Louis Armstrong New Orleans International Airport

As co-financial advisors to the New Orleans Aviation Board (NOAB), Moreward assisted NOAB with complex and challenging issues prior to and following the events of Hurricane Katrina. Our firm worked with NOAB to secure a Community Disaster Loan (CDL) from FEMA, draft a credible plan for recovery, determine debt payment structures and options, and ultimately inspire confidence from the financial community. This was instrumental in allowing the airport to continue to provide a high level of service to passengers and partners while recovering ahead of projections. Below is a description of our efforts at the airport.

Rehabilitation Project

In the months prior to the Hurricane Moreward worked to close a financing for rehabilitation of one of the Louis Armstrong New Orleans International Airport (the "Airport") runways, purchase of new loading bridges, and concourse improvements. In order to start one of the projects Moreward and its co-financial advisor negotiated a credit facility to allow the work to proceed leading up to a bond closing that would fund all aspects of the project. The construction costs of the runway project were paid from AIP grants and draws on the credit facility which was provided by a group of local banks. It was anticipated that the credit facility would be repaid from the proceeds of bonds that the Airport planned to issue in October 2005. The Airport had meetings with the rating agencies scheduled when Hurricane Katrina arrived. Such meetings were cancelled and the proposed bonds were not issued.

Recovery Work

Most recently, following the devastation caused by Hurricane Katrina, Moreward helped develop a Financial Recovery Plan for the NOAB. As a result of the various impacts the hurricane had on the New Orleans area and Airport, the NOAB had to assess how operating expenses and debt service obligations could be met with its current levels of revenue streams. The Financial Recovery Plan described the various impacts of Hurricane Katrina and provided information on the Airport's current operations. It was intended to provide the financial community with a comprehensive look at the airport's strategy for returning to Pre-Katrina levels of service and revenue.

The Financial Recovery Plan was drafted to provide a roadmap for the airport to manage its financial operations during this critical post Katrina period of recovery while maintaining adequate levels of service for passengers and partners such as the airlines. The plan was also intended to clearly state the goals that will guide the airport's financial management during the recovery period. The goals outlined were:

1. To seek to maximize various nonairline revenue sources.

2. Determine "mission critical" projects included in the Airport's Capital Improvement Program, as well as thoughtfully assess staffing levels and other operating expenses.

3. To analyze airline revenue agreements --- balancing what the airport could reasonably expect to collect while not charging the airlines fees that would discourage the airlines from restoring service to the Airport.

4. To take all necessary actions to make sure that Airport debt service payment obligations during the recovery period were met.

5. Return to traditional methodologies for determining rates and charges to meet existing financial covenants as soon as enplanement levels permit.

Having outlined goals of the recovery, provided a recovery plan to the financial community, and garnered 'buy-in' from lenders, insurers, and rating agencies, we worked with the Airport to pursue alternatives which positioned the airport to recover in the near term while meeting its obligations.

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