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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SPECIAL CONSIDERATIONS RELATING TO THE 2010A BONDS<br />
The following information, to the extent it describes the practices <strong>of</strong> the Remarketing Agents, has been<br />
provided by the Remarketing Agents for use in this <strong>Official</strong> <strong>Statement</strong>. The <strong>Commission</strong> does not <strong>and</strong> cannot make<br />
any representation as to the accuracy or completeness <strong>of</strong> that information or as to any material changes therein<br />
subsequent to the date here<strong>of</strong>.<br />
<strong>Commission</strong> Obligation to Pay Purchase Price<br />
The <strong>Commission</strong>’s obligation to pay the purchase price <strong>of</strong> any 2010A Bonds upon the optional or<br />
m<strong>and</strong>atory tender there<strong>of</strong> for purchase is limited to: (i) the proceeds <strong>of</strong> any remarketing <strong>of</strong> such 2010A Bonds by the<br />
applicable Remarketing Agent, (ii) payments made by the Bank pursuant to the Letter <strong>of</strong> Credit, <strong>and</strong> (iii) other<br />
available funds <strong>of</strong> the <strong>Airport</strong> that do not constitute “Revenues.” Payment <strong>of</strong> the purchase price is not secured by a<br />
pledge <strong>of</strong> or lien on Revenues. The <strong>Commission</strong> has only limited funds available that do not constitute Revenues,<br />
<strong>and</strong> the <strong>Commission</strong> is free to pledge or otherwise encumber <strong>and</strong> apply those funds to other lawful purposes. If the<br />
Bank fails to make any payments pursuant to the Letter <strong>of</strong> Credit that are necessary to pay the purchase price <strong>of</strong> any<br />
2010A Bonds, it is unlikely that the <strong>Commission</strong> would have sufficient funds to do so. Thus, investors should look<br />
primarily to the credit <strong>of</strong> the Bank in determining the security for the payment when due <strong>of</strong> the purchase price <strong>of</strong> the<br />
2010A Bonds. See “CERTAIN RISK FACTORS–Credit Risk <strong>of</strong> Financial Institutions Providing Credit Enhancement,<br />
Liquidity Support <strong>and</strong> Other Financial Products Relating to the <strong>Airport</strong> Bonds.” Any resulting failure by the<br />
<strong>Commission</strong> to pay the purchase price would, however, constitute an Event <strong>of</strong> Default under the 1991 Resolution.<br />
Under the 1991 Resolution, the obligation <strong>of</strong> the Remarketing Agent to remarket the 2010A Bonds would cease.<br />
The Remarketing Agents would also have the right to suspend their obligation to set the Weekly Rate on the 2010A<br />
Bonds. If any Remarketing Agent does not set the Weekly Rate on the 2010A Bonds for any reason, the 1991<br />
Resolution provides that the Weekly Rate would be set by the Trustee at the SIFMA Municipal Swap I rate as <strong>of</strong> the<br />
effective date <strong>of</strong> each new Weekly Rate. See “DESCRIPTION OF THE 2010A BONDS–Weekly Mode Provisions–<br />
Alternate Rates.”<br />
Remarketing Agents are Paid by the <strong>Commission</strong><br />
The responsibility <strong>of</strong> each Remarketing Agent includes determining the interest rate from time to time <strong>and</strong><br />
remarketing the related Series <strong>of</strong> 2010A Bonds that are tendered by the owners there<strong>of</strong> for optional or m<strong>and</strong>atory<br />
purchase, subject in to the terms <strong>of</strong> the related Remarketing Agreement, all as further described under “DESCRIPTION<br />
OF THE 2010A BONDS–Optional <strong>and</strong> M<strong>and</strong>atory Tenders for Purchase.” The Remarketing Agents are appointed <strong>and</strong><br />
paid by the <strong>Commission</strong> for their services. As a result, the interests <strong>of</strong> the Remarketing Agents may differ from<br />
those <strong>of</strong> existing holders <strong>and</strong> potential purchasers <strong>of</strong> 2010A Bonds.<br />
Remarketing Agents Routinely Purchase the 2010A Bonds for their Own Accounts<br />
Each Remarketing Agent acts as a remarketing agent for a variety <strong>of</strong> variable rate dem<strong>and</strong> obligations <strong>and</strong>,<br />
in its sole discretion, routinely purchases such obligations for its own account. Each Remarketing Agent is<br />
permitted, but is not obligated, to purchase the related tendered Series <strong>of</strong> 2010A Bonds for its own account <strong>and</strong>, in<br />
its sole discretion, may acquire such tendered 2010A Bonds <strong>of</strong> a related Series in order to achieve a successful<br />
remarketing <strong>of</strong> the tendered 2010A Bonds (that is, because there otherwise are not enough buyers to purchase such<br />
tendered 2010A Bonds) or for other reasons. However, no Remarketing Agent is obligated to purchase 2010A<br />
Bonds <strong>of</strong> a related Series, <strong>and</strong> may cease doing so at any time without notice. The Remarketing Agent may also<br />
make a market in such Series <strong>of</strong> 2010A Bonds by routinely purchasing <strong>and</strong> selling the 2010A Bonds <strong>of</strong> such Series<br />
other than in connection with an optional or m<strong>and</strong>atory tender <strong>and</strong> remarketing. Such purchases <strong>and</strong> sales may be at<br />
or below par. However, no Remarketing Agent is required to make a market in 2010A Bonds . A Remarketing<br />
Agent may also sell the 2010A Bonds <strong>of</strong> the related Series it has purchased to one or more affiliated investment<br />
vehicles for collective ownership or enter into derivative arrangements with affiliates or others. The purchase <strong>of</strong><br />
2010A Bonds <strong>of</strong> a related Series by a Remarketing Agent may create the appearance that there is greater third-party<br />
dem<strong>and</strong> for the Series <strong>of</strong> 2010A Bonds in the market than is actually the case. The practices described above also<br />
may result in fewer 2010A Bonds being tendered in a remarketing.<br />
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