Issue 36C Remarketing Memorandum
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SAN FRANCISCO INTERNATIONAL AIRPORT SECOND SERIES VARIABLE RATE REVENUE REFUNDING BONDS ISSUE 36C Remarketing Memorandum Airport Commission of the City and County of San Francisco San Francisco International Airport Second Series Variable Rate Revenue Refunding Bonds Issue 36C REMARKETING—NOT A NEW ISSUE—BOOK-ENTRY ONLY RATINGS: Moody’s: Aa1/VMIG1 S&P: AAA/A-1 Fitch: AA/F1 (See “RATINGS” herein) On June 3, 2009, Orrick, Herrington & Sutcliffe LLP and Quateman LLP, Prior Co-Bond Counsel to the Commission, rendered their respective opinions to the effect that, based upon an analysis of then-existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Issue 36C Bonds was excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), except that no opinion was expressed as to the status of interest on any Issue 36C Bond for any period that such Issue 36C Bond was held by a “substantial user” of the facilities financed or refinanced by the Issue 36C Bonds or by a “related person” within the meaning of Section 147(a) of the Code. Prior Co-Bond Counsel further opined that interest on the Issue 36C Bonds was not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes nor was it included in adjusted current earnings when calculating corporate alternative minimum taxable income. Prior Co-Bond Counsel also opined that interest on the Issue 36C Bonds was exempt from State of California personal income taxes. Prior Co-Bond Counsel expressed no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Issue 36C Bonds. Prior Co-Bond Counsel are not serving as counsel to the Commission in connection with this remarketing, have not been engaged to deliver and thus will not be delivering any update to their opinions delivered on June 3, 2009, and in particular are not rendering any opinion on the current tax status of the Issue 36C Bonds. In connection with the replacement of the then-existing letter of credit securing the Issue 36C Bonds with a new letter of credit, Orrick, Herrington & Sutcliffe LLP and GCR, LLP, Prior Remarketing Co-Bond Counsel to the Commission, delivered their respective opinions dated July 13, 2011, to the effect that, based upon an analysis of then-existing laws, regulations, rulings, and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, the delivery of a letter of credit dated July 13, 2011 as substitute liquidity for the Issue 36C Bonds and the remarketing of the Issue 36C Bonds on July 13, 2011, did not, in and of itself, adversely affect any exclusion of interest on the Issue 36C Bonds from gross income for federal tax law purposes. Prior Remarketing Co-Bond Counsel expressed no opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Issue 36C Bonds. Prior Remarketing Co-Bond Counsel are not serving as counsel to the Commission in connection with this remarketing, have not been engaged to deliver and thus will not be delivering any update to their opinion delivered on July 13, 2011, and in particular are not rendering any opinion on the current tax status of the Issue 36C Bonds. In connection with the replacement of the existing letter of credit securing the Issue 36C Bonds with the letter of credit to be delivered by The Bank of Tokyo-Mitsubishi UFJ Ltd., Squire Sanders (US) LLP and Garcia Hernández Sawhney & Bermudez LLP, Co-Bond Counsel to the Commission, will deliver their respective opinions that such replacement will not, in and of itself, adversely affect any exclusion of interest on the Issue 36C Bonds from gross income for federal income tax purposes. Co-Bond Counsel, however, are not rendering any opinion on the current tax status of the Issue 36C Bonds. See “TAX MATTERS.” $36,145,000 AIRPORT COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO SAN FRANCISCO INTERNATIONAL AIRPORT SECOND SERIES VARIABLE RATE REVENUE REFUNDING BONDS ISSUE 36C (Non-AMT/Private Activity) Remarketing Date: April 25, 2014 Price: 100% Due: May 1, 2026 The Airport Commission (the “Commission”) of the City and County of San Francisco (the “City”) will remarket $36,145,000 principal amount of its San Francisco International Airport Second Series Variable Rate Revenue Refunding Bonds, Issue 36C (the “Issue 36C Bonds”). The Commission will remarket the Issue 36C Bonds at a price equal to par. The San Francisco International Airport (the “Airport”) is a department of the City. The Bank of New York Mellon Trust Company, N.A. has been appointed by the Commission to act as Trustee for the Bonds, including the Issue 36C Bonds. The Commission will remarket the Issue 36C Bonds in the Weekly Mode, in which the Issue 36C Bonds will bear interest at a Weekly Rate determined by the Remarketing Agent. The Commission may convert the Issue 36C Bonds to a different Mode. While the Issue 36C Bonds are in the Weekly Mode, the Commission will pay interest on the Issue 36C Bonds on the first business day of each calendar month. This Remarketing Memorandum provides information concerning the Issue 36C Bonds in a Weekly Mode only. Owners and potential Owners of the Issue 36C Bonds should not rely on this Remarketing Memorandum for information concerning the Issue 36C Bonds following any conversion of the Issue 36C Bonds to a different Mode, but should look solely to the offering document to be used in connection with any such conversion. The Issue 36C Bonds are subject to optional and mandatory redemption prior to their maturity date and are subject to optional and mandatory tender for purchase. The payment of principal of (but not purchase price) and interest on all Bonds issued or to be issued pursuant to the 1991 Master Resolution (as defined herein), including the Issue 36C Bonds, are equally secured by a pledge of, lien on and security interest in the Net Revenues (as defined herein) of the Airport. The Issue 36C Bonds are fully registered bonds, registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York (“DTC”). So long as Cede & Co. is the registered owner of any Issue 36C Bonds, payment of purchase price, principal and interest will be made to Cede & Co. as nominee of DTC, which is required in turn to remit such purchase price, principal and interest to the DTC Participants for subsequent disbursement to the Beneficial Owners. The Issue 36C Bonds are being remarketed in connection with the replacement of the prior letter of credit securing the Issue 36C Bonds. Payment of the principal and purchase price of and interest on the Issue 36C Bonds following the remarketing will be secured by funds drawn under an irrevocable direct-pay letter of credit (the “Letter of Credit”) issued to the Trustee for the benefit of the Owners by The Bank of Tokyo-Mitsubishi UFJ Ltd., acting through its New York Branch (the “Bank”). The Letter of Credit will be in effect from the date of the remarketing of the Issue 36C Bonds through April 25, 2018 (the “Stated Expiration Date”), unless extended or terminated earlier upon the occurrence of certain events as described in the Letter of Credit. The Issue 36C Bonds are special, limited obligations of the Commission, payable as to principal and interest (but not as to purchase price) solely out of, and secured by a pledge of and lien on, the Net Revenues of the Airport and the funds and accounts provided for in the 1991 Master Resolution. Neither the credit nor taxing power of the City and County of San Francisco is pledged to the payment of the principal or purchase price of or interest on the Issue 36C Bonds. No holder of an Issue 36C Bond shall have the right to compel the exercise of the taxing power of the City and County of San Francisco to pay the principal or purchase price of the Issue 36C Bonds or the interest thereon. The Commission has no taxing power whatsoever. In connection with the remarketing of the Issue 36C Bonds, certain legal matters will be passed upon for the Commission by the City Attorney; Squire Sanders (US) LLP, San Francisco, California, and Garcia Hernández Sawhney & Bermudez LLP, Oakland, California, Co-Bond Counsel to the Commission; and Nixon Peabody LLP, San Francisco, California, Disclosure Counsel to the Commission; for the Remarketing Agent by its counsel, Hawkins Delafield & Wood LLP, San Francisco, California; and for the Bank by its counsel, Chapman and Cutler LLP, Chicago, Illinois and by its Japanese Counsel. The Commission expects to deliver the remarketed Issue 36C Bonds through the facilities of DTC on or about April 25, 2014, in New York, New York against payment therefor. BofA Merrill Lynch Dated: April 22, 2014 GENERAL INFORMATION The Issue 36C Bonds will bear interest at a Weekly Rate determined by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Remarketing Agent, as described in this Remarketing Memorandum, subject to certain conditions and exceptions. The Airport will pay interest on the Issue 36C Bonds on each Interest Payment Date, which is the first Business Day of each calendar month. The first Interest Payment Date following the remarketing is May 1, 2014. See “DESCRIPTION OF THE ISSUE 36C BONDS–Weekly Mode Provisions.” Series: Issue 36C (Non-AMT/ Private Activity) Principal Amount: $36,145,000 Maturity Date: May 1, 2026 Interest Mode: Weekly(1) Interest Payment Date: First Business Day of each calendar month Rate Determination Date: Tuesday Letter of Credit Provider The Bank of Tokyo-Mitsubishi UFJ Ltd., acting through its New York Branch Remarketing Agent: Merrill Lynch, Pierce, Fenner & Smith Incorporated CUSIP No.†: 79766DBD0 † Copyright 2014, American Bankers Association.