City of Phoenix Civic Improvement Corporation Junior Lien Airport Revenue Junior Lien Airport Revenue Bonds, Series 2015A Refunding Bonds, Series 2015B (Non ‐ AMT) (Non ‐ AMT) $98,545,000* $19,350,000* Investor Presentation November 2015 * Preliminary, Subject to Change.
Disclaimer This electronic Investor Presentation you are about to view is provided as of November 4, 2015 for a proposed offering by the City of Phoenix Civic Improvement Corporation (the “Corporation”) of its Junior Lien Airport Revenue Bonds, Series 2015A and Junior Lien Airport Revenue Refunding Bonds, Series 2015B (“the Bonds”). If you are viewing this presentation after November 4, 2015, there may have been events that occurred subsequent to such date that would have a material adverse effect on the financial information that is presented herein, and none of the Corporation, the City of Phoenix, or Citigroup as Representative of the Underwriters (the “Underwriters”), has undertaken any obligation to update this electronic presentation. All market prices, financial presentation prices, data and other information provided herein are not warranted as to completeness or accuracy and are subject to change without notice. This Investor Presentation is provided for your information and convenience only. Any investment decisions regarding the Bonds should only be made after a careful review of the complete Preliminary Official Statement. By accessing this presentation, you agree not to duplicate, copy, download, screen capture, electronically store or record this Investor Presentation, nor to produce, publish or distribute this Investor Presentation in any form whatsoever. This Investor Presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument, including the Bonds, or to adopt any investment strategy. Any offer or solicitation with respect to the Bonds will be made solely by means of the Preliminary Official Statement and Official Statement, which describe the actual terms of such Bonds. In no event shall the Underwriters or the City be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction mentioned herein. Neither the City nor the Underwriters make any representations as to the legal, tax, credit or accounting treatment of any transactions mentioned herein, or any other effects such transactions may have on you and your affiliates or any other parties to such transactions and their respective affiliates. You should consult with your own advisors as to such matters and the consequences of the purchase and ownership of the Bonds. Nothing in these materials constitutes a commitment by the City, Underwriters or any of their affiliates to enter into any transaction. No assurance can be given that any transaction mentioned herein could in fact be executed. Past performance is not indicative of future returns, which will vary. Transactions involving the Bonds may not be suitable for all investors. You should consult with your own advisors as to the suitability of the Bonds for your particular circumstances. Clients should contact their salesperson at, and execute transactions through, an entity of the Underwriters or other syndicate member entity qualified in their home jurisdiction unless governing law permits otherwise. 2
Presentation Participants City of Phoenix Denise Olson, Acting Chief Financial Officer Jim Bennett, Aviation Director Jay DeWitt, Deputy Aviation Director Senior Manager: Citigroup Neal Attermann, Director 3
Financing Summary • $98,545,000* Junior Lien Airport Revenue Bonds, Series 2015A (Non ‐ AMT) • $19,350,000* Junior Lien Airport Revenue Refunding Bonds, Series 2015B (Non ‐ AMT) To refund outstanding Series 2014A ‐ 1 and Series 2014A ‐ 2 Commercial Paper used to Finance the Sky Train, to refund the 2034 maturity of the Series 2010A Bonds for present Purpose value savings, to make a deposit to the Junior Lien Parity Reserve Fund and the Series 2015B Junior Lien Bond Reserve Fund, and to pay the costs of issuance 2015A: July 1, 2016 – July 1, 2045 Structure* 2015B: July 1, 2034 Tax Status Tax ‐ Exempt (Non ‐ AMT) Optional Redemption To Be Determined Secured by Designated Revenues subordinate to amounts owed with respect to any Senior Lien Obligations; additional security provided by an irrevocable commitment of the Security net proceeds of a passenger facility charge received in each Fiscal Year in an amount equal to 30% of Series 2015A Junior Bonds debt service and 100% of the Series 2015B Junior Bonds debt service in each Fiscal Year due on or before July 1, 2021 Pricing Date* November 17, 2015 Delivery Date* December 15, 2015 Confirmed Ratings Moody’s: A1 (Stable); Standard & Poor’s: A+ (Stable) Senior Manager Citigroup Co ‐ Managers Barclays, Mesirow Financial Inc., Cabrera Capital Markets LLC, Raymond James 4 *Preliminary, subject to change; when, as, and if issued.
Cohesive Management Structure The City of Phoenix owns and operates Phoenix Sky Harbor International • Airport and two general aviation airports, Phoenix ‐ Goodyear Airport and Phoenix ‐ Deer Valley Airport (the “Airport”) The Airport is operated as a self ‐ supporting enterprise through the • Aviation Department The Phoenix City Council adopts ordinances establishing rates and charges • to be paid by tenants and users of the Airports The City Manager, appointed by the City Council, is responsible for all City • Departments, including the Aviation Department The City’s Finance Department oversees the issuance of debt for the • Aviation Department and performs certain accounting, financing, treasury and related functions for the Airport Management continues to refine and monitor its plan of finance for the Airport to maintain stable Aa3/AA ‐ Senior Lien and A1/A+ Junior Lien Ratings 5
The Airport Serves a Vibrant Urban Area Employment 2000 2007 2014 Phoenix is the 6 th most • 132,019 137,936 139,042 Jobs (‘000s) U.S. populous City in the U.S. 0.6% 0.1% 0.4% CAGR Since 1990, the population 2,243 2,679 2,568 Jobs (‘000s) Arizona 2.6% ‐ 0.6% 1.0% has grown by 55% CAGR 1,578 1,918 1,853 Jobs (‘000s) Biotech, healthcare and higher MSA • 2.8% ‐ 0.5% 1.2% CAGR education are key growth sectors for jobs and Unemployment investments 12% Top tier convention and 10% • tourism destination 8% MSA’s employment growth • 6% exceeds State and Nation 4% MSA’s unemployment rate • remains below State and 2% USA ARIZONA MSA Nation 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 6
The Employment Base in Phoenix is Large and Diverse #1 in the Nation for Entrepreneurial Activity, 2012 (Kauffman Foundation) #5 Fastest Growing Tech Market, 2014 (Fortune Magazine) Major Employers in Phoenix Banner Health – Health Care • Apollo Group – Education • Honeywell – Technology • Intel – Technology • American Express – Financial • Dignity Healthcare – Health Care • American Airlines – Airline • Wells Fargo – Financial • Charles Schwab – Financial • Mayo Clinic – Health Care • Freeport McMoRan – Mining • 7 Source: Phoenix Business Journal, 2014 ‐ 15 Book of Lists.
The Airport’s Key Credit Strengths The Airport has a virtual monopoly position in a strong diversified MSA – • approximately 60% of traffic is origin and destination PHX Sky Harbor is an important airport for two major carriers: American • and Southwest Traffic at the Airport is growing by 5.0% thus far in CY 2015 (January • through August) The Airport continues providing strong financial performance and • management is committed to maintaining exemplary financial metrics The Airport is run by an experienced, collaborative Aviation and City • Finance management team Series A fixes out Commercial Paper used to finance a portion of the Sky • Train and Series B refunds for savings the 2034 maturity of the Series 2010A Bonds The future plan of finance for the overall CIP, including the primary project • Terminal 3 (T3), is demand ‐ driven, affordable and modular 8
The Airport is of Unique Importance to the Phoenix MSA Geographic location of Phoenix results in a high reliance on airline travel • Tucson – a small hub located 110 miles to the southeast • Phoenix ‐ Mesa Gateway Airport – located 30 miles southeast with only 11 average daily • departures Road miles from the Airport to: Las Vegas 292 Los Angeles 371 Albuquerque 477 Salt Lake City 656 Denver 809 Dallas / Fort Worth 1,056 9
Overview of PHX Sky Harbor Airport Three terminals – 84 gates in Terminal 4, • 111 gates overall Three parallel runways: • 8/26 – 11,490 feet o 7L/25R – 10,300 feet o 7R/25C – 7,800 feet o Sky Train connects regional light rail • system to the Airport’s largest parking areas and Terminals 3 & 4, with a walkway to Terminal 2 26,300 public parking spaces • Consolidated Rental Car Facility near the • Airport 10
The Airport Provides Non ‐ Stop Service to 92 Destinations Domestic Destinations International Destinations 16 airlines provide scheduled non ‐ stop service to 78 domestic destinations • Five airlines provide scheduled non ‐ stop service to 14 international destinations • 11 Sources: City of Phoenix & LeighFisher
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