TITLE
Recommendation to adopt resolution approving amendments to the Indenture of Trust for the City’s 2010 Taxable Revenue Bonds (Carnival Cruise Terminal Financing) to allow additional time for the Carnival Corporation to access funds for certain terminal improvements and certain costs of operation of terminal facilities. (District 2)
DISCUSSION
On November 2, 2010, the City issued $30,000,000 of Taxable Revenue Bonds (2010 Bonds) to refund the outstanding 2002 Taxable Revenue Bonds that had been issued on behalf of Carnival Corporation (Carnival), and to finance additional capital improvements to Carnival’s leasehold interest in the area adjacent to the Queen Mary. The 2010 Bonds are a limited obligation of the City guaranteed and payable solely by Carnival from the tariff levied by the Port of Long Beach (Port), and collected by Carnival. The tariff of $6.33 is assessed on cruise passengers embarking and debarking from Carnival’s Long Beach cruise ship terminal, and is used to pay for debt service and to create a capital reserve for future Carnival improvements.
Carnival has requested two amendments to the Indenture of Trust. The first amendment would allow additional time for Carnival to use bond proceeds toward additional terminal facilities and other costs of operation of the terminal facilities. Currently, under the Indenture of Trust, bond proceeds not spent by July 1, 2015 are to be used to redeem bonds.
The second amendment would allow Carnival more time to spend the excess tariff revenues. Currently, under the Indenture of Trust, the excess tariff revenues not needed to pay for the 2010 Bond debt service are to be used to redeem bonds three years after such revenues have been received.
The Carnival Corporation unconditionally guarantees the payment of debt service on the 2010 Bonds. At any time while the 2010 Bonds are outstanding, should Carnival’s wharfage tariff revenue be insufficient to pay the scheduled debt service in full, Carnival...
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