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Rating Action:

Moody's assigns P-1 to City of Philadelphia Airport Revenue Commercial Paper Notes Series A, B and C

09 Aug 2019

New York, August 09, 2019 -- Moody's Investors Service has assigned P-1 ratings to the following City of Philadelphia (the City) Airport Revenue Commercial Paper Notes (collectively the Notes):

• Series A, Subseries A-1, A-2 and A-3 (Tax-Exempt Non-AMT)

• Series B, Subseries B-1, B-2 and B-3 (Tax-Exempt AMT)

• Series C, Subseries C-1, C-2 and C-3 (Federally Taxable)

The Subseries A-1, B-1 and C-1 Notes are supported by a letter of credit (LOC) from TD Bank, N.A. The Subseries A-2, B-2 and C-2 Notes are supported by a LOC from Citibank, N.A. The Subseries A-3, B-3 and C-3 Notes are supported by a LOC from Wells Fargo Bank, N.A.

RATINGS RATIONALE

The ratings on the Notes are based upon (i) the LOCs provided by TD Bank, N.A., Citibank, N.A. and Wells Fargo Bank, N.A. (collectively, the Banks), (ii) the structure and legal protections of the transactions, which provide for timely payment of principal and interest to noteholders, and (iii) Moody's evaluation of the credit quality of the Banks issuing the LOCs.

Moody's current short-term Counterparty Risk (CR) Assessment for each of the Banks are P-1(cr).

FACTORS THAT COULD LEAD TO AN UPGRADE

» Not applicable

FACTORS THAT COULD LEAD TO A DOWNGRADE

» Moody's downgrades the short-term CR Assessment of the applicable Bank.

COMMERCIAL PAPER NOTES

The Seventeenth Supplemental Bond Ordinance authorizes the City to issue of up to $350 million of Series A, B and C Notes, provided that such issuance may not result in the aggregate principal amount of Notes (including face amount at maturity with respect to taxable Notes) outstanding at maturity plus accrued interest to exceed the amounts provided for under the LOCs. The tax-exempt Notes shall be issued on an interest-bearing basis. The taxable Notes may be issued on either an interest-bearing basis or on a discounted basis. The Issuing and Paying Agent (IPA), U.S. Bank National Association, will issue Notes upon receipt of issuance instructions from the City. Each Note issued shall mature not later than 270 days from the date of issuance and no later than the business day prior to the stated expiration date of the applicable LOC. Additionally, no Subseries of Notes may be issued if such issuance would cause the aggregate principal amount (including face amount at maturity) plus interest accrued thereon of such Subseries outstanding to exceed the amount provided for under the applicable LOC.

The IPA shall draw on the applicable LOC in accordance with its terms in order to make timely payment of the applicable Subseries of Notes at maturity. Funds in the applicable Note Account comprised of funds from the proceeds of rollover Notes, and airport revenues received from the City, will be used to reimburse the Bank or to pay the principal and interest on the maturing Notes in the event the Bank has not paid.

Each LOC is sufficiently sized to cover the maximum principal of applicable Subseries of Notes. The TD Bank, N.A. LOC is sized for $184.3 million plus 270 days of interest at 12% (the maximum rate on the Notes). The Citibank, N.A. LOC is sized for $115.7 million plus 270 days of interest at 12% (the maximum rate on the Notes). The Wells Fargo Bank, N.A. LOC is sized for $50 million plus 270 days of interest at 12% (the maximum rate on the Notes). Conforming draws for the payment of principal and interest received by the applicable Bank by 10:30 a.m. (New York time) on a business day will be honored by such Bank by 1:30 p.m. (New York time) on the same business day.

Upon the occurrence of an event of default under the reimbursement agreement, each Bank may, at its option, send either a no-issuance notice or a final drawing notice to the IPA. Upon receipt of the final drawing notice the IPA will cease issuing the affected Subseries of Notes and shall draw on the applicable LOC, no later than the business day prior to the termination date of the LOC, in an amount sufficient to provide for the payment of principal plus interest to accrue to the maturity of all of the affected Subseries of Notes. The IPA shall hold such LOC funds to pay the affected series of Notes as they mature. Upon receipt of a no-issuance notice, the IPA shall cease issuing the affected Subseries of Notes and continue to draw on the applicable LOC as such Notes mature. Following the no-issuance notice, the LOC will remain in place to the final maturity of all of the affected Notes outstanding.

Each LOC will terminate upon the earliest to occur of: (i) August 22, 2022 (for Citibank, N.A. and Wells Fargo Bank, N.A.) or August 22, 2024 (for TD Bank, N.A.), the stated expiration date of the LOCs; (ii) the date on which a respective Bank receives a notice from IPA that a substitute credit facility has been issued; (iii) the date on which the applicable Bank receives a notice from IPA that no Notes of the applicable Subseries remain outstanding; (iv) upon payment of a drawing, not subject to reinstatement, which when added to all other drawings honored by the LOC not subject to reinstatement equals the stated amount of the LOC; or (v) the earlier of (a) the 15th calendar day after the date on which the IPA receives the Final Drawing Notice from the applicable Bank, and (b) the date on which the drawing resulting from the delivery of the Final Drawing Notice is honored by the respective Bank.

The City may substitute each LOC provided that all outstanding Notes of the applicable Subseries must mature on or prior to the effective date of the substitute credit facility and the IPA shall have received a written notice from each rating agency then rating the Notes that the substitution will not result in a reduction or withdrawal of the then current ratings on the Notes.

The principal methodology used in these ratings was Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts published in May 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security 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 credit rating action on the support provider and in relation to each particular credit 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 credit rating action, and whose ratings may change as a result of this credit 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.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

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.

Michael J. Loughlin
Vice President - Senior Analyst
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Jacek Stolarz
Asst Vice President - Analyst
Public Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
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