Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
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APPENDIX F<br />
INFORMATION REGARDING THE RESERVE ACCOUNT SURETY BONDS<br />
The following information under the caption “Ambac Surety Bond” has been provided by Ambac Assurance<br />
Corporation, the following information under the caption “Financial Security Assurance Surety Bond” has been<br />
provided by Assured Guaranty Corp., the following information under the caption “MBIA Surety Bond” has been<br />
provided by National Public Finance Guarantee Corporation <strong>and</strong> the following information under the caption<br />
“Syncora Guarantee Inc. (formerly, XL Capital) Surety Bonds” has been provided by Syncora Guarantee Inc. for use<br />
in this <strong>Official</strong> <strong>Statement</strong>. The <strong>Commission</strong> makes no representation as to the accuracy or completeness <strong>of</strong> this<br />
information or as to the absence <strong>of</strong> material adverse changes in this information subsequent to the date here<strong>of</strong>.<br />
Ambac Surety Bonds<br />
Surety bonds were issued by Ambac Assurance Corporation (“Ambac”) in the amount <strong>of</strong> $20,000,000 <strong>and</strong><br />
expiring on May 1, 2025 <strong>and</strong> in the amount <strong>of</strong> $19,328,400 expiring on May 1, 2026, both <strong>of</strong> which are currently on<br />
deposit in the Reserve Account. Each surety bond provides that upon the later <strong>of</strong> (i) one (1) day after receipt by Ambac<br />
<strong>of</strong> a dem<strong>and</strong> for payment executed by the Trustee certifying that provision for the payment <strong>of</strong> principal <strong>of</strong> or interest on<br />
the Participating Series <strong>of</strong> Bonds when due has not been made or (ii) the interest payment date specified in the Dem<strong>and</strong><br />
for Payment submitted to Ambac, Ambac will promptly deposit funds with the Trustee sufficient to enable the Trustee<br />
to make such payments due on the Participating Series <strong>of</strong> Bonds, but in no event exceeding the Surety Bond Coverage,<br />
as defined in the Ambac surety bond.<br />
Pursuant to the terms <strong>of</strong> the Ambac surety bonds, the Surety Bond Coverage is automatically reduced to the<br />
extent <strong>of</strong> each payment made by Ambac under the terms there<strong>of</strong>, <strong>and</strong> the <strong>Commission</strong> is required to reimburse Ambac<br />
for any draws under the Ambac surety bond with interest at a market rate. Upon such reimbursement, the Ambac<br />
surety bond is reinstated to the extent <strong>of</strong> each principal reimbursement up to but not exceeding the Surety Bond<br />
Coverage. The reimbursement obligation <strong>of</strong> the <strong>Commission</strong> is subordinate to the <strong>Commission</strong>’s obligations with<br />
respect to the Bonds.<br />
The Ambac surety bonds do not insure against nonpayment caused by the insolvency or negligence <strong>of</strong> the<br />
Trustee.<br />
Ambac Assurance Corporation<br />
Ambac Assurance is a Wisconsin-domiciled stock insurance corporation regulated by the Office <strong>of</strong> the<br />
<strong>Commission</strong>er <strong>of</strong> Insurance <strong>of</strong> the State <strong>of</strong> Wisconsin, <strong>and</strong> is licensed to do business in 50 states, the District <strong>of</strong><br />
Columbia, the Territory <strong>of</strong> Guam, the Commonwealth <strong>of</strong> Puerto Rico <strong>and</strong> the U.S. Virgin Isl<strong>and</strong>s, with admitted assets<br />
<strong>of</strong> approximately $8,986,000,000 (unaudited) <strong>and</strong> statutory capital <strong>of</strong> approximately $1,161,000,000 (unaudited) as <strong>of</strong><br />
September 30, 2009. Statutory capital consists <strong>of</strong> Ambac Assurance’s policyholders’ surplus <strong>and</strong> statutory contingency<br />
reserve. Ambac Assurance has been assigned the following financial strength ratings by the following rating agencies:<br />
Caa2, developing outlook, by Moody’s Investors Service, Inc., <strong>and</strong> CC, developing outlook, by St<strong>and</strong>ard <strong>and</strong> Poor’s<br />
Ratings Services, a division <strong>of</strong> The McGraw-Hill Companies, Inc.<br />
Ambac Assurance has obtained a ruling from the Internal Revenue Service to the effect that the insuring <strong>of</strong> an<br />
obligation by Ambac Assurance will not affect the treatment for federal income tax purposes <strong>of</strong> interest on such<br />
obligation <strong>and</strong> that insurance proceeds representing maturing interest paid by Ambac Assurance under policy provisions<br />
substantially identical to those contained in the Financial Guaranty Insurance Policy shall be treated for federal income<br />
tax purposes in the same manner as if such payments were made by the Obligor.<br />
Ambac Assurance makes no representation regarding the Bonds or the advisability <strong>of</strong> investing in the Bonds<br />
<strong>and</strong> makes no representation regarding, nor has it participated in the preparation <strong>of</strong>, this <strong>Official</strong> <strong>Statement</strong> other than the<br />
information supplied by Ambac Assurance <strong>and</strong> presented under the heading “–Ambac Surety Bonds.”<br />
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