Featured Municipal Bond in the Market, Week of 03/20/2017: City of San Jose Airport Revenue Refunding Bonds – $641 Million

This week’s featured bond comes from the State of California. The City of San Jose is issuing airport revenue refunding bonds in the amount of $641 million the week of March 20, 2017. The bonds consist of two series. Series 2017A is $487 million in revenue refunding bonds. Interest on bonds in these series are considered specific preference items for federal corporate and individual alternative minimum taxes. Series 2017B is $154 million in revenue refunding bonds that are tax-exempt. Proceeds from the bonds will be used to refund previously issued outstanding San Jose airport revenue bonds, Series 2007A and 2007B, respectfully. Further details on the purposes, security, and other matters pertaining to these revenue bonds can the found in the preliminary official statement, provided by MuniOS.

The bonds are limited obligations of the City of San Jose, secured by a pledge of general airport revenues from Norman Y Mineta San Jose International Airport. General revenues expressly exclude taxes levied or collected by the City.

Norman Y Mineta San Jose International Airport, and the City of San Jose, are within the San Jose-Sunnyvale-Santa Clara, CA Metropolitan Statistical Area. As of January 2017, the unemployment rate for the San Jose MSA is 3.4%, which is 0.5% lower than one year prior, and 1.3% lower than the national rate of 4.7% as of January 2017. The chart below displays the ten-year trend of unemployment for San Jose MSA, the State of California, and the United States national rate. MuniNet provides this data and more, easily accessible, for all 50 states and each Metropolitan Statistical Area in the country, in our Employment Database.

San Jose International Airport

Provided at left is a quick snapshot of financial characteristics of the Norman Y Mineta San Jose International Airport, as of 06/30/2016, along with the medians for other public airports for 2015-2016, courtesy of Merritt Research Services, LLC. It should be noted that these financial metrics reflect the Healthcare District in its entirety, not solely the El Camino Hospital. Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness)In addition to the Merritt information related to the featured bond, more information can be found on our municipal bond calendar, city, state, and county pages, and our employment database.

These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.