Fitch Ratings has assigned BB-/RR4 ratings to a series of special facility revenue bonds to be issued by the city of Houston and guaranteed by United Airlines Holdings.
The city intends to issue three series of airport special facility revenue bonds to refinance existing bonds that begin maturing on July 1, 2020, with United unconditionally guaranteeing the payment of the bonds.
The bonds do not constitute indebtedness to the city of Houston or the airport and neither are liable for any payments. The bonds are secured by a pledge of certain revenues, consisting primarily of net rentals to be paid by United pursuant to a lease between Houston and United.
The series 2020-A bonds will refinance the existing Series 2014 Bonds, which were originally issued to refinance Series 2001 Bonds. The Series 2001 bonds were originally issued to finance a portion of the cost of the construction, improvement, and equipping of an international passenger terminal (Terminal E) and related airport facilities for use by United (formerly Continental Airlines) at George H. Bush International Airport/Houston.
All of the Terminal E project is owned by the city and has been leased by the city to United. Under the terms of the lease, United has the exclusive use of Terminal E (23 gates) and of other components of the Terminal E project.
The 2020B-2 bonds will refinance the existing Series 2015B-2 Bonds, which were originally issued to refinance the existing Series 1997B Bonds and the Series 1998B Bonds. The Series 97/98B Bonds were issued to finance a portion of the cost of the acquisition, construction, improvement, and equipping of certain terminal facilities in Terminal B, Terminal C and elsewhere at the airport for use by United.
The 2020 C bonds will refinance the existing Series 2015C Bonds and will be secured in parity with the Series 2018C Bonds. The Series 2015C Bonds were originally issued to provide a portion of the funds for the redemption of United's Series 1997C and Series 1998C Bonds.
The 1997/1998C Bonds were originally issued to finance the improvement, construction and installation of certain facilities each to support the operations of United at the Airport including an aircraft hangar, a maintenance and parts storage facility, a mail sorting facility, flight simulator and in-flight training facilities and certain improvements to hangar facilities.