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HOUSTON AIRPORT $100 MILLION SENIOR LIEN COMMERCIAL PAPER RATED 'F-1+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 15 /PRNewswire/ -- The City of Houston's $100 million airport system senior lien commercial paper notes, series A (AMT) and series B (Non-AMT) are rated "F-1+" by Fitch. The commercial paper notes are secured on parity with the airport system's $82 million outstanding 'A' senior lien revenue bonds, which are affirmed. The airport system's $289 million outstanding "A" junior lien revenue bonds are also affirmed.
 This is the first time that the city of Houston has authorized the issuance of commercial paper for airport purposes. The notes will have a maturity of no more than 270 days. BankAmerica National Trust Co. will act as the issuing and paying agent. Merrill Lynch, Pierce, Fenner & Smith Inc. and Apex Securities, Inc. will act collectively as the dealer.
 The "F-1+" rating is based on the strength of the liquidity protection lent to the commercial paper notes by the attendant credit agreement. A several (not joint) credit agreement with Morgan Guaranty Trust Co. of New York (60 percent) and Canadian Imperial Bank of Commerce (40 percent), in the amount of $100 million plus accrued interest for 270 days at 12 percent, will provide liquidity for the commercial paper notes. The credit agreement terminates Oct. 1, 1995, but may be extended by the city each year for an additional year. Upon an event of default under the credit agreement, the banks may terminate any unused commitment amount, accelerate any amounts due, and provide a non-issuance notice to the city and the issuing and paying agent. Events of default include the failure to pay amounts due under the agreement or the commitment fees, covenant default, cross default on any airport system debt, city bankruptcy, and fraud. However, the liquidity will not be terminated for those notes outstanding at the time of the no-issuance notice and likewise, the no-issuance notice will not pertain to notes issued to refund, renew, and refinance such previously outstanding notes.
 Additional rating considerations include the airport's proven track record of long-term market access and the "A" quality of the airport system's senior lien revenue stream. Houston's airport system is comprised primarily of Intercontinental Airport (71 percent total enplanements) and Hobby Airport (29 percent total enplanements). Enplanement trends at these airports grew in each of the past 10 years, except 1988. More recently, enplanements increased from 13.1 million in 1991 to 14.3 million in 1993 or an average annual increase of 4.5 percent. Service continues to be dominated by Continental Airlines at Intercontinental (80 percent) and Southwest Airlines (72 percent) at Hobby. However, the system's financial operations continue to be solid, with debt service coverage dropping below 2.00x for the first time in five years to 1.80x in 1993.
 -0- 10/15/83
 /CONTACT: Andrea R. Bozzo of Fitch, 212-908- 0515/


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Publication:PR Newswire
Date:Oct 15, 1993
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