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Committee approves parameters to seek State Bond Commission approval to refinance 2016 bonds
Summary
The committee approved applying to the State Bond Commission for parameters to refund outstanding 2016 bonds, with presenters estimating potential net savings after fees and asking for flexibility up to $13,455,000 to execute the transaction if market conditions allow.
The finance committee voted to forward a resolution to apply to the State Bond Commission for authority to refund outstanding series 2016 bonds.
Wes Shatto, a public finance attorney working the transaction, and Marcus Lambert of DA Davidson described the request as preliminary approval to allow the district to pursue refinancing while the bonds are callable. Lambert said market conditions appear favorable and the proposed parameters would give the bond commission flexibility; presenters said the not-to-exceed amount being requested is $13,455,000.
Lambert estimated that if the district sold bonds under current conditions it might issue roughly $6.5 million in bonds and could realize about $425,000 in debt-service savings, roughly 6% of the affected debt, with any fees deducted from net savings. He emphasized that the savings figures are net of transaction costs and that the bond commission will judge the transaction’s net benefit.
Board members asked whether the refinancing would lock the district into another long call period, whether upfront fees (points) would negate savings, and whether the presenters had an ongoing role monitoring transactions. Presenters said call periods can be structured (5, 8 or 10 years), net savings account for fees, and DA Davidson routinely monitors clients’ debt and markets for opportunities.
A motion to approve the parameters and forward the application to the State Bond Commission was made by Mr. DeHart and seconded by Mr. LeGarde; the committee recorded no objections and approved forwarding the recommendation.
Provenance: presentation began SEG 553 and concluded SEG 891.
