Rating Action: Moody & # 39; s Confirms P-1 LOC-Backed Los Angeles Airports Division LAX Subordinate Revenue CP Notes
New York, September 1, 2020 – Moody & # 39; s Investors Service ("Moody & # 39; s") has received the P-1 credit letter for the Los Angeles, CA Department of Airports (the Department) of Los Angeles International Airport Angeles Confirms Subordinated Income Commercial Paper Notes Subsections A-1 through A-3 (non-AMT), Subsections B-1 through B-3 (AMT), Subsections C-1 through C-3 (taxable) and Subsections D-1 through D- 3 (together the notes). The A-1, B-1, C-1 and D-1 Notes are backed by a Letter of Credit (LOC) from Sumitomo Mitsui Banking Corporation (SMBC). The A-2, B-2, C-2 and D-2 Notes sub-series are supported by a LOC provided by Barclays Bank PLC (Barclays). Sub-series Notes A-3, B-3, C-3 and D-3 are issued by a bank of America, N.A. (BofA) provided LOC which is the current LOC of Wells Fargo Bank, N.A.
After the effective date of the replacement and amendments to the refund agreements and LOCs currently scheduled for September 9, 2020, ratings will be based on the bonds on the LOCs. the structure and legal protection of transactions that provide for timely payment of principal and interest to holders of bonds; and Moody & # 39; s rating of the credit quality of each LOC bank. Moody's short-term counterparty risk rating (CR assessment) of each LOC bank is P-1 (cr).
The Trust Indenture approves a total of up to $ 500 million of all sub-series of bonds. In addition, the total amount of any outstanding sub-series of Notes cannot exceed the total amount available under the applicable LOC. The Trustee is prohibited from issuing subsections of Notes if such an issue would cause the aggregate nominal amount of such outstanding subsections of Notes, plus accrued interest, to exceed the amount provided for in the applicable LOC. All Notes issued have a maturity of no more than 270 days from the date of issue and the Business Day prior to the relevant LOC expiration date. The trustee will cease issuing the relevant subseries of notes after receiving notification from the responsible LOC bank that the trustee should cease issuing bonds.
The Trustee will use each LOC under its terms on each maturity date of the Notes to pay the principal and interest on the Notes maturing. The Notes are not subject to any repayment or acceleration prior to maturity.
Each LOC is sufficiently sized to cover the principal plus 270 interest days at 12% of the maximum rate applicable to all bonds. The LOCs provided by SMBC, Barclays, and BofA are sized to cover principal of $ 200,000,000, $ 210,000,000, and $ 90,000,000, plus interest.
Each LOC ends no earlier than: (i) the specified expiration date; (ii) the date on which a subscription was paid for, which, when added to all other subscriptions, equals the declared amount of the LOC; (iii) the date a replacement LOC was issued, if a subscription was made on or before a The date has been complied with, (iv) the date on which the relevant bank receives notice from the Trustee that no Notes supported by such LOC are outstanding and the Department does not intend to issue such additional Notes and wishes that LOC terminate on (v) the earlier of (a) the fifteenth (15th) calendar day following the date the Trustee receives a Tier One Final Drawing Notice from a LOC bank and (b) the date which the drawing is made in connection with the Trustee's receipt, that final Tier 1 final subscription will be considered, and (vi) the earlier of (a) the Tier 2 termination date and (b) the new Tier 2 termination Termination Date, provided in both cases the subscription for Notes becomes due with such termination Date has been honored.
The department may provide a replacement LOC provided that the applicable outstanding debt securities supported by that LOC are due on or before the effective date of the replacement letter of credit.
The main method used in these ratings was rating transactions based on the Credit Substitution Approach: Writing of Secured, Insured and Guaranteed Debt, published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid= PBC_1068154. Alternatively, a copy of this method can be found on the Evaluation Methods page at www.moodys.com.
For more information on the key rating assumptions and Moody's sensitivity analysis, please refer to the Methodological Assumptions and Sensitivity to Assumptions sections of the disclosure form. Moody & # 39; s evaluation symbols and definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category / class of debt or security, this announcement contains certain regulatory information in relation to any rating of a subsequently issued bond or note of the same series, category / class of debt, security or security according to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued by a support provider, this announcement contains certain regulatory information in relation to the creditworthiness measure of the support provider and in relation to each individual rating action for securities whose creditworthiness is derived from the creditworthiness of the support provider . For preliminary ratings, this announcement contains certain regulatory information relating to the assigned preliminary rating and a final rating that may be issued after the final debt issuance, in any event where the transaction structure and terms have not changed prior to assigning the final rating in a way that would have affected the rating. For more information, see the Ratings tab on the issuer / company page of the relevant issuer at www.moodys.com.
For all affected securities or rated companies that receive direct credit support from the primary companies of this rating measure and whose ratings may change as a result of this rating measure, the associated regulatory information is that of the guarantor. Exceptions to this approach exist for the following disclosures, if applicable for the jurisdiction: ancillary services, disclosure to a rated company, disclosure to a rated company.
The ratings were disclosed to the rated company or its designated representatives and issued without any change based on this disclosure.
These evaluations are solicited. For more information, see Moody's Guidelines for Setting and Assigning Unwanted Credit Ratings on www.moodys.com.
The regulatory information contained in this press release applies to the creditworthiness and, if applicable, the associated rating outlook or rating review.
Moody's general principles for assessing environmental, social and governance (ESG) risk in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
The Global Scale Credit Rating for this creditworthiness declaration was issued by one of the Moody & # 39; s subsidiaries outside the EU and issued by Moody & # 39; s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art. 4 Paragraph 3 of Regulation (EC) No. 1060/2009 on rating agencies. For more information on EU endorsement status and the Moody & # 39; s office that issued the credit rating, please visit www.moodys.com
Please visit www.moodys.com for information on changes to the Lead Rating Analyst and Moody & # 39; s legal entity that issued the rating.
Additional regulatory information on each rating can be found on the Ratings tab on the Issuer / Company page at www.moodys.com.
Jacek Stolarz Asst Vice President – Analyst Public Finance Group Moody & # 39; s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 USA JOURNALISTS: 1 212 553 0376 Customer Service: 1 212 553 1653 Joann Hempel VP – Senior Credit Officer Public Finance Group JOURNALISTS: 1 212 553 0376 Customer Service: 1 212 553 1653 Publications Office: Moody & # 39; s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 USA JOURNALISTS: 1 212 553 0376 Customer Service: 1 212 553 1653
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