$100 million of debt affected. Letter of credit provided by U.S. Bank National Association
New York, April 30, 2013 -- Moody's Investors Service has affirmed the Aa1 long-term rating
and VMIG 1 short-term rating of the Airport Commission of the City
and County of San Francisco International Airport Second Series Variable
Rate Revenue Refunding Bonds, Issue 36A (the Bonds) in conjunction
with the substitution of the current letter of credit supporting the Bonds
with a new irrevocable direct-pay letter of credit (LOC) issued
by U.S. Bank National Association (the Bank). The
new LOC will replace a letter of credit issued by Wells Fargo Bank,
N.A.
RATINGS RATIONALE
Upon the substitution of the LOC, currently scheduled for April
30, 2013, the long-term rating will continue to be
based on the joint default analysis (JDA) and will reflect Moody's approach
to rating jointly supported transactions. The JDA rating is based
upon the long-term rating of the U.S. Bank National
Association as provider of the letter of credit; the rating of the
Airport Commission of the City and County of San Francisco (the Commission);
and the structure and legal protections of the transaction which provide
for timely debt service payments to investors. The timely payment
of purchase price is reflected in the short-term rating of the
Bonds. The short term rating is based on the short term rating
of the Bank. Moody's currently rates U.S. Bank National
Association's, long-term other senior obligations (OSO)
Aa3 and its short-term OSO P-1. Moody's currently
maintains an A1 underlying rating on the Bonds.
Since a loss to investors would occur only if the Bank providing the letter
of credit and the Commission were to default in payment, Moody's
has assigned the long-term portion of the rating based upon the
joint probability of default by both parties. In determining the
joint probability of default, Moody's considers the level of default
dependence between the Bank and the underlying obligation. In this
case, Moody's has determined that there is a low level of default
dependence between the Bank and the Commission resulting in a joint probability
of default consistent with a JDA rating of Aa1.
WHAT COULD CHANGE THE RATING-UP
Long-Term: The long-term rating on the Bonds could
be upgraded if Moody's were to upgrade either the Bank's long-term
OSO rating or the underlying rating of the Bonds.
Short-Term: Not applicable
WHAT COULD CHANGE THE RATING-DOWN
Long-Term: The long-term rating on the Bonds could
be downgraded if Moody's were to downgrade either the Bank's long-term
OSO rating or the underlying rating of the Bonds or if there were to be
an increase in Moody's assessment of the level of default dependence between
the Bank and the Commission.
Short-Term: The short-term rating on the Bonds would
be downgraded if Moody's were to downgrade the Bank's short-term
OSO rating.
RATINGS RATIONALE
The principal methodology used in this rating was Rating Transactions
Based on the Credit Substitution Approach: Letter of Credit-backed,
Insured and Guaranteed Debts published in March 2013. Please see
the Credit Policy page on www.moodys.com for a copy of this
methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Jacek Stolarz
Analyst
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Michael J Loughlin
Vice President - Senior Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's affirms Aa1 and VMIG 1 letter of credit-backed ratings of the Airport Commission of the City and County of San Francisco International Airport Second Series Variable Rate Revenue Refunding Bonds, Issue 36A
