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

Amounts on deposit in the Pooled Reserve Account may be used solely for the purposes of (i) paying
interest, principal or mandatory sinking fund payments on the Participating Series of Bonds whenever any moneys
then credited to the debt service funds with respect to such Participating Series of Bonds are insufficient for such
purposes, and (ii) reimbursing the providers of any surety bonds or other credit facilities credited to the Participating
Series Reserve Account for any payments thereunder. In the event that the balance in the Participating Series
Reserve Account is diminished below the Pooled Reserve Requirement, the Trustee is required to immediately
notify the Commission of such deficiency and the Commission is required under the 1991 Master Resolution to
replenish the Reserve Account by transfers of available Net Revenues over a period not to exceed 12 months from
the date on which the Commission is notified of such deficiency. See APPENDIX C–“SUMMARIES OF CERTAIN
PROVISIONS OF THE 1991 MASTER RESOLUTION–Debt Service and Reserve Funds–Application and Valuation of the
Reserve Account.” Future Series of Bonds may be secured by the Pooled Reserve Account, the 2009 Reserve
Account (described below), a separate reserve account, or might not be secured by any debt service reserve account,
as the Commission shall determine.
Although the 2010A Bonds are not secured by either the 2009 Reserve Account or the separate reserve
accounts established for other Series of Bonds, a deficiency in any of such other reserve accounts may require the
Commission to apply Net Revenues to cure such deficiency and thereby reduce Net Revenues available to pay the
2010A Bonds. Any amounts on deposit in the Pooled Account in excess of the Pooled Reserve Requirement may be
withdrawn by the Commission.
Forward Purchase and Sale Agreements
The Commission has provided for the investment of a portion of the cash balance in the Pooled Reserve
Account, as well as a portion of the amounts accumulated from time to time in the debt service funds for the Bonds,
pursuant to long-term Forward Purchase and Sale Agreements which provide a fixed rate of return on specified
permitted investments. These agreements have been entered into in order to increase the investment return of the
Pooled Reserve Account. The Commission may invest additional amounts in the Reserve Fund and debt service
funds pursuant to such types of agreements. The permitted investments delivered from time to time by the providers
of such Agreements are the property of the Commission and the Commission has received bankruptcy opinions of
counsel to the respective providers to such effect. Thus, the principal amounts invested pursuant to such
Agreements are not at risk in the event of the bankruptcy or insolvency of the respective providers.
Contingent Payment Obligations
The Commission has entered into, and may in the future enter into, contracts and agreements in the course
of its business that include an obligation on the part of the Commission to make payments contingent upon the
occurrence or non-occurrence of certain future events, including events that are beyond the direct control of the
Commission. These agreements include interest rate swap and other similar agreements, investment agreements,
including for the future delivery of specified securities, letter of credit and line of credit agreements for future
advances of funds to the Commission, and other agreements. See “–Reserve Fund; Reserve Account Surety Bonds–
Forward Purchase and Sale Agreements” and “–Other Debt Issuance–Subordinate Bonds.” For summaries of the
Interest Rate Swap Policy and the swap agreements entered into by the Commission in connection with the Issue
36A through 36D Bonds, the Issue 37B Bonds, the Issue 37C Bonds and the 2010A Bonds, see “AIRPORT’S
FINANCIAL AND RELATED INFORMATION–Interest Rate Swaps.”
Such contracts and agreements may provide for contingent payments that may be conditioned upon the
future credit ratings of the Airport and/or of the other parties to the contract or agreement, maintenance by the
Commission of specified financial ratios, the inability of the Commission to obtain long-term refinancing for
shorter-term obligations or liquidity arrangements, and other factors. Such payments may be payable on a parity
with debt service on the Bonds, including any “Swap Payments” to a Swap Counterparty as such term is defined in
the 1991 Master Resolution.
The amount of any such contingent payments may be substantial. To the extent that the Commission does
not have sufficient funds on hand to make any such payment, it is likely that the Commission would seek to borrow
such amounts through the issuance of additional Bonds or Subordinate Bonds (including commercial paper).
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