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Refunding Transaction Yields Positive Savings
for Houston Airports

April 2, 2012

© Houston Airport System
Major infrastructure improvements can be found at both commercial airports in Houston.
Houston Airports and the City of Houston recently completed a refunding transaction of subordinate lien general airport revenue bonds.

The transaction is expected to close on April 5, 2012. 

The refunding transaction reduced future debt service payments by $55.6 million on a net present value basis.

In connection with rating the transaction, Standard and Poor’s affirmed the Airport System’s subordinate lien rating at A and the Airport System’s senior lien rating at AA-.

As part of its review, Fitch Ratings affirmed its 'A+' subordinate lien rating but reduced the ratings outlook on the subordinate lien to negative from stable.

Fitch does not currently rate the Airport System’s senior lien debt requirements. In assigning the ratings, both Fitch and Standard and Poors highlighted Houston's broad economic base which supports more than 24 million annual enplanements and a strong demand for air carrier service at both George Bush Intercontinental Airport (IAH) and William P. Hobby Airports (HOU).

Both rating agencies also highlighted the Airport System’s strong cash position but cautioned that declining debt service coverage levels and a capital spending program which requires more borrowing could trigger additional ratings actions.

“Both commercial airports in Houston are poised for growth and success as we move forward,” says Kirk Rummel, Houston Airports' chief financial officer. “Passenger totals and revenue streams are currently at strong levels, and the future looks incredibly promising as new opportunities continue to unfold.”  
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