Board Meeting Materials
2000 - 2009
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[Project Vote] <br />RESOLUTION NO. 2009-17 <br />RESOLUTION RELATING TO THE GAS PROJECT REVENUE <br />BONDS (PROJECT NO. 1), SERIES 2007A AND SERIES 2007B: <br />(I) AUTHORIZING THE EXECUTION AND DELIVERY OF (A) A <br />LETTER AGREEMENT AMENDING THE COMMODITY SWAP <br />SCHEDULE BETWEEN THE AUTHORITY AND AIG -FP <br />BROADGATE LIMITED, (B) A RELATED CREDIT SUPPORT <br />ANNEX, (C) A CUSTODY AGREEMENT AND (D) A VALUA- <br />TION AGENT AGREEMENT; AND (II) AUTHORIZING THE <br />OFFICERS OF THE AUTHORITY TO DO ALL THINGS <br />DEEMED NECESSARY OR ADVISABLE <br />WHEREAS, in connection with the issuance of its Gas Project Revenue Bonds (Project <br />No. 1), Series 2007A and Series 2007B (the "Bonds"), the Southern California Public Power <br />Authority (the "Authority") entered into a natural gas commodity swap agreement with AIG -FP <br />Broadgate Limited (the "Counterparty"), consisting of an ISDA Master Agreement and a related <br />Schedule (the "Schedule") and Confirmation (collectively, the "Commodity Swap"); <br />WHEREAS, the Commodity Swap is subject to termination if the rating of the <br />Coumterparty's guarantor, American International Group, Inc. ("AIG"), is not rated by or is rated <br />below "A2" by Moody's or below "A" by Standard & Poor's, unless the Counterparty provides <br />adequate assurances of its ability to perform under the Commodity Swap; <br />WHEREAS, AIG's ratings have been downgraded below the thresholds set forth in the <br />Commodity Swap; <br />WHEREAS, in order to address the occurrence of the termination event arising from such <br />downgrade, the Counterparty has proposed amending the Schedule pursuant to a letter agreement <br />between the Authority and the Counterparty (the "Letter Agreement") and providing collateral to <br />secure, for a 60 -day rolling period, its obligations under the Commodity Swap pursuant to a <br />Credit Support Annex between the Authority and the Counterparty (the "Credit Support <br />Annex"); <br />WHEREAS, the Counterparty has proposed to enter into similar documentation with J. <br />Aron & Company ("J. Aron"), the provider of the natural gas financed by the Bonds, to cure a <br />corresponding termination event under the commodity swap agreement between the <br />Counterparty and J. Aron (the "J. Aron Cormnodity Swap"); <br />WHEREAS, the termination of either the Commodity Swap or the J. Aron Commodity <br />Swap, or both, would trigger a mandatory redemption of the Bonds; <br />WHEREAS, in order to prevent such mandatory redemption of the Bonds, the Authority <br />is willing to enter into the Letter Agreement and the Credit Support Annex; and <br />
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