Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance Bonds topic
No spam. Unsubscribe anytime.
City finance advisor outlines potential refunding of 2016 general obligation bonds; possible near-term savings
Summary
Davenport presented an analysis showing potential net savings of roughly $700,000 on a refinancing of about $19 million of the city's 2016 GO bonds; staff said the public-market sale could be priced Nov. 17, with final approval and closing to follow if the Commission directs staff to proceed.
Davenport & Company presented a market update to the Decatur Commission on Nov. 3 and recommended pursuing a public-market refunding of a portion of the city's 2016 general obligation bonds tied to school projects. The advisor said short-term tax-exempt municipal rates have declined enough that refinancing $19.2 million of maturities could yield net present value savings of about 3.5% (roughly $700,000–$735,000 net of closing costs in current market assumptions).
Doug Gephardt, Davenport's representative, explained that only certain maturities are callable now and that the city can pursue a competitive underwriter sale; pricing was anticipated on Nov. 17 with potential closing Dec. 18. He and commissioners discussed how realized savings flow to the city's debt-service fund and noted that such savings typically do not change the millage rate because debt service is paid from dedicated funds.
Commissioners asked about the scope (about $19M considered for refunding of the broader $56M outstanding) and whether bank loans vs. public-market sales were preferable; Davenport recommended the public market under current conditions. Staff indicated they would proceed with the final technical decisions and return with formal approval language and a recommendation.
