In 1998, the Port of Seattle issued $262.5 million of stand-alone passenger facility charge (PFC) revenue bonds. Proceeds of the Series 1998 PFC Bonds are being used to help fund a $1.2 billion capital improvement program, including a new runway, terminal expansion, and passenger conveyance system improvements.

The Port was one of the first airport sponsors to issue stand-alone PFC Bonds. Leigh Fisher Associates was retained to prepare a feasibility report for this financing. Working with other members of the Port's financing team, Leigh Fisher Associates also helped the Port set a new standard in PFC financing by (1) developing a true open-lien structure for the financing that maintains flexibility in how excess PFC revenues are used, (2) obtaining favorable PFC termination provisions from the FAA, and (3) addressing rating agency concerns to achieve favorable investment grade ratings.

Leigh Fisher Associates created a financial model allowing the Port to test compliance with a first lien sufficiency covenant, which requires the Port to manage its PFC expenditures so that PFC revenues always exceed PFC Bond debt service. Leigh Fisher Associates played a key role in preparing the PFC Bond Resolution, preliminary official statement, and other bond documents, and participated in rating agency presentations. Leigh Fisher Associates also developed several rigorous sensitivity tests, which were an important factor considered by rating agency analysts.

Unique aspects of the Port of Seattle stand-alone PFC Bonds included:

• Largest stand-alone PFC financing to date
• Open-lien structure, giving the Port the flexibility to use excess PFC revenues however it chooses (pay-as-you-go, additional PFC leveraging, or redemption of outstanding PFC Bonds) subject to meeting certain covenants
• Highest overall ratings for a stand-alone PFC financing to date ("A2" from Moody's, "A" from S&P, and "A" from Fitch)--also, first stand-alone PFC financing to be rated by Moody's
• Strong Port covenants and legal provisions in the Bond Resolution
• New and improved language in the FAA record of decision regarding an informal resolution process and PFC termination waiver provisions

Client
Port of Seattle

Services
-Financial Planning and Advisory
-Financial Feasibility and Reporting
-Forecasting and Economics