Refunding Bonds Series SR-1 March 22, 2016 Proposition S, Series A - - PowerPoint PPT Presentation

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Refunding Bonds Series SR-1 March 22, 2016 Proposition S, Series A - - PowerPoint PPT Presentation

Mar 06, 2024 16 likes •98 views

2016 General Obligation Refunding Bonds Series SR-1 March 22, 2016 Proposition S, Series A Bonds The District in 2009 issued Proposition S Convertible Capital Appreciation Bonds in the principal amount of $73,168,837.40 (the 2009

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SLIDE 1

March 22, 2016 2016 General Obligation Refunding Bonds Series SR-1

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SLIDE 2

Period Ending Principal Coupon Interest Compounded Interest Debt Service 7/1/2016

  • 7/1/2017
  • 7/1/2018
  • 7/1/2019
  • 7/1/2020
  • 7,999,800.00
  • 7,999,800.00

7/1/2021

  • 7,999,800.00
  • 7,999,800.00

7/1/2022

  • 7,999,800.00
  • 7,999,800.00

7/1/2023

  • 7,999,800.00
  • 7,999,800.00

7/1/2024 C

  • 7,999,800.00
  • 7,999,800.00

7/1/2025 C

  • 7,999,800.00
  • 7,999,800.00

7/1/2026 C

  • 7,999,800.00
  • 7,999,800.00

7/1/2027 C

  • 7,999,800.00
  • 7,999,800.00

7/1/2028 C

  • 7,999,800.00
  • 7,999,800.00

7/1/2029 C

  • 7,999,800.00
  • 7,999,800.00

7/1/2030 C

  • 7,999,800.00
  • 7,999,800.00

7/1/2031 C 19,846,628.70 6.00% 7,999,800.00 16,318,371.30 44,164,800.00 7/1/2032 C 25,883,208.70 6.00% 5,829,900.00 21,281,791.30 52,994,900.00 7/1/2033 C 27,439,000.00 6.00% 3,000,000.00 22,561,000.00 53,000,000.00 73,168,837.40 104,827,500.00 60,161,162.60 238,157,500.00 Current 2009 Bonds Debt Service

Proposition S, Series A Bonds

 The District in 2009 issued Proposition S Convertible Capital Appreciation

Bonds in the principal amount of $73,168,837.40 (“the 2009 Bonds”).

 The 2009 Bonds do not pay current interest but compound the interest until

July 1, 2019, at which time they have a “conversion value” of $133,330,000 and the District begins paying current interest semi-annually of 6.00% on the conversion value.

 The 2009 Bonds are subject to prepayment on July 1, 2024.

2 Conversion Date Conversion Value of $133,330,000 Callable on 7/1/2024

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SLIDE 3

2016 G.O. Refunding Bonds Series SR-1

 Due to current low interest rates and the July 1, 2024 prepayment

date, the 2009 Bonds may be “advance refunded” for savings. This means the District will issue Refunding Bonds in advance of when the bonds are subject to redemption and deposit the funds in escrow to pay all interest payable on the bonds when due and the conversion value of $133,330,000 on the redemption date of July 1, 2024.

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Period Ending Interest Principal Redeemed Compound Int Redeemed Total 7/1/2016

  • 1/1/2017
  • 7/1/2017
  • 1/1/2018
  • 7/1/2018
  • 1/1/2019
  • 7/1/2019
  • 1/1/2020

$3,999,900.00

  • $3,999,900.00

7/1/2020 $3,999,900.00

  • $3,999,900.00

1/1/2021 $3,999,900.00

  • $3,999,900.00

7/1/2021 $3,999,900.00

  • $3,999,900.00

1/1/2022 $3,999,900.00

  • $3,999,900.00

7/1/2022 $3,999,900.00

  • $3,999,900.00

1/1/2023 $3,999,900.00

  • $3,999,900.00

7/1/2023 $3,999,900.00

  • $3,999,900.00

1/1/2024 $3,999,900.00

  • $3,999,900.00

7/1/2024 $3,999,900.00 $73,168,837.40 $60,161,162.60 $137,329,900.00 $39,999,000.00 $73,168,837.40 $60,161,162.60 $173,329,000.00 Escrow Requirement for the 2009 Bonds

Conversion Value of $133,330,000 Interest payable to 7/1/24 call date

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SLIDE 4

Period Ending Principal Coupon Yield Interest Total Debt Service CAPI Net Debt Service 7/1/2016

  • 952,177.08

952,177.08 952,177.08

  • 7/1/2017
  • 6,013,750.00

6,013,750.00 6,013,750.00

  • 7/1/2018
  • 6,013,750.00

6,013,750.00 6,013,750.00

  • 7/1/2019
  • 6,013,750.00

6,013,750.00 6,013,750.00

  • 7/1/2020

1,315,000.00 5.00% 0.82% 6,013,750.00 7,328,750.00

  • 7,328,750.00

7/1/2021 1,380,000.00 5.00% 0.95% 5,948,000.00 7,328,000.00

  • 7,328,000.00

7/1/2022 1,450,000.00 5.00% 1.13% 5,879,000.00 7,329,000.00

  • 7,329,000.00

7/1/2023 1,525,000.00 5.00% 1.32% 5,806,500.00 7,331,500.00

  • 7,331,500.00

7/1/2024 1,600,000.00 5.00% 1.48% 5,730,250.00 7,330,250.00

  • 7,330,250.00

7/1/2025 1,680,000.00 5.00% 1.67% 5,650,250.00 7,330,250.00

  • 7,330,250.00

7/1/2026 1,765,000.00 5.00% 1.85% 5,566,250.00 7,331,250.00

  • 7,331,250.00

7/1/2027 C 1,850,000.00 5.00% 2.01% 5,478,000.00 7,328,000.00

  • 7,328,000.00

7/1/2028 C 1,945,000.00 5.00% 2.11% 5,385,500.00 7,330,500.00

  • 7,330,500.00

7/1/2029 C 2,040,000.00 5.00% 2.18% 5,288,250.00 7,328,250.00

  • 7,328,250.00

7/1/2030 C 2,145,000.00 5.00% 2.26% 5,186,250.00 7,331,250.00

  • 7,331,250.00

7/1/2031 C 35,385,000.00 4.00% 2.70% 5,079,000.00 40,464,000.00

  • 40,464,000.00

7/1/2032 C 44,895,000.00 4.00% 2.79% 3,663,600.00 48,558,600.00

  • 48,558,600.00

7/1/2033 C 46,695,000.00 4.00% 2.84% 1,867,800.00 48,562,800.00

  • 48,562,800.00

145,670,000.00 91,535,827.08 237,205,827.08 18,993,427.08 218,212,400.00 2016 G.O. Refunding Bonds, Series SR-1 Preliminary Debt Service(1)

2016 G.O. Refunding Bonds Series SR-1

The Refunding Bonds are current interest bonds with interest payments due each July and January. In order not to raise taxes to pay the current interest, the District will need to fund capitalized interest on the Refunding Bonds until the July 1, 2019 “Conversion Date” at which time the taxes that would have paid the current interest

  • n the 2009 Bonds will be used to pay the current interest on the Refunding Bonds.

The Board needs to determine the size of the refunding issue and that funding this capitalized interest as part of the cost of the refunding is reasonable.

4 Capitalized Interest to Conversion Date Callable

(1) Preliminary and subject to change

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SLIDE 5

2016 G.O. Refunding Bonds Series SR-1

 Sources and Uses and Escrow Cash Flow

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(1) Preliminary and subject to change (2) Interest rates of SLGS range from 0.27% - 0.89% (3) Escrow cash flow is a preliminary indication from Escrow Bidding Agent. Securities and respective interest rates currently unavailable.

Refunding Bonds, Series SR-1 (CIBs)(1) Sources Par Amount $145,670,000.00 Net Premium $18,292,545.85 Tax Rate Reserve Contribution $5,553,834.30 Total $169,516,380.15 Uses Refunding Escrow Deposits $149,891,290.30 Capitalized Interest Fund $18,734,979.00 Cost of Issuance $449,950.00 Underwriter's Discount $437,010.00 Contingency $3,150.85 Total $169,516,380.15

Capitalized Interest payments for Refunding Bonds Escrow payments for 2009 Bonds

Date Principal Interest(2) Net Receipts Other Cash Flows(3) Net Receipts 7/1/2016 934,339.00 17,838.60 952,177.60

  • 1/1/2017

2,942,985.00 63,889.25 3,006,874.25

  • 7/1/2017

2,952,157.00 54,718.42 3,006,875.42

  • 1/1/2018

2,960,423.00 46,452.38 3,006,875.38

  • 7/1/2018

2,970,192.00 36,682.98 3,006,874.98

  • 1/1/2019

2,981,330.00 25,544.76 3,006,874.76

  • 7/1/2019

2,993,553.00 13,321.31 3,006,874.31

  • 1/1/2020
  • 3,999,900.00

3,999,900.00 7/1/2020

  • 3,999,900.00

3,999,900.00 1/1/2021

  • 3,999,900.00

3,999,900.00 7/1/2021

  • 3,999,900.00

3,999,900.00 1/1/2022

  • 3,999,900.00

3,999,900.00 7/1/2022

  • 3,999,900.00

3,999,900.00 1/1/2023

  • 3,999,900.00

3,999,900.00 7/1/2023

  • 3,999,900.00

3,999,900.00 1/1/2024

  • 3,999,900.00

3,999,900.00 7/1/2024

  • 137,329,900.00

137,329,900.00 18,734,979.00 258,447.70 18,993,426.70 173,329,000.00 173,329,000.00 Escrow Cash Flow Capitalized Interest Cash Flow

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SLIDE 6

Savings

 The cash flow savings will start with the Conversion Date year 2019-20 and

extend through the years to July 1, 2033, the original maturity date of the 2009 bonds.

 By utilizing Refunding Bond proceeds and tax rate reserve funds to pay

interest on the refunding bonds to July 1, 2019, the District can issue the refunding bonds as Current Interest Bonds instead of Capital Appreciation Bonds and project that the tax rate necessary to pay the Proposition MM and S bonds after the issuance will not exceed $66.70/$100,000.

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Date Prior Debt Service Refunding Debt Service Capitalized Interest Refunding Net Cash Flow Savings Present Value to 5/4/2016@2.461% 7/1/2016

  • 952,177.08

952,177.08

  • 7/1/2017
  • 6,013,750.00

6,013,750.00

  • 7/1/2018
  • 6,013,750.00

6,013,750.00

  • 7/1/2019
  • 6,013,750.00

6,013,750.00

  • 7/1/2020

7,999,800.00 7,328,750.00

  • 7,328,750.00

671,050.00 617,181.00 7/1/2021 7,999,800.00 7,328,000.00

  • 7,328,000.00

671,800.00 603,283.16 7/1/2022 7,999,800.00 7,329,000.00

  • 7,329,000.00

670,800.00 588,208.55 7/1/2023 7,999,800.00 7,331,500.00

  • 7,331,500.00

668,300.00 572,269.26 7/1/2024 7,999,800.00 7,330,250.00

  • 7,330,250.00

669,550.00 559,847.25 7/1/2025 7,999,800.00 7,330,250.00

  • 7,330,250.00

669,550.00 546,710.77 7/1/2026 7,999,800.00 7,331,250.00

  • 7,331,250.00

668,550.00 533,121.49 7/1/2027 7,999,800.00 7,328,000.00

  • 7,328,000.00

671,800.00 523,124.35 7/1/2028 7,999,800.00 7,330,500.00

  • 7,330,500.00

669,300.00 509,047.85 7/1/2029 7,999,800.00 7,328,250.00

  • 7,328,250.00

671,550.00 498,810.03 7/1/2030 7,999,800.00 7,331,250.00

  • 7,331,250.00

668,550.00 485,077.34 7/1/2031 44,164,800.00 40,464,000.00

  • 40,464,000.00

3,700,800.00 2,566,542.63 7/1/2032 52,994,900.00 48,558,600.00

  • 48,558,600.00

4,436,300.00 2,996,733.47 7/1/2033 53,000,000.00 48,562,800.00

  • 48,562,800.00

4,437,200.00 2,920,720.17 238,157,500.00 237,205,827.08 18,993,427.08 218,212,400.00 19,945,100.00 14,520,677.34 Preliminary Savings(1)(2)

(1) Preliminary and subject to change; (2) Due to the difference in interest rates on the Refunding Bonds and the interest rates obtained by investing funds in the escrow, the negative arbitrage on escrowed funds invested to the redemption date is estimated at $6,611,827.24

PV of savings from cash flow 14,520,677.34 Less: Tax Rate Reserve

  • 5,553,834.30

Plus: Contingency 3,150.85 Net PV Savings 8,602,268.95 Conversion Value 133,330,000.00 % of Conversion Value 6.45%

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SLIDE 7

Board Determination

 In the Resolution, the District Board authorizes the issuance of

not to exceed $164 million in Refunding Bonds to pay the principal, interest, and premium required to pay and redeem the 2009 Bonds and other costs of refunding, including the capitalized interest on the Refunding Bonds and makes the following determination with respect to the issuance of the Refunding Bonds:

  • WHEREAS, the District hereby determines that in order to avoid levying

taxes to pay debt service on the Refunding Bonds prior to the Conversion Date, thereby preserving the debt structure of the Prior Bonds being refunded, it is reasonably required that interest on the Refunding Bonds be funded in whole or in part from proceeds of the Refunding Bonds and that funds from the tax rate reserve held by the County in the interest and sinking fund of the District may also be used to fund a portion of such interest

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SLIDE 8

Questions and Answers

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