ORDINANCE authorizing the issuance, sale and delivery of Airport System Special Facilities Revenue Bonds (United Airlines, Inc. Technical Operations Center Project), Series 2017 (AMT) and Airport System Special Facilities Revenue Bonds (United Airlines, Inc. Airport Improvement Projects), Series 2017C (AMT); approving and authorizing the execution and delivery of the UTOC Trust Indenture, the third supplemental non-terminal trust indenture and the first amendment to the C Special Facilities Lease Agreement; approving and authorizing the execution and delivery of the bond purchase agreement and other related agreements to each series of such bonds; authorizing the preparation and distribution of a preliminary official statement and official statement; making certain findings with respect thereto and containing other provisions relating to the subject; and declaring an emergency

This item should only be considered after passage of Item 18 above

SUBJECT:   Ordinance authorizing the issuance, sale and delivery of City of Houston, Texas, Airport System Special Facilities Revenue Bonds (UTOC Project, Series 2017 (AMT) and City of Houston, Texas, Airport System Special Facilities Revenue Bonds (Airport Improvement Projects), Series 2017C (AMT)

RECOMMENDATION: (Summary) Approve an ordinance authorizing the issuance, sale and delivery of City of Houston, Texas, Airport System Special Facilities Revenue Bonds (UTOC Project, Series 2017 (AMT) and City of Houston, Texas, Airport System Special Facilities Revenue Bonds (Airport Improvement Projects), Series 2017C (AMT); Authorizing the execution and delivery of related trust indentures, an amendment to the non-terminal lease and related agreements

SPECIFIC EXPLANATION:

City Council will approve the final par amount, interest rates and other terms of the Special Facilities Bonds pursuant to a subsequent ordinance to be presented in December 2017.

The special facilities lease agreements related to each series of Special Facilities Bonds provides that as long as the Special Facilities Bonds remain outstanding, United will be obligated to pay the principal and interest on the bonds.  The City is not obligated to pay principal of or interest on the Special Facilities Bonds.  Prompt payment of principal and interest on the Special Facilities Bonds will be unconditionally guaranteed by United. 

The Special Facilities Bonds will not constitute an indebtedness of the City, nor will they be a general obligation of the City.  No holder of any Special Facilities Bond shall have the right to demand payment of any funds raised or to be raised by taxation, and may not be repaid in any circumstances from tax revenues.  In addition, the Special Facilities Bonds shall not constitute obligations of the City’s Airport System, nor will revenues be pledged or made available to repay any of the Special Facilities Bonds.    

The Finance Working Group recommends the Special Facilities Bonds be issued through a negotiated financing with Citigroup serving as senior manager. BBVA Securities, Cabrera Capital Markets, Loop Capital Markets and Wells Fargo Securities are recommended as co-managers.  Bracewell LLP and West & Associates, LLP are recommended as co-bond counsel.

This transaction was presented to the Budget and Fiscal Affairs Committee on October 3, 2017.

Recommendation

The Finance Working Group recommends the approval of this item.

Melissa Dubowski                                   Phone: 832-393-9101