bond refunding update march 23, 2015. discussion topics i.bond market update ii.bond refunding goals...
TRANSCRIPT
Bond Refunding Update
March 23, 2015
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Discussion Topics
I. Bond Market UpdateII. Bond Refunding GoalsIII. Preliminary Refunding ResultsIV. Next Steps
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I. Bond Market Update
Bond interest rates remain near historic lows but volatility has increased recently due to:• Continued global
economic uncertainty• Strong investor demand• Long-awaited U.S.
economic recovery is slow to arrive
• Looming Federal Reserve action to raise rates
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Historic Tax-Exempt Bond Rates
Bond Buyer 20 GO Index
3.000%
3.500%
4.000%
4.500%
5.000%
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
% R
ate
Years
Market Yield CurveMunicipal Market Data Index
Year Ago Month Ago Week Ago Current
II. Bond Refunding Goals
Evaluate and potentially refund a portion of the District’s 2005 UTGO Bonds, if a refunding would result in significant interest savings for taxpayers Tax-exempt bonds Minimum present value savings of 3.00% Target savings to smooth future bond tax rates where possible Minimize savings in the years for which the bond levy has already been
set Utilize existing funds available in the Debt Service Fund as appropriate
Utilize a negotiated bond sale to best accomplish the District’s goals while providing the lowest cost of borrowing
Navigate potential issues from the Federal debt ceiling
Renew the District’s credit rating from Moody’s Investors Service
Participate in the Washington State School District Credit Enhancement Program (“State Guarantee Program”)
III. Preliminary Refunding Results
Refunding Bond Candidates
Bonds Issued: 2005Principal Amount of refunded bonds:
$2,640,000
Callable Maturities: 2016-2024Average Coupon: 3.36%Call Date: 12/1/2015
Preliminary Refunding Results
Preliminary Results
Date of Analysis 3/18/15Dated Date of Refunding 4/21/15Maturities Included 2016-2024Principal Amount of New Bonds $2,560,000Call Feature Non-callableFinal Maturity 12/1/24True Interest Cost 1.98%Total Savings – Net of costs $232,134Present Value of Net Savings $214,926PV as % of Old Bonds 8.14%
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III. Next Steps
Date Event Responsibility
March 2015 Establish bond sale goals District, FA, UW
March 23Brief Board on bond sale planningBoard consideration of bond resolutionRating presentation
District, BC, FA
District, FA
March 23-April 14 Prepare bond legal and disclosure documents All
April 21* Conduct bond sale All
April 27 Brief Board on bond sale results District, FA
May 19* Bond closing BC, UW, County
* Preliminary