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

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