Alabama State Port Authority

241 Pages·2017·1.9 MB·English

Supplement dated February 23, 2017
to
Preliminary Official Statement dated February 14, 2017
with respect to

ALABAMA STATE PORT AUTHORITY

$125,625,000*
DOCKS FACILITIES REVENUE REFUNDING BONDS,
SERIES 2017A (AMT),
$13,950,000*
DOCKS FACILITIES REVENUE REFUNDING BONDS,
SERIES 2017B (NON-AMT),
$7,910,000*
DOCKS FACILITIES REVENUE REFUNDING BONDS,
SERIES 2017C (NON-AMT),
AND
$133,260,000*
DOCKS FACILITIES REVENUE REFUNDING BONDS,
SERIES 2017D (TAXABLE)
INTRODUCTION
This Supplement is intended to supplement the Preliminary Official Statement, dated February 14, 2017
(the “POS”), relating to the issuance of the above-referenced bonds (the “Series 2017 Bonds”) by the Alabama State
Port Authority (the “Authority”). All capitalized terms used in this Supplement and not defined herein shall have
the meaning specified in the POS unless the context or use clearly indicates otherwise. This Supplement is not
intended to be read alone. Instead, this Supplement is intended to be read in conjunction with the
information contained in the POS. This Supplement is not intended to act as a substitute for or as a
replacement of the information contained in the POS except as expressly provided herein.
RECENT EVENT
On February 21, 2017 an employee of the Authority inadvertently released sensitive personnel information,
via an email, to an unauthorized recipient in response to a phishing email. The information released includes names,
addresses, social security numbers and 2016 compensation information. No customer data was involved in this
matter and the Authority’s systems were not compromised. The Authority has taken and continues to take steps to
protect against adverse consequences to its employees and retirees, including notifying federal and state authorities
and securing assistance for the affected personnel from an identity theft protection service, and is in the process of
providing notice to the employees of the occurrence and of actions taken by the Authority and advice as to
protective steps to be taken by the employees and retirees. Nevertheless, management expects that there could be
instances of identity theft and adverse consequences to employees and/or retirees. While this incident will result in
some near-term expenses, the Authority does not expect that this matter will result in a material adverse impact on
the financial condition or operations of the Authority.
ADDITIONAL INFORMATION
For further information during the initial offering period with respect to the Series 2017 Bonds, contact
Larry R. Downs, Secretary-Treasurer and Chief Financial Officer, Alabama State Port Authority, 250 North Water
Street, Mobile, Alabama 36602 (telephone: [phone]).

* Preliminary; subject to change.
03943645.2
–n PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY 14, 2017
No
TIOdicti NEW ISSUES (4) - BOOK ENTRY ONLY RATINGS (See Ratings herein):
Cs
Uuri Underlying: S&P: A- (stable outlook)
e prior to the delivery of these securities. See “INTRODnor shall there be any sale of these securities in any j ceohBoafetotehoexannnenod reclr onddte tatlnStauh hrd hncibIeiaeedsonenyryn l,arrSi g S aop Saebtseecmhlrsole rrotepo erriei2aav fe eiarefe 0to resrnsc“ttnp1ss ieo era22o aoi6rrem2t0nn0nstnlDi0aa.1 i1 vstw g1tios7.eB7en r7n AIhd mooo ABn oc nsfopBtoi o sdfBienetrn o srhsriBpoind e nseamnioosdso sc rdnt A“snu o ains odsm”umoituon ,,isrt Cbtoe hb u ttaSs neooaohnftnexustorxaedrh c irn nifieSilt oteuswymrtfeerseie d,rmi ae l dppi2a,txil eeho u n0buiorussilrs1taf nneese2pt 7ld tedi rf 0oatBnr reiehos1x”nosrg ene 7Bt m ocs p e lBomofi aoxro nmn gtnweiBfehdrdf s aec,oeeoit t anrif nvhestfonelxaisiaedcrnnd g excsui cSu mgain llaepl eaaancio pnrutftlowyfisitoidr m ene S rppfa sast rgeeeon ph soc rr2stfued tmeihoep0 i rofiSscroer1 pdn,o e Ane f7ao rrsaee dlAslip1eaxdntueene o4bcecssrBrrerta7e inla2poaodm(ynaft0tlna ig watic1t)dto ihnoh w7insvioencatC,en;fh h o st f s tcmi mtetBhtunochrdheohmiueceoee nn h ert aSIeoipdd aani nemprs xltnrt ayiao e aiutinpnc xreeslsmeiuntrsad ueoene rat rdcn2siaotplnIhoats 0tdon,Ri anx 1osamSshset. e7f neii uov esi mrvBs weSrnx.iiue n eteIepipe Bcenmesdsuvrohm t o e:ees“2et i nsr SeTh rn0Cos,ddeeeA 1ieFSfiord sm doosX7dit& i npa etAaa ieuacMsPixn nn smson hB :c2dudA pf i:lot 0 ucroTtoA1 ant1haeAnd Th9sAdfs7 x eee8c-sEou A d r ouo6if((RcSe r rmm,insBhBnS pe ntaSe ropoc”oiae seig nntenorxbh ehr aasagddfcsieleetot mseel r iCcduira s2e vooo oe sodi0pone2rmninuuj1n u 0osuSd ontp7. nr1wse leiuslCp o7 tnrdiIieoteoa inBot.dlldfeB sh,notk i se eIiBi ovcco) srnnnr2uneio ekettdto 0rndsseeew)fur1ptsrrdr e tia 7eeee ohntiiscsslBnhsessttttt
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ement and tOfficial Staton, or sale tNheew S TeYrhoiiersks c ,2 oo0vn1e 7or rBp aoabgnoed usct oi n_n_ tda_ei_nfi_sn_ i_ct_eiv_ret_a _fio n_r _imn_f ,wo 2ri0ml1l a7bt.eio anv afoilra bqulei cfko rr edfeelriveenrcye tohnrloyu. g Iht itsh en ofat cai lsiutimesm oafr Ty hoef Dtheisp oisssiutoer. y I Tnvruesstt oCros mmpuasnt yr eiand N tehwe eYnotrirke,
This Preliminary Official StatChanges to the Preliminary in which such offer, solicitati *OH Pfafirecrliibamlo iSnratar ytFe; msiunebnajetcn tto ct oio acbhtlaa niSng eei.nrfvorimceatsio,n L eLssCenT thiSael u dtoant etTh oerf umthsiaskt Oi nfRCfigc ooiiatfbl iaSigntna ritsneoomfounerpnm tH eisd u_ i_nm_v_ep_s_ht_m_r_ee_n_yt_ _d.ecision. UMB Bank, N.A.
ALABAMA STATE PORT AUTHORITY

$125,625,000*

Docks Facilities Revenue Refunding Bonds,
Series 2017A (AMT)

MATURITIES, AMOUNTS, RATES, PRICES & CUSIP NUMBERS

Maturity Principal Amount Interest Rate Price or Yield CUSIP

2017 $2,135,000
2023** 7,065,000
2024** 7,420,000
2025** 7,790,000
2026** 8,180,000
2027** 8,420,000
2028** 8,840,000
2029** 9,280,000
2030** 8,805,000
2031** 10,440,000
2032** 10,965,000
2033** 11,510,000
2034** 12,090,000
2035** 12,685,000
_______________________________

$13,950,000*

Docks Facilities Revenue Refunding Bonds,
Series 2017B (Non-AMT)

MATURITIES, AMOUNTS, RATES, PRICES & INITIAL CUSIPS

Maturity Principal Amount Interest Rate Price or Yield CUSIP

2018 $4,050,000
2019 4,295,000
2020 4,565,000
2021 1,040,000
_______________________________

* Preliminary, subject to change.
** Insured Bonds.
$7,910,000*

Docks Facilities Revenue Refunding Bonds,
Series 2017C (Non-AMT)

MATURITIES, AMOUNTS, RATES, PRICES & INITIAL CUSIPS

Maturity Principal Amount Interest Rate Price or Yield CUSIP

2022 $10,000
2023** 10,000
2024** 10,000
2025** 10,000
2026** 15,000
2027** 15,000
2028** 15,000
2029** 15,000
2030** 15,000
2031** 15,000
2032** 15,000
2033** 15,000
2034** 20,000
2035** 20,000
2036** 7,710,000

_______________________________

$133,260,000*

Docks Facilities Revenue Refunding Bonds,
Series 2017D (Taxable)

MATURITIES, AMOUNTS, RATES, PRICES & INITIAL CUSIPS

Maturity Principal Amount Interest Rate Price or Yield CUSIP

2017 $725,000
2018 1,050,000
2019 1,065,000
2020 1,085,000
2021 4,910,000
2022 13,895,000
2023** 2,155,000
2024** 2,235,000
2025** 2,320,000
2026** 2,415,000
2027** 2,125,000
2028** 2,215,000
2029** 2,315,000
2030** 2,425,000
2031** 2,845,000
2032** 2,965,000
2033** 3,115,000
2034** 3,275,000
2035** 3,445,000
2036** 3,620,000
2037** 18,890,000
2038** 19,840,000
2039** 20,825,000
2040** 13,505,000

* Preliminary, subject to change.
** Insured Bonds.
Assured Guaranty Municipal Corp. (“AGM”) makes no representation regarding the Series 2017 Bonds or
the advisability of investing in the Series 2017 Bonds. In addition, AGM has not independently verified, makes no
representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official
Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the
accuracy of the information regarding AGM supplied by AGM and presented under the heading “Bond Insurance”
and “Appendix F- Specimen Municipal Bond Insurance Policy

The Underwriters have provided the following sentence for inclusion in this Official Statement. The
Underwriters have reviewed the information in this Official Statement in accordance with and as part of its
responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this
transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.
.
______________________________
ALABAMA STATE PORT AUTHORITY
Members of the Board of Directors
Horace H. Horn, Jr., Chairman
Joe McCarty, 1st Vice Chairman
Ben C. Stimpson, 2nd Vice Chairman
Daryl H. Dewberry
Alvin K. Hope II
Tim Parker, III
Algernon “Al” Stanley
Bestor Ward
Mobile Mayor Sandy Stimpson (Ex-Officio)
James K. Lyons
Director and Chief Executive Officer
Larry R. Downs
Secretary-Treasurer and Chief Financial Officer
_______________________________

FINANCIAL ADVISOR
Pinnacle Financial Group, LLC
Rowayton, Connecticut
______________________________

FEASIBILITY CONSULTANT
MICP Capital
San Francisco, California
______________________________

BOND COUNSEL AND COUNSEL FOR THE AUTHORITY
Hand Arendall LLC
Mobile, Alabama
______________________________

INDEPENDENT ACCOUNTANTS
Warren Averett, LLC
Birmingham, Alabama
_______________________________

COUNSEL TO THE UNDERWRITERS
Maynard, Cooper & Gale, P.C.
Birmingham, Alabama
_______________________________
[THIS PAGE INTENTIONALLY LEFT BLANK.]
TABLE OF CONTENTS
Page
INTRODUCTION ......................................................................................................................................................... 1
General ...................................................................................................................................................................... 1
Changes to the Preliminary Official Statement ......................................................................................................... 2
GLOSSARY OF TERMS USED IN OFFICIAL STATEMENT .................................................................................. 2
THE PLAN OF FINANCING ....................................................................................................................................... 4
General ...................................................................................................................................................................... 4
Refunding Plan ......................................................................................................................................................... 4
SOURCES AND USES OF FUNDS ............................................................................................................................. 5
Series 2017A Bonds ................................................................................................................................................. 5
Series 2017B Bonds .................................................................................................................................................. 5
Series 2017C Bonds .................................................................................................................................................. 5
Series 2017D Bonds ................................................................................................................................................. 6
DESCRIPTION OF THE SERIES 2017 BONDS ......................................................................................................... 6
General Provisions .................................................................................................................................................... 6
Method and Place of Payment .................................................................................................................................. 6
Redemption of Series 2017A Bonds Prior to Maturity ............................................................................................. 7
Redemption of Series 2017B Bonds Prior to Maturity ............................................................................................. 7
Redemption of Series 2017C Bonds Prior to Maturity ............................................................................................. 8
Redemption of Series 2017D Bonds Prior to Maturity ............................................................................................. 9
General Redemption Provisions ............................................................................................................................... 9
Registration and Exchange ..................................................................................................................................... 10
Book-Entry Only System ........................................................................................................................................ 10
Authority for Issuance ............................................................................................................................................ 10
Amendments to Bond Order ................................................................................................................................... 10
SECURITY AND SOURCE OF PAYMENT ............................................................................................................. 11
General .................................................................................................................................................................... 11
Description of Docks Facilities Revenues .............................................................................................................. 11
Debt Service Reserve Fund ..................................................................................................................................... 12
Maintenance of Rates and Charges ......................................................................................................................... 12
Establishment of Rates and Charges ....................................................................................................................... 13
Swap Transaction .................................................................................................................................................... 13
Additional Senior Lien Bonds ................................................................................................................................ 13
Subordinate Obligations ......................................................................................................................................... 13
The United States Bankruptcy Code ....................................................................................................................... 13
BOND INSURANCE .................................................................................................................................................. 14
AVAILABLE STATE TAX REVENUES .................................................................................................................. 16
General .................................................................................................................................................................... 16
Coal Severance Tax ................................................................................................................................................ 16
Oil and Gas Severance Tax ..................................................................................................................................... 17
OTHER GOVERNMENTAL SUPPORT ................................................................................................................... 18
Conditional Appropriations .................................................................................................................................... 18
Capital Grants ......................................................................................................................................................... 18
DEBT SERVICE REQUIREMENTS AND COVERAGE ......................................................................................... 19
Debt Service ........................................................................................................................................................... 19
Historical Coverage ................................................................................................................................................ 20
Pro Forma and Projected Coverage ........................................................................................................................ 20
FINANCIAL SYSTEM ............................................................................................................................................... 21
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ............................................................................. 21
General .................................................................................................................................................................... 21
Statements of Revenues, Expenses, and Changes in Net Assets/Statements of Net Assets .................................... 21
Management’s Discussion and Analysis – Fiscal Years 2015 and 2016 ................................................................ 24
Management’s Discussion and Analysis – Three Months Ended December 31, 2015 and 2016 ........................... 24
Contingent Liabilities ............................................................................................................................................. 24
THE AUTHORITY ..................................................................................................................................................... 25
General .................................................................................................................................................................... 25
Management ........................................................................................................................................................... 25
Employee Relations ................................................................................................................................................ 28
Insurance and Risk Management ............................................................................................................................ 30
AUTHORITY OPERATIONS .................................................................................................................................... 30
General .................................................................................................................................................................... 30
Competitive Position on the Gulf of Mexico .......................................................................................................... 31
General Note Regarding Description of Authority Facilities.................................................................................. 31
Turning Basins ........................................................................................................................................................ 31
Coal Handling and Storage Facilities ..................................................................................................................... 32
General Cargo/Intermodal Facilities ....................................................................................................................... 34
Bulk Material Handling and Warehouse Facilities ................................................................................................. 35
Terminal Railway Facilities .................................................................................................................................... 36
Marine Liquid Bulk Terminal Facilities ................................................................................................................. 36
Other Existing Facilities ......................................................................................................................................... 36
Recently Completed Authority Facilities ................................................................................................................ 37
Five-Year Capital Plan ........................................................................................................................................... 37
Environmental Impact and Policy ........................................................................................................................... 38
Hurricane Preparedness .......................................................................................................................................... 38
Security ................................................................................................................................................................... 39
LITIGATION .............................................................................................................................................................. 39
RISK FACTORS ......................................................................................................................................................... 39
General .................................................................................................................................................................... 39
Authority’s Immunity from Suits to Enforce Payment of Bonds and Other Obligations ....................................... 40
Dependence on Market Conditions and Political Climate ...................................................................................... 40
Feasibility Report .................................................................................................................................................... 40
Dependence on Certain State Tax Revenues .......................................................................................................... 40
Hurricanes and Other Severe Weather .................................................................................................................... 41
Other Risks of Loss, Damage or Destruction ......................................................................................................... 41
Costs Associated with Enhanced Security Precautions .......................................................................................... 41
Financial Performance and Capital Commitments ................................................................................................. 42
Environmental Regulation ...................................................................................................................................... 42
Competition ............................................................................................................................................................ 42
Termination or Expiration of Material Contracts.................................................................................................... 42
Regulatory Factors Affecting Coal Industry ........................................................................................................... 42
Tax-Exempt Status of Series 2017A Bonds, Series 2017B Bonds, and Series 2017C Bonds ................................ 42
Employee Relations ................................................................................................................................................ 43
State Legislative Control ........................................................................................................................................ 43
The United States Bankruptcy Code ....................................................................................................................... 43
ii
ECONOMIC AND DEMOGRAPHIC INFORMATION ........................................................................................... 44
General .................................................................................................................................................................... 44
Population ............................................................................................................................................................... 44
Employment ............................................................................................................................................................ 45
Income Levels ......................................................................................................................................................... 46
Education ................................................................................................................................................................ 46
Utilities ................................................................................................................................................................... 47
Transportation ......................................................................................................................................................... 47
LEGAL MATTERS .................................................................................................................................................... 48
TAX MATTERS ......................................................................................................................................................... 48
Series 2017A Bonds, Series 2017B Bonds and Series 2017C Bonds ..................................................................... 48
Certain Collateral Federal Tax Consequences ........................................................................................................ 49
Original Issue Discount .......................................................................................................................................... 49
Premium .................................................................................................................................................................. 49
Series 2017D Bonds ............................................................................................................................................... 49
VERIFICATION OF CERTAIN COMPUTATIONS RELATING TO SERIES 2017 BONDS ................................ 50
UNDERWRITING ...................................................................................................................................................... 50
CONTINUING DISCLOSURE ................................................................................................................................... 51
General .................................................................................................................................................................... 51
Compliance with Prior Undertakings ...................................................................................................................... 52
RATINGS .................................................................................................................................................................... 52
REPORT OF FEASIBILITY CONSULTANT ........................................................................................................... 53
INDEPENDENT ACCOUNTANTS ........................................................................................................................... 53
FINANCIAL ADVISOR ............................................................................................................................................. 53
DISCLAIMERS AND OTHER MISCELLANEOUS MATTERS ............................................................................. 53
ADDITIONAL INFORMATION ............................................................................................................................... 55
Appendix A – Audited Financial Statements of the Authority
for the fiscal years ended September 30, 2015
and September 30, 2016
Appendix B – Report of Feasibility Consultant
Appendix C – Book-Entry Only System
Appendix D – Summary of the Bond Order
Appendix E – Proposed Opinions of Bond Counsel
Appendix F – Specimen Municipal Bond Insurance Policy

iii