Finding the Right Focus Helps LAXFUEL Soar

$29,620,000
Facilities Lease Refunding Revenue Bonds

In 1984, LAXFUEL was organized to finance, build and operate fuel storage facilities at Los Angeles International Airport. Today, the California non-profit corporation is the largest fuel consortium in the world, supplying jet fuel for 99% of the traffic at LAX.

LAXFUEL's 60 member-airlines have all been rocked by escalating fuel prices and diminished customer volume since Sept. 11, 2001. In 2005, De La Rosa & Co. presented a plan to generate significant savings on debt service by refunding the consortium's Series 1994 bonds.

The De La Rosa banking team redirected the focus of the LAXFUEL credit analysis away from the economic stability of the airlines – several of which were then operating in bankruptcy – to the essential services the airport provides Los Angeles and its vital role in domestic and international commerce.

"Our approach allowed LAXFUEL to keep its A- rating, secure an attractive insurance proposal for its Series 2005 bonds, and raise investor interest," said De La Rosa Principal Rich DeProspo. "Along the way, we overcame difficulties that prevented another underwriter from completing the refunding years ago."

LAXFUEL took advantage of a highly favorable market, producing nearly $2.4 million of NPV savings (7.81% of refunded par).

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