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Denver International Airport PDF Print E-mail
Co-Financial Advisor: Estrada Hinojosa

Overview:
Estrada Hinojosa has served the City and County of Denver, on behalf of its Department of Aviation (Denver International Airport or DIA), as co-Financial Advisory since 2004. The firm has assisted DIA with 28 series or subseries of bond issuances for a total par value of approximately $2.84 billion. Prior to serving as co-Financial Advisor, the firm served Denver as an underwriter on 13 transactions with a total par value of approximately $3 billion.

Challenge:
2008 was an extremely volatile year in the capital markets. At the beginning of 2008, DIA had over $1.3 billion of variable rate debt outstanding in the form of auction rate securities (ARS) and variable rate demand bonds (VRDBs). Due to problems related to the subprime mortgage crisis followed by the subsequent overall credit crunch, DIA’s variable rate debt was not trading favorably to DIA. Most of the ARS were experiencing failed auctions and many of the VRDBs became bank bonds during the year. Estrada Hinojosa assisted DIA with restructuring this debt as a combination of fixed rate bonds, put bonds and VRDBs backed by new credit facilities.

Results:
  • The $608.6 million 2008A1-A4 bonds were structured as a combination of put and fixed rate bonds. The remaining obligations were sold uninsured
  • The $81.8 million 2008B bonds were sold as VRDBs with a new credit facility (LOC) from Wachovia Bank
  • The $92.4 million 2008C1 bonds were sold as VRDBs with a new LOC from KBC Bank while the $200 million 2008C2-C3 bonds were sold as VRDBs with an LOC from LBBW. The 2008C1-C3 bonds were successfully placed with investors at attractive rates
  • $100 million of DIA’s ARS were also refunded using DIA’s commercial paper (CP) program. The CP was later refunded by the $104.7 million Series 2009C VRDBs which were issued earlier this year along with the $170.19 million Series 2009A and $65.29 million taxable Series 2009B Build America Bonds (BABs) which were issued as fixed rate bonds to finance new projects

How We Did It and What It Means To You:
This is just one of many examples of how Estrada Hinojosa has overcome challenges to assist clients in creating success stories. For the details on how we achieved these results and other case studies, contact us.

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