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New Prague EDA approves presale resolution to pursue $10.13 million lease revenue bond
Summary
The New Prague Economic Development Authority voted to move forward with a presale for an EDA lease revenue bond Series 2025C totaling $10,130,000, approving a 30-year structure with a call feature at year nine to allow future refinancing if interest rates fall.
The New Prague Economic Development Authority voted to move forward with a presale resolution seeking a $10,130,000 lease revenue bond to finance an unspecified facility lease arrangement between the EDA and the city.
Chair (speaker 1) opened discussion and referred the presale report to Keith (speaker 2), who summarized the proposed Series 2025C issue and its terms. Keith said the bond would be issued for a 30-year term with a built-in call feature in year nine to permit refinancing of maturities past year nine if the EDA can secure lower interest rates in the future.
"We're issuing it for 30 years, but we're gonna build in a call feature in year 9," Keith said, explaining the refinance option.
Keith told members the anticipated true interest cost was "just over 5%" but noted other competitively bid EDA lease revenue issues represented by his firm had recently seen lower rates. He also explained that because the par amount will exceed $10,000,000 the issue cannot be designated as bank qualified (BQ), which affects the investor pool.
A member asked whether the issue could be restructured under $10 million to achieve BQ status; Keith replied the city had already issued debt earlier this calendar year so the combined planned issuance would exceed the $10 million threshold.
A motion by a committee member to move forward with the presale resolution (as read) was seconded by the chair. The EDA voted in favor with no opposition and the motion carried.
The presale report put the anticipated sale on October 8, with closing and wire transfers to the EDA expected later in October following preparation of closing documents by bond counsel. Keith said continuing disclosure responsibilities would be handled by city staff and the finance director, as is current practice for outstanding city debt.
The EDA approved proceeding with the presale resolution; the resolution identifier was read during the meeting (stated in the transcript as resolution 25 0 9 1 0 0 1). The record in the transcript shows unanimous verbal approval, but specific vote counts were not specified.
The next procedural steps stated in the meeting were to continue drafting a lease agreement between the city and the EDA and to proceed with the competitive sale schedule outlined in the presale materials.
