OCII confirms up to $130 million refunding for Mission Bay South CFD to lock in savings

The Commission on Community Investment and Infrastructure on Nov. 7 confirmed the issuance of up to $130,000,000 in special tax refunding bonds for Community Facilities District 6 in Mission Bay South, a step staff said is intended to produce substantial debt-service savings and improve bond-market pricing.

John Daigle, OCII debt manager, told commissioners the action would refund five prior series (2005A, 2005B, 2013A, 2013B and 2013C). He said the plan moves the district from an unrated position to an A-minus underlying credit and, with a competitive insurance bid, could underwrite to an AA rating. Daigle described structural features including a 25% debt-service-reserve surety that reduces the need to cash-fund the reserve and noted underwriter feedback that recent market moves had improved the net present value savings beyond earlier estimates. "We're going to endeavor to get into the market with these bonds as soon as we can," Daigle said.

The commission approved the resolution authorizing the preliminary official statement and execution of a final official statement and related documents. Vice Chair Scott moved the motion; an unidentified commissioner seconded. The secretary recorded the vote as three ayes and one absent.

Why it matters: Refunding outstanding bonds can lower long-term interest costs for the CFD and reduce the burden on future special-tax revenues that repay the debt. OCII staff said the agency's debt policy requires at least 3% net present value savings, and that current pricing offered nearly three times that threshold.

Next steps: Staff said pricing was targeted for the next market window and that a final official statement would be executed once pricing was set.