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County staff begin work on potential refunding and bond tender to capture multi-million-dollar savings
Summary
County finance staff and bond counsel recommended preparing a parameters ordinance to allow a refunding of 2015 and 2016 bonds and a possible tender of 2020 taxable bonds; if market conditions hold, the county could realize an estimated net present value savings of roughly $3.6 million.
Will County staff reported a market opportunity to refinance outstanding bonds and potentially buy back (tender) taxable bondholders, and the Executive Committee approved preparing a parameters ordinance that would allow staff to act if market conditions meet specified savings thresholds.
What was presented: Wells Fargo and the county’s municipal advisors presented two complementary transactions: (1) a refunding of the Series 2015 and 2016 bonds at lower interest rates and (2) a tender offer for Series 2020 taxable bonds (an offer to repurchase bonds from current holders, financed by lower-cost new issuance). The advisors and county finance staff said the window is limited and that preparing a parameters ordinance now would preserve the county’s ability to act.
Estimated savings and costs: Staff reported the net present value (NPV) savings of the refunding at about $744,000 and the NPV savings of a tender transaction at about $2.9 million (assuming a 30% bondholder participation rate), for a combined NPV of roughly $3.6 million. The tender work requires hiring a tender agent and involves fixed transaction fees; staff noted a $12,800 tender-agent fee and other market-dependent costs.
Committee action and next steps: The Executive Committee authorized staff to draft a parameters ordinance (which would set minimum savings thresholds and other conditions) and bring the ordinance to Executive and then to the full County Board for approval. The ordinance would be valid for up to six months; if market conditions change the county is not obligated to proceed. Finance staff noted the work to prepare a transaction typically takes up to three months and emphasized that the market can shift quickly.
Ending: The committee directed staff and the county’s advisors to prepare the ordinance and to return with a finalized parameters ordinance for committee and full-board consideration. If approved and market conditions are favorable, the county could proceed to capture multi-million-dollar savings.
