
Page 54 and 55: The following table lists the air c
Page 56 and 57: During Fiscal Year 2008-09 approxim
Page 58 and 59: Domestic Enplanements. During Fisca
Page 60 and 61: International Enplanements. Interna
Page 62 and 63: Cargo Traffic and Landed Weight Car
Page 64 and 65: TOTAL LANDED WEIGHT BY AIRLINE †
Page 66 and 67: Settlement Agreement Under the Sett
Page 68 and 69: Expiration of the Settlement Agreem
Page 70 and 71: the beneficiaries (the people of th
Page 72 and 73: Hazardous Material Management Envir
Page 74 and 75: SUMMARY OF AIRPORT FINANCIAL RESULT
Page 76 and 77: Aviation Market Stimulus Program In
Page 78 and 79: On November 21, 2006, Travelex, the
Page 80 and 81: PRINCIPAL AIRPORT CONCESSIONAIRES
Page 82 and 83: Off-Airport Parking Facilities Seve
Page 84 and 85: INTEREST RATE SWAP POLICY MAXIMUM N
Page 86 and 87: The table below summarizes the inte
Page 88 and 89: SUMMARY OF PAYMENTS MADE BY THE AIR
Page 90 and 91: Voter Approved Changes to the Retir
Page 92 and 93: A decline in the actuarial value of
Page 94 and 95: Postemployment Health Care Benefits
Page 96 and 97: Under the Treasurer’s current inv
Page 98 and 99: Debt Service Requirements The follo
Page 100 and 101: Current and Future Financings Capit
Page 104 and 105: federal, state or local tax liabili
Page 106 and 107: MISCELLANEOUS This Official Stateme
Page 108: (This Page Intentionally Left Blank
Page 149 and 150: Introduction APPENDIX B INFORMATION
Page 151 and 152: APPENDIX C SUMMARY OF CERTAIN PROVI
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Closing Date means the date upon wh
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Interest Payment Date means each da
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the Trustee for cancellation; (b) B
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payment agreement with the United S
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Special Facility means any existing
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Revenue Fund; Allocation of Net Rev
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Moneys in the respective accounts i
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Investments are allocated. Amounts
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Subordinate Bonds The Commission ma
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act or thing the effect of which wo
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filing of any such petition or to t
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moneys, funds and properties pledge
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The recitals, statements and repres
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The Trustee or the Paying Agent, as
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to or greater than the Credit Facil
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(a) such 2010A Bonds sold by the Re
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The Remarketing Agent The Remarketi
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APPENDIX D SUMMARIES OF CERTAIN PRO
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computations made in accordance wit
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APPENDIX E SUMMARY OF CERTAIN PROVI
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statement, it must be available fro
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Duties, Immunities and Liabilities
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APPENDIX F INFORMATION REGARDING TH
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Ambac Assurance’s consolidated fi
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Capitalization of AGM At September
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The available amount of each MBIA s
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complaint also alleges that certain
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APPENDIX G PROPOSED FORM OF OPINION
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APPENDIX H JPMORGAN CHASE BANK, NAT
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The Available Amount (as hereinafte
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JPMorgan Chase Bank, National Assoc
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IN WITNESS WHEREOF, this Certificat
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(ii) $_______________________ is de
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The undersigned Transferor acknowle
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The Bank of New York Trust Company,
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The Bank of New York Trust Company,
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