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Convertible Lien Bonds for Airport Expansion Program  

Author:  Phillip C. Allen.

Source: Volume 20, Number 02, Summer 1999 , pp.109-112(4)

Municipal Finance Journal

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The Director of Finance and Administrative Services Department, Broward County, Florida describes how the county financed its Airport Expansion Program (AEP) through a plan that utilizes a variety of funding sources, including airport system revenues, passenger facility charge (PFC) revenues, state and federal grants, and airport system revenue bonds. PFC revenues are being used both as a source of pay-as-you-go funding and as the sole pledged revenue for a series of bonds. The bonds secured with PFC revenues were issued as convertible lien bonds. These will be secured solely with PFC revenues until their scheduled conversion in 2012 (the conversion is not dependent upon any outside triggering event). After 2012, the underlying security for the convertible lien bonds will convert from PFC revenues to airport system revenues, and the bonds will be treated as parity debt of the county airport enterprise through their final maturity in 2023.

Keywords: Bond maturities; airline lease expirations; bond resolution

Affiliations:  1: Broward County, Florida.

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