HomeMy WebLinkAboutIR 7958 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7958
To the Mayor and Members of the City Council November 7, 1995
Subject:
Ian D/FW AIRPORT FACILITY IMPROVEMENT CORPORATION -
AMERICAN AIRLINES, INC. REVENUE BONDS, SERIES 1995
BACKGROUND
The D/FW Airport Facility Improvement Corporation(FIC)is a non-profit airport facilities financing corporation
and is authorized to act on behalf of the Cities of Dallas and Fort Worth for the specific public purposes
authorized by the Cities. The FIC is authorized by the Municipal Airports Act, Article 46d, Vernon's Annotated
Texas Statutes, as amended. The FIC has issued bonds for the purpose of providing tax-exempt special project
financing for various expansion and improvement projects at the Dallas/Fort Worth International Airport. The
debt service on any such financings shall be paid by the user,in this instance, American Airlines, Inc. Any bonds
issued by the FIC and all related agreements are subject to the approval of: (i) the D/FW Airport Board, (ii) the
City Council of Dallas and (iii) the City Council of Fort Worth. There is no liability associated with the bonds for
the Airport or the Cities.
American Airlines, Inc. has requested the ability to refinance two series of bonds issued in 1985. The bonds are
described in detail below. The refinancing will be completed to take advantage of lower interest rates currently
available in the market.
DISCUSSION
Currently outstanding are$97,300,000 Grapevine Industrial Development Corporation Airport Facilities Revenue
Bonds,Series 1985 and$31,135,000 Lone Star Airport Improvement Authority,Inc.Airport Facilities Bonds,Series
1985. Current market conditions permit the refinancing of these outstanding bonds at lower interest rates,
providing economic benefits to American Airlines. Additionally, the refinancing will allow any existing funds to
be applied against debt service.
The bonds will be issued by the Dallas/Fort Worth International Airport Board Facility Improvement
Corporation in a principal amount not to exceed $128,435,000, interest rates not to exceed 9.25% and for a
maturity not to exceed 30 years. The structure of the bond issue has yet to be determined. The debt service on the
bonds will be payable solely by American Airlines,Inc. and will be secured by a pledge of payments to be made
pursuant to a Facilities Agreement between the FIC and American Airlines, Inc.. As Underwriters, American
Airlines, Inc. has selected the existing underwriting team for the Airport: Bear, Stearns & Co., Inc., Estrada
Hinojosa&Company,Inc.,Grigsby Brandford&Co.,Inc.,Merrill Lynch &Co.,Pryor,McClendon,Counts &Co.,
Inc.,and Smith Barney,Inc.
The FIC Board will request the Airport Board to approve the issuance of the Bonds on November 2, 1995,and will
request that the Cities of Fort Worth and Dallas to adopt concurrent Resolutions on November 7, 1995 and
November 8, 1995, respectively. The Resolution will approve the issuance and sale of FIC bonds to refinance the
outstanding bonds specifically identified above in a principal amount not to exceed$128,435,000 at interest rates
not to exceed 9.25%and with a maturity not to exceed 30 years.
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Bob Terrell OFFICIAL RECOR
City Manager
FL WORTHY TEX,
ISSUED BY THE CITY MANAGER FORT WORTH,TEXAS