Upper Dublin Township REFINANCING DISCUSSION July 9, 2019 - - PDF document
Upper Dublin Township REFINANCING DISCUSSION July 9, 2019 Prepared by: Scott Shearer Managing Director & Ben Kapenstein Senior Analyst PFM Financial Advisors LLC One Keystone Plaza, Suite 300 North Front & Market Streets
PFM Financial Advisors LLC
One Keystone Plaza, Suite 300 North Front & Market Streets Harrisburg, PA 17101 717.232.2723 (P) 717.232.8610 (F)
www.pfm.com
July 9, 2019
Prepared by: Scott Shearer Managing Director
&
Ben Kapenstein Senior Analyst REFINANCING DISCUSSION
PFM Financial Advisors LLC
Upper Dublin Township Topics of Discussion July 9, 2019
I) Refinancing Opportunity:
The Township’s Financial Advisor, PFM Financial Advisors, has identified a refinancing opportunity on the Series of 2014 Bonds. The goal of the refinancing will be to realize interest rate savings. Current projections show savings of approximately $230,000.
II) Timeline DATE OBJECTIVE July 9, 2019 * Regularly Scheduled Board Meeting * ‐ Presentation on 2019 Refinancing Opportunity ‐ Authorize Financing Team to Proceed July – August Transactional Due Diligence (POS, Rating Call, etc.) August 13, 2019 * Regularly Scheduled Board Meeting * ‐ Board considers Maximum Parameters Ordinance Mid/Late August Bond Sale – Lock in Rates October 17, 2019 Settlement Date January 15, 2020 Call Bonds IiI) Review – Maximum Parameters Ordinance
♦ Flexibility in the pricing date so that bonds are priced during favorable market conditions.
♦ Establishment of maximum par amount, interest rates, maturity dates, etc. which are typically higher than what is needed for actual pricing – this creates flexibility to achieve best rates.
♦
This is the same process the Township has utilized for previous bond issuances. Series of 2014
$7,220,000
2.00% ‐ 4.00%
1/15/2020
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HISTORICAL MMD CURVE ILLUSTRATION ‐ SINCE JANUARY 1, 1998 SPOT ANALYSIS ‐ 10 YEAR MMD ‐ SINCE JANUARY 1, 1998 SPOT ANALYSIS ‐ 10 YEAR MMD ‐ SINCE JANUARY 1, 2018
MUNICIPAL MARKET UPDATE
July 1, 2019
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year Range Average Current
Maturity Year Yield (%)
1.10 1.60 2.10 2.60 3.10 3.60 4.10 4.60 5.10
Yield (%)
1.500 1.700 1.900 2.100 2.300 2.500 2.700 2.900
Jan‐18 Feb‐18Mar‐18 Apr‐18 May‐18 Jun‐18 Jul‐18 Aug‐18 Sep‐18 Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19Mar‐19 Apr‐19 May‐19 Jun‐19
Yield (%)
Since 1/1/1998 Amount Date Min 1.290 6/27/2016 Max 5.370 5/18/2000 Average 3.205 n/a Current 1.630 7/1/2019 Since 1/1/2018 Amount Date Min 1.610 6/7/2019 Max 2.770 11/2/2018 Average 2.292 n/a Current 1.630 7/1/2019
PFM Financial Advisors LLC 7/1/2019
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UPPER DUBLIN TOWNSHIP SUMMARY OF OUTSTANDING INDEBTEDNESS A Debt Service Requirements 1 2 3 4 5 6 7 8 9 10 Fiscal G.O. Notes G.O. Bonds G.O. Bonds G.O. Note G.O. Bonds G.O. Notes G.O. Bonds G.O. Bonds Total Year Series of Series A of Series of Series of Series of Series of Series of Series of Debt Ended 2008 (Del Val) [1] 2013 2014 2016 (Del Val) [2] 2016 2017 (Del Val) [3] 2015 2016 Service 12/31/2019 681,115 311,500 586,775 242,798 1,187,211 575,505 172,065 31,500 3,788,470 12/31/2020 679,820 312,000 587,475 243,243 1,191,761 575,382 169,865 30,900 3,790,447 12/31/2021 679,748 45,900 590,075 242,621 1,463,111 576,025 172,665 30,300 3,800,445 12/31/2022 678,858 592,475 242,922 530,661 577,407 170,365 2,792,689 12/31/2023 678,130 589,675 243,141 527,311 577,508 167,950 2,783,716 12/31/2024 677,524 585,788 243,278 528,811 578,349 170,075 2,783,824 12/31/2025 676,997 591,288 243,332 525,161 578,906 172,075 2,787,759 12/31/2026 676,510 590,913 243,304 526,139 580,178 173,950 2,790,993 12/31/2027 676,022 589,650 243,194 531,636 580,142 170,375 2,791,019 12/31/2028 674,511 587,688 243,002 526,924 581,818 166,800 2,780,742 12/31/2029 589,338 242,728 527,054 582,161 168,225 2,109,504 12/31/2030 589,388 242,371 526,974 583,192 174,175 2,116,099 12/31/2031 588,950 242,917 526,684 583,888 169,825 2,112,263 12/31/2032 588,025 242,375 531,131 585,246 170,475 2,117,253 12/31/2033 589,088 242,736 530,316 585,246 170,600 2,117,986 12/31/2034 589,400 242,994 64,069 586,906 170,563 1,653,932 12/31/2035 587,600 242,165 62,494 587,182 170,363 1,649,803 12/31/2036 242,238 65,853 588,094 896,185 12/31/2037 589,617 589,617 Totals 6,779,235 669,400 10,013,588 4,371,361 10,373,302 11,052,751 2,900,410 92,700 46,252,747 Principal [4]: 5,104,000 650,000 7,580,000 3,500,000 8,105,000 8,657,000 2,255,000 60,000 35,911,000 Call Date: Make-Whole 7/15/2018 1/15/2020 3/25/2021 3/15/2022 7/15/2020 3/15/2022 Purpose: New Money New Money Partial Adv Ref 2010 New Money New Money Cur Ref 2011 Adv Ref 2013A New Money Cur Ref 2010 Cur Ref 2011
[1] For these purposes, assumes a fixed rate of 4.088% for the live of the 2008 Del Val Loan [2] For these purposes, assumes a fixed rate of 2.055% for the live of the 2016 Del Val Loan [3] For these purposes, assumes a fixed rate of 2.579% for the live of the 2017 Del Val Loan [4] Outstanding as of July 2, 2019
ELECTORAL NON-ELECTORAL
PFM Financial Advisors LLC 7/2/2019
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UPPER DUBLIN TOWNSHIP SERIES OF 2014 Bonds to be Refunded 1 2 3 4 5 6 Semi-Annual Fiscal Year Date Principal Rate Interest Debt Service Debt Service 1/15/2020 108,737.50 108,737.50 7/15/2020 370,000 2.000 108,737.50 478,737.50 587,475.00 1/15/2021 105,037.50 105,037.50 7/15/2021 380,000 2.000 105,037.50 485,037.50 590,075.00 1/15/2022 101,237.50 101,237.50 7/15/2022 390,000 2.000 101,237.50 491,237.50 592,475.00 1/15/2023 97,337.50 97,337.50 7/15/2023 395,000 2.250 97,337.50 492,337.50 589,675.00 1/15/2024 92,893.75 92,893.75 7/15/2024 400,000 2.375 92,893.75 492,893.75 585,787.50 1/15/2025 88,143.75 88,143.75 7/15/2025 415,000 2.500 88,143.75 503,143.75 591,287.50 1/15/2026 82,956.25 82,956.25 7/15/2026 425,000 2.650 82,956.25 507,956.25 590,912.50 1/15/2027 77,325.00 77,325.00 7/15/2027 435,000 2.750 77,325.00 512,325.00 589,650.00 1/15/2028 71,343.75 71,343.75 7/15/2028 445,000 3.000 71,343.75 516,343.75 587,687.50 1/15/2029 64,668.75 64,668.75 7/15/2029 460,000 3.250 64,668.75 524,668.75 589,337.50 1/15/2030 57,193.75 57,193.75 7/15/2030 475,000 3.250 57,193.75 532,193.75 589,387.50 1/15/2031 49,475.00 49,475.00 7/15/2031 490,000 3.250 49,475.00 539,475.00 588,950.00 1/15/2032 41,512.50 41,512.50 7/15/2032 505,000 3.750 41,512.50 546,512.50 588,025.00 1/15/2033 32,043.75 32,043.75 7/15/2033 525,000 3.750 32,043.75 557,043.75 589,087.50 1/15/2034 22,200.00 22,200.00 7/15/2034 545,000 4.000 22,200.00 567,200.00 589,400.00 1/15/2035 11,300.00 11,300.00 7/15/2035 565,000 4.000 11,300.00 576,300.00 587,600.00 TOTALS 7,220,000 2,206,812.50 9,426,812.50 9,426,812.50 Optional Redemption: January 15, 2020 PFM Financial Advisors LLC 7/2/2019
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UPPER DUBLIN TOWNSHIP RESTRICTED YIELD ESCROW 1 2 3 4 5 6 7 8 9 10 SERIES OF 2014 Optional Redemption Date: January 15, 2020 SETTLE 10/17/2019 Escrow Date Principal Interest Agent Required Par Coupon Earnings Cash Flow Balance 1/15/2020 7,220,000.00 108,737.50 7,328,737.50 7,290,091.00 2.150 38,647.47 7,328,738.47 0.97 TOTALS 7,220,000.00 108,737.50 0.00 7,328,737.50 7,290,091.00 38,647.47 7,328,738.47 Actual Escrow Yield 2.445451 Actual Escrow Cost 7,290,091.00 Maximum Escrow Yield (Yield on new Bonds) 2.654931 Perfect Escrow Cost 7,281,641.11 Difference (8,449.89) *Depending on current market conditions at time of pricing, escrow may be gross funded with securities purchased at settlement. ESCROW REQUIREMENTS ESCROW EARNINGS* PFM Financial Advisors LLC 7/2/2019
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UPPER DUBLIN TOWNSHIP SERIES OF 2019 Settle 10/17/2019 REFUNDS THE SERIES OF 2014 Dated 10/17/2019 1 2 3 4 5 6 7 8 Semi-Annual Fiscal Year Existing Date Principal Rate* Interest Debt Service Debt Service Debt Service Savings 43,661.00 1/15/2020 46,102.71 46,102.71 7/15/2020 255,000 2.190 94,301.00 349,301.00 395,403.71 587,475.00 192,071.29 1/15/2021 91,508.75 91,508.75 7/15/2021 405,000 2.200 91,508.75 496,508.75 588,017.50 590,075.00 2,057.50 1/15/2022 87,053.75 87,053.75 7/15/2022 415,000 2.210 87,053.75 502,053.75 589,107.50 592,475.00 3,367.50 1/15/2023 82,468.00 82,468.00 7/15/2023 420,000 2.220 82,468.00 502,468.00 584,936.00 589,675.00 4,739.00 1/15/2024 77,806.00 77,806.00 7/15/2024 430,000 2.260 77,806.00 507,806.00 585,612.00 585,787.50 175.50 1/15/2025 72,947.00 72,947.00 7/15/2025 445,000 2.310 72,947.00 517,947.00 590,894.00 591,287.50 393.50 1/15/2026 67,807.25 67,807.25 7/15/2026 450,000 2.370 67,807.25 517,807.25 585,614.50 590,912.50 5,298.00 1/15/2027 62,474.75 62,474.75 7/15/2027 460,000 2.450 62,474.75 522,474.75 584,949.50 589,650.00 4,700.50 1/15/2028 56,839.75 56,839.75 7/15/2028 470,000 2.520 56,839.75 526,839.75 583,679.50 587,687.50 4,008.00 1/15/2029 50,917.75 50,917.75 7/15/2029 485,000 2.590 50,917.75 535,917.75 586,835.50 589,337.50 2,502.00 1/15/2030 44,637.00 44,637.00 7/15/2030 495,000 2.660 44,637.00 539,637.00 584,274.00 589,387.50 5,113.50 1/15/2031 38,053.50 38,053.50 7/15/2031 510,000 2.710 38,053.50 548,053.50 586,107.00 588,950.00 2,843.00 1/15/2032 31,143.00 31,143.00 7/15/2032 525,000 2.770 31,143.00 556,143.00 587,286.00 588,025.00 739.00 1/15/2033 23,871.75 23,871.75 7/15/2033 540,000 2.820 23,871.75 563,871.75 587,743.50 589,087.50 1,344.00 1/15/2034 16,257.75 16,257.75 7/15/2034 555,000 2.870 16,257.75 571,257.75 587,515.50 589,400.00 1,884.50 1/15/2035 8,293.50 8,293.50 7/15/2035 570,000 2.910 8,293.50 578,293.50 586,587.00 587,600.00 1,013.00 TOTALS 7,430,000 1,764,562.71 9,194,562.71 9,194,562.71 9,426,812.50 232,249.79 Present Value of 10 bps 57,047.27 Savings as % of refunded principal 3.22% *Assumes estimated interest rates. Actual rates would be determined at time of pricing. PFM Financial Advisors LLC 7/2/2019
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UPPER DUBLIN TOWNSHIP SERIES OF 2019 Estimated Composition of the Issue SOURCES: Bonds 7,430,000.00 OIP(OID) 0.00 Total 7,430,000.00 USES: Cost of the Escrow 7,290,091.00 Underwriter's Discount $8.00 59,440.00 Bond Insurance 0 bps 0.00
75,000.00 Miscellaneous Expenses/Rounding 5,469.00 Total 7,430,000.00 Dated Date 10/17/2019 0.49 Settlement Date 10/17/2019 0.49 Yield of the Issue 2.654931 PFM Financial Advisors LLC 7/2/2019
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Disclosures: PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide or give a specific
Public Financial Management Inc. Both are registered municipal advisors with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) under the Dodd-Frank Act of 2010. Investment advisory services are provided by PFM Asset Management LLC which is registered with the SEC under the Investment Advisers Act of 1940. Additional applicable regulatory information is available upon request. Swap advisory services are provided by PFM Swap Advisors LLC which is registered as a municipal advisor with both the MSRB and SEC, a commodity trading advisor with the Commodity Futures Trading Commission, and a member of the National Futures Association. Consulting services are provided through PFM Group Consulting LLC. PFM financial modeling platform for strategic forecasting is provided through PFM Solutions LLC. For more information regarding PFM’s services or entities, please visit www.pfm.com. The information and any analyses contained in this presentation are taken from, or based upon, information obtained from the recipient or from publicly available sources, the completeness and accuracy of which has not been independently verified, and cannot be assured by PFM. The information and any analyses in these materials reflect prevailing conditions and PFM’s views as
are set forth herein, they may be based on estimated financial performance prepared by or in consultation with the recipient and are intended only to suggest reasonable ranges of
may vary based upon market conditions at the time of pricing. The printed presentation is incomplete without reference to the oral presentation or other written materials that supplement it. To the extent permitted by applicable law, no employee or officer of PFM’s financial advisory business, nor any of PFM’s affiliated companies, accept any liability whatsoever for any direct or consequential loss arising from negligence or from any use of this presentation or its contents. Any municipal financial product or financial strategy referenced may involve significant risks, including, but not limited to: market, interest rate, or credit risk, and may not be suitable for all clients. The ultimate decision to proceed with any transaction rest solely with the client.
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