Special Facilities 2015C
Total Page:16
File Type:pdf, Size:1020Kb
NEW ISSUE—BOOK-ENTRY ONLY Rating: See “RATING” herein. In the opinion of Bracewell & Giuliani LLP and West & Associates, LLP (“Co-Bond Counsel”), under existing law, (i) interest on the Series 2015C Bonds (as defined below) is excludable from gross income for federal income tax purposes, except with respect to interest on any Series 2015C Bond for any period during which such Series 2015C Bond is held by a person who, within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as amended, is a “substantial user” or a “related person” to such a “substantial user” of the facilities financed or refinanced with the proceeds of the Series 2015C Bonds, as described under “TAX MATTERS” herein, and (ii) interest on the Series 2015C Bonds is an item of tax preference that is includable in alternative minimum taxable income for purposes of determining the alternative minimum tax imposed on individuals and corporations. See “TAX MATTERS” herein for a discussion of the opinion of Co-Bond Counsel. $65,785,000 City of Houston, Texas Airport System Special Facilities Revenue Refunding Bonds (United Airlines, Inc. Airport Improvement Projects), Series 2015C (AMT) Date of Interest Accrual: Date of Delivery Due: July 15, as shown on the inside cover page hereto The City of Houston, Texas Airport System Special Facilities Revenue Refunding Bonds (United Airlines, Inc. Airport Improvement Projects), Series 2015C (AMT) (the “Series 2015C Bonds”) will be issued in fully-registered form in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), and will be available to ultimate purchasers under the book-entry only system maintained by DTC. The Series 2015C Bonds will be issued in denominationsof $100,000 or any integral multiple of $5,000 in excess thereof. So long as Cede & Co. is the registered owner of the Series 2015C Bonds, principal of, premium, if any, and interest on the Series 2015C Bonds will be payable by The Bank of New York Mellon Trust Company, National Association, as trustee (the “Trustee”), to DTC, which will in turn remit such payments to its participants for subsequent disbursement to beneficial owners of such Series 2015C Bonds, as more fully described herein. Interest on the Series 2015C Bonds will be payable on each January 15 and July 15, commencing July 15, 2015, until maturity or earlier redemption. The Series 2015C Bonds will be subject to extraordinary mandatory redemption prior to maturity, each as more fully described herein under “THE SERIES 2015C BONDS—Extraordinary Mandatory Redemption.” The Series 2015C Bonds are being issued by the City of Houston, Texas (the “City”) to provide a portion of the funds for the redemption of the City’s outstanding Airport System Special Facilities Revenue Bonds (Continental Airlines, Inc. Airport Improvement Projects), Series 1997C (the “Series 1997C Bonds”) and Airport System Special Facilities Revenue Bonds (Continental Airlines, Inc. Airport Improvement Projects), Series 1998C (the “Series 1998C Bonds” and, together with the Series 1997C Bonds, the “Series 97/98C Bonds”). The Series 97/98C Bonds were originally issued to finance the cost of the improvement, construction and installation of certain facilities to support the operations of United Airlines, Inc. (“United”) at George Bush Intercontinental Airport/Houston (the “Airport”), including an aircraft hangar, a maintenance and parts storage facility, a mail sorting facility, flight simulator and in-flight training facilities, and certain improvements to hangar facilities. The facilities constructed with the proceeds of the Series 97/98C Bonds have been completed and are currently in service at the Airport. The Series 2015C Bonds will be issued as special limited obligations of the City, payable solely from and secured by a pledge of certain pledged revenues of the City more fully described herein, consisting primarily of net rentals to be paid by United pursuant to the Lease (as defined herein) between the City and In addition, the payment to the Trustee of all amounts required for the full and prompt payment of the principal of, premium, if any, and interest on the Series 2015C Bonds will be unconditionally guaranteed by United pursuant to a Guaranty between United and the Trustee, as further described herein. The Series 2015C Bonds will also be payable from and secured by a portion of certain rentals that may be realized by the City following a termination of United’s possession rights under the Lease while any Series 2015C Bonds remain outstanding, through a reletting of the Special Facilities by the City to one or more replacement tenants, all as further described herein. United is a U.S.-based air carrier that transports people and cargo through its mainline and regional operations, either directly or through participation in Star Alliance®. On March 31, 2013, United Air Lines, Inc. (“Old United”), a wholly-owned subsidiary of United Continental Holdings, Inc. (“UAL”), merged with and into Continental Airlines, Inc. (“Continental”), another wholly-owned subsidiary of UAL, to form one legal entity (the “Airlines Merger”), with Continental continuing as the surviving corporation of the Airlines Merger and as a wholly-owned subsidiary of UAL. Upon closing of the Airlines Merger on March 31, 2013, Continental’s name was changed to United Airlines, Inc. The Series 2015C Bonds shall never constitute an indebtedness of the City within the meaning of any provisions of the Constitution or laws of the State of Texas or the City’s Home Rule Charter and shall not be general obligations of the City. The holders of the Series 2015C Bonds shall never have the right to demand payment thereof out of any funds raised or to be raised by taxation, and may not be repaid in any circumstances from tax revenues or general revenues of the City’s airport system. AN INVESTMENT IN THE SERIES 2015C BONDS INVOLVES SIGNIFICANT RISKS. For more complete information with respect to the security and sources of payment for the Series 2015C Bonds and certain risks with respect thereto, see “SECURITY FOR THE SERIES 2015C BONDS,” and “CERTAIN BONDOWNERS’ RISKS” herein. PRINCIPAL AMOUNT, MATURITY DATE, INTEREST RATE, PRICE AND YIELD ON INSIDE COVER PAGE This cover page and the inside cover page hereto contain certain information for quick reference only. They are not intended to be a summary of all factors relating to an investment in any of the Series 2015C Bonds. Investors are advised to read the Official Statement in its entirety before making an investment decision. The Series 2015C Bonds are offered when, as and if issued by the City and accepted by the Underwriters (as defined herein) and subject to the approving opinion of the Attorney General of the State of Texas and to receipt of an approving legal opinion of Co-Bond Counsel. Certain legal matters will be passed upon for the City by the City Attorney; for United by Richa Himani, its Senior Counsel - Commercial Transactions, and for the Underwriters by their counsel O’Melveny & Myers LLP. The Series 2015C Bonds are expected to be available for delivery through the facilities of DTC in New York, New York, on or about March 26, 2015. Citigroup Barclays Cabrera Capital Markets, LLC Siebert Brandford Shank & Co., L.L.C. March 11, 2015 $65,785,000 City of Houston, Texas Airport System Special Facilities Revenue Refunding Bonds (United Airlines, Inc. Airport Improvement Projects), Series 2015C (AMT) $65,785,000 5.000% Term Bond due July 15, 2020 Priced at 105.610% (Yield 3.820%) CUSIP† 4423487U6 † CUSIP is a registered trademark of The American Bankers Association. CUSIP numbers have been assigned to the Series 2015C Bonds by the CUSIP Global Services, managed by Standard and Poor’s Financial Services LLC on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for CUSIP Global Services. CUSIP numbers are provided solely for the convenience of potential investors. None of the City, United or the Underwriters are responsible for the selection or accuracy of the CUSIP numbers set forth herein. No broker, dealer, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement (including Appendices) in connection with the offering made hereby and, if given or made, such information or representations must not be relied upon as having been authorized by the City, United or the Underwriters. Neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create any implication that there has been no change in the affairs of the City or United since the date hereof. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any of the Series 2015C Bonds in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale. The City neither has nor assumes any responsibility as to the accuracy of the information in this Official Statement (other than that under the headings “GEORGE BUSH INTERCONTINENTAL AIRPORT/HOUSTON—General,” “NO LITIGATION” and “FINANCIAL ADVISOR,” for which the City assumes full and sole responsibility). IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF ANY OF THE SERIES 2015C BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT THAT MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. CERTAIN STATEMENTS CONTAINED IN THIS OFFICIAL STATEMENT REFLECT NOT HISTORICAL FACTS BUT FORECASTS, PROJECTIONS, ESTIMATES AND OTHER “FORWARD- LOOKING STATEMENTS.” IN THIS RESPECT, THE WORDS “ESTIMATE,” “PROJECT,” “ANTICIPATE,” “EXPECT,” “INTEND,” “BELIEVE,” “FORECAST,” “ASSUME” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.