Remarketing of the 2011A Water Revenue Bond Board of Public Utilities - - PowerPoint PPT Presentation

Remarketing of the 2011A Water Revenue Bond

Board of Public Utilities April 6, 2012

Background

• 2011 Bond issue of $59,000,000 – Refunded 2005 debt
• 30 Year debt maturity, with 13 month interest term

 Short-term floating index rate, tied to SIFMA index + 0.07%  Presently at 0.25%  Principal and Interest paid per maturity schedule  Short term interest period attractive to Money Market Fund investors  Only available to very high grade credits such as RPU

• Interest Rate Hedge Agreement remains in place

 Established in 2005  Fixes interest rate at 3.2%

Proposed Remarketing

• No new debt with this transaction
• Resets the interest rate amount and period as required by

bond documents

 Resolution provides flexibility for one or two year period  Decision on period will be made at pricing date

• All other provisions of the bonds remain in place
• Present Balance on the Bond is $58,200,000

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RECOMMENDATIONS

That the Board of Public Utilities recommend that the City Council:

1. Approve the City’s Financing Team; 2. Delegate to the City’s Financing Team adjustments to the proposed structure for City Council approval; 3. Approve and adopt the SIFMA Remarketing Management Policy; 4. Adopt the appropriate resolution to approve the preparation of future Reoffering Statements consistent with the initial authorization approving the 2011A Water Revenue Bond Index Interest Rate Period(s); and 5. Authorize the City Manager, or his designee, to execute all documents related to this transaction.