SAN FRANCISCO— Dan Thomas is chief financial officer of the Port of Seattle, which owns and operates Seattle-Tacoma International Airport and the seaport.
The airport serves about 31 million passengers a year, making it the nation’s 18th busiest, according to Federal Aviation Administration data.
The seaport is the nation’s seventh-busiest by container volume, according to a recent Standard & Poor’s report, and also hosts a summertime passenger cruise business that served more than 880,000 passengers last year, up from less than 7,000 in 1999.
The port has a $604 million capital budget for 2009, and a $2.13 billion five-year capital improvement program. He spoke to The Bond Buyer this month about how the port expects to utilize the different provisions of the American Recovery and Reinvestment Act.
Q: Generally, what elements in the stimulus plan do you think you may be able to put to use?
A: Particularly, the AMT holiday. [The stimulus package suspends the applicability of the alternative minimum tax to new-money bonds in 2009 and 2010, and allows refinancing of AMT bonds issued after 2004 on a non-AMT basis.] As a seaport and airport, most of the bonds we issue are AMT bonds. That’s definitely a feature we’ll be able to take advantage of.
Q: Do you plan to take advantage of the AMT holiday with new-money debt or refinancing?
A: A little of both. We don’t have a lot of refinancing options, especially fixed-rate debt, because they were issued before the five year look-back. We have a variable-rate deal baked by a European bank that’s under some stress because of the financial crisis and we’ll be looking to refinance that,
That’s probably the only refinancing option were looking at. Looking forward, we’ll probably have at least one or two new-money deals within the next couple years that would normally be AMT and we’ll be able to take advantage of the lower rates non-AMT will afford.
Q: What is your take on the possibilities offered by the Build America Bonds, either tax-credit or subsidy?
A: We haven’t really paid a lot of attention to that. For us it doesn’t really seem to have a lot of benefits. Quite frankly we haven’t researched it in depth.
Q: How about the various recovery zone bonds?
A: We haven’t really seen a whole lot of benefit for us.
Q: Will you be able to use direct stimulus grants as for projects in your capital improvement plan?
A: We are getting a little bit of extra funding for a runway repaving project. Beyond that, nothing directly, but we are hoping for funds to flow into regional transportation funds that would benefit our seaport. But that’s still being worked into the state’s project [plan].
Q: How are you approaching the stimulus grant? Does this allow you to issue less debt than otherwise, or do more projects on your capital improvement plan list?
A: It allows it to happen faster and gives us some additional funding. It certainly helps us within managing our cash flows. Given the state of the economy, like many issuers we’re looking at slowing down projects and conserving cash. It gives us a little more flexibility.
Q: What impact has the economy had on your enterprises?
A: We’ve seen downturns in both of those businesses. Our seaport container traffic was down a little more than 14% last year, and it was down 30% in February this year compared to February last year.
Q: And the airport?
A: We saw strong growth in enplanements in the first half of last year [though it tapered off as 2009 wore on]. We’re currently thinking we’re likely to be down 6% or 7% this year in enplanements.
Q: Other thoughts on the stimulus package?
A: The broader hope is that it helps stop the downturn in the economy and that it leads to a broader upturn.
