HOUSTON – Bracewell LLP recently served as bond counsel in three transactions totaling over $1.363 billion for the Houston Airport System, the department of the City of Houston that manages Bush, Hobby and Ellington airports. Several pandemic-related issues added a layer of complication to each transaction, including banking procedure logistics and enplanements falling to unprecedented levels.
The first transaction, which began in January 2020 and closed April 1, 2020, was an increase of the Houston Airport System’s Senior Lien Commercial Paper Notes from $150 million to $350 million and a commensurate increase in the related direct-pay letter of credit. While this transaction is typically a standard financing, banking procedure logistics were a significant challenge during the COVID-19 quarantines in Texas and New York.
The second transaction, which began in May 2020 and closed June 29, 2020, was a refinancing of approximately $150 million of Special Facility Bonds issued by the City on behalf of United Airlines, Inc. in a transaction led by Citigroup. The transaction presented challenging disclosure issues, as United’s scheduled capacity for April and May 2020 were reduced by approximately 88 percent from 2019 levels.
The third transaction was an $863.675 million refunding of Houston Airport System Subordinate Lien debt that closed on October 20, 2020. This transaction was led by Morgan Stanley and achieved over $94 million in net present value savings for Houston Airport System, with most of the savings concentrated over the next two fiscal years.
Bracewell lawyers involved in these transactions included:
Partners: Barron F. Wallace, Victoria N. Ozimek and Brian P. Teaff
Senior Counsel: Edward Fierro
Counsel: Peggy B. Christman
Of Counsel: Paul S. Maco and Lance W. Behnke
Associate: Sarah Tahir