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Finance adviser outlines plan to refund 2015 COPs; board to consider resolution next month
Summary
RBC Capital Markets told the board it can refinance District 49’s Series 2015 certificates of participation at current market rates, producing estimated annual savings of $128,000–$170,000 and present-value savings near $2 million. The board did not vote; staff said a resolution will be presented at a future meeting.
RBC Capital Markets presented a potential refinancing of District 49’s Series 2015 certificates of participation and recommended pursuing a refunding that could generate annual savings and reduce outstanding principal.
Todd Sneidow, managing director with RBC Capital Markets, told the board that the 2015 COPs reach a 10-year call date on Dec. 15 and that the district can issue refunding COPs and use the proceeds to redeem the 2015 series. Sneidow estimated annual cash‑flow savings of roughly $128,000 to $170,000 and an aggregated present‑value savings of about $2 million; he said current market conditions put the district near roughly 4% present‑value savings, exceeding the Government Finance Officers Association’s 3% guideline for economic benefit.
Board members asked practical financing questions. Sneidow said the proposed refunding would reduce the par amount outstanding (from about $50.5 million currently callable to an issuance of roughly $47 million) because market premium proceeds would help fund the redemption; he said the refunding would not extend the final maturity date beyond the current 2039 final retirement date. The presentation recommended returning to the board next month with a formal resolution and financing schedule.
The board did not take action at the Oct. 9 meeting; administration said it would bring a resolution for action at the next meeting if the board had no objections to proceeding with preliminary steps.
