Los Angeles Harbor Department tenders for $490.13 million bonds

New York, June 5 - The Harbor Department of the City of Los Angeles announced a Dutch auction tender offer for $490.13 million of outstanding revenue bonds as part of a refinancing transaction.

The department plans to sell new Harbor Department of the City of Los Angeles refunding revenue bonds, 2009 series C to replace the existing debt.

Unlike the existing bonds, interest on the new securities will not be subject to the federal alternative minimum tax, the department said.

However the existing bonds cannot by advance refunded under current federal income tax law nor current refunded under their terms so the issuer it conducting a tender offer to take out the old debt.

Covered by the tender are the department's 2005 series C-1, 2006 series A, 2006 series B and 2006 series D bonds.

Holders are invited to specify the price or prices at which they are willing to sell bonds, or they may make a non-competitive tender without a price.

The purchase price for all bonds bought of a specific maturity and series will be set using a modified Dutch auction in which the department will choose a price and buy all bonds tendered at or below that price. For each individual maturity and series, all bonds will be purchase at that same price.

Under the "second look" procedure, holders who tendered at higher prices may be allowed to decide whether they wish to submit amended offers at the price after it is set.

The harbor department will also pay accrued interest up to but excluding the purchase date.

The amount of bonds to be bought in the offer will be determined by the department, taking into account the timing and amount of savings on its debt service, and any other factors it considers relevant.

The tender ends on 5 p.m. ET on June 23. The results of the Dutch auction will be announced on June 24, with the expiration of the "second look" offer period expiring that same date. Final results will be announced on June 25 and settlement will follow on July 9.

De La Rosa & Co. (310 207-3616) and Goldman, Sachs & Co. (212 902-6617) are co-dealer managers for the offer.

The specific bonds included in the tender are:

Refunding revenue bonds, 2005 series C-1

Maturity Principal amount Coupon

($ millions) (%)

2011 $15.290 5%

2014 $0.875 4%

2017 $9.710 5%

Refunding revenue bonds, 2006 series A

Maturity Principal amount Coupon

($ millions) (%)

2011 $0.800 5%

2012 $7.015 5%

2013 $6.915 5%

2014 $11.370 5%

2015 $8.110 5%

2016 $8.510 5%

2017 $8.930 5%

2018 $9.990 5%

2019 $10.490 5%

2020 $10.210 5%

2021 $10.755 5%

2022 $13.680 5%

2023 $12.500 5%

2024 $16.715 5%

2025 $17.585 5%

2026 $18.495 5%

Refunding revenue bond,. 2006 series B

Maturity Principal amount Coupon

($ millions) (%)

2012 $9.935 5%

2013 $10.850 5%

2014 $6.265 5%

2015 $11.540 5%

2016 $12.140 5%

2017 $3.095 5%

2018 $12.855 5%

2019 $13.485 5%

2020 $14.995 5%

2021 $15.760 5%

2022 $14.195 5%

2023 $16.800 5%

2024 $14.065 5%

2025 $14.795 5%

2026 $16.760 5%

Revenue bonds, 2006 series D

Maturity Principal amount Coupon

($ millions) (%)

2011 $2.010 5%

2012 $2.115 5%

2013 $2.225 5%

2014 $2.335 5%

2015 $2.455 5%

2016 $2.580 5%

2017 $2.715 5%

2018 $2.855 5%

2019 $3.000 5%

2020 $3.155 5%

2021 $3.315 5%

2022 $3.485 5%

2023 $3.665 5%

2024 $3.855 5%

2025 $4.050 5%

2026 $4.260 5%

2027 $4.465 4.5%

2028 $4.670 4.5%

2029 $4.900 5%

2030 $5.150 5%

2031 $5.415 5%

2035 $24.575 5%

2036 $6.940 4.625%

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