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Tucson Airport Authority's Learjet Facility Bonds Rated 'AA/F1+' by Fitch IBCA

Strategic Insights

— 1 min read

The Tucson Airport Authority, Inc.'s special facility revenue bonds (Learjet, Inc.) have been rated highly by Fitch IBCA, reflecting the strong support provided by NationsBank, N.A. in the form of a transferable, irrevocable direct-pay letter of credit (LOC). This LOC guarantees payment of principal, interest, and purchase price, securing the bonds until their maturity date on October 1, 2028. The rating also considers the LOC's expiration date of October 15, 2001, and the potential for termination or defeasance of the bonds.

Key Takeaways:

  • The rating for the series A & B bonds is based on the 100% support of NationsBank, N.A. in the form of a transferable, irrevocable direct-pay letter of credit (LOC).
  • The LOC provides full coverage of principal and interest payments due on the bonds, as well as purchase price.
  • The interest rate for the bonds is computed at a maximum rate of 15% based on a year of 365 days for a period of 35 days.
  • The underwriter and remarketing agent for the bonds is NationsBank, N.A.
  • The sale is scheduled for November 5, 1998.
  • The bonds initially bear interest at the weekly interest rate, but may be converted to a different variable rate or to a fixed interest rate.
  • Bondholders have the option to tender their bonds, provided the remarketing agent is given seven days' notice of the purchase.
  • The bonds are subject to mandatory tender upon conversion of the interest rate and upon substitution of the LOC, as well as upon other events, as specified in the trust indenture.
  • Optional and mandatory redemption provisions also apply to the bonds.
  • Proceeds of the bonds will be used by the borrower to finance a special facility consisting of an aircraft finishing and maintenance facility and support facilities located at the Tucson International Airport in Pima County, AZ.

Statistics:

  • $3,300,000 special facility revenue bonds (Learjet, Inc.) (series 1998A)
  • $7,700,000 special facility revenue bonds (Learjet, Inc.) (taxable series 1998B)
  • 100% support of NationsBank, N.A. provided by the LOC
  • Expiration date of the LOC: October 15, 2001
  • Maturity date of the bonds: October 1, 2028
  • Maximum interest rate: 15%
  • 365 days in a year for interest rate computation
  • 35 days period for interest rate computation

Sources:

  • Fitch IBCA - NEW YORK, Nov. 4 /PRNewswire/ --

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