BOND CONVENANT FROM THE ISSUER'S VIEWPOINT

This article considers the fact that the local governmental agencies who operate airports must have some authorization to issue revenue bonds, and discusses the case in Los Angeles where the city charter was amended to give the Board of Airport Commissioners authority to issue revenue bonds. The various aspects of a desirable covenant are set forth. The amount of coverage and the maintenance of rates to provide for the operation and maintenance of the facilities are discussed and comments are made on the problem of readjustment of rentals, leases, fees, etc. every three years. The no-priority covenant and the "restriction and additional indebtedness" covenant are also covered. It is noted that if a high coverage ratio such as 1.5 or more has been set under the rate covenant, the same high ratio probably must be used for new debt. It is pointed out that the definite permission contained in the covenant-that future revenues may be derived from facilities to be constructed with new money-is important, as such revenue will undoubtedly be needed to fulfill the required coverage ratio for the total debt.

  • Supplemental Notes:
    • From Airport Economic Planning by G.P. Howard.
  • Corporate Authors:

    Massachusetts Institute of Technology Press

    55 Haywood Street
    Cambridge, MA  USA  02142-1493
  • Authors:
    • Dannenbrink, T D
  • Publication Date: 1974

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00155734
  • Record Type: Publication
  • Source Agency: Massachusetts Institute of Technology
  • Files: TRIS
  • Created Date: Aug 31 1977 12:00AM