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

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