SAN FRANCISCO - As the auction-rate securities market meltdown raged this spring, San Francisco International Airport rushed to restructure hundreds of millions of dollars of ARS with variable-rate demand obligations, trying to beat other issuers to the market before liquidity dried up.

Airport officials sold Series 37A on May 23, using a simple, well-tested weekly VRDO structure for the $205 million deal. They bought liquidity from a bank with a solid investment-grade rating to handle any puts. They backed the deal with insurance from one of the last two triple-A rated, stable bond insurers. And they hedged interest rate risk with a swap from a 158-year-old Wall Street titan.

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