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City financial advisor recommends refinancing taxable bonds and launching a $70M general obligation program
Summary
Davenport & Company briefed council on a not-to-exceed $70M general obligation bond program (59M tax-exempt, 11M taxable) and recommended refinancing $8.4M of outstanding taxable bonds with a SunTrust proposal at 4.75%, which would yield net savings 'slightly above $630,000' and require closing by Feb. 28 to meet the existing note’s refinancing window.
David Rose of Davenport & Company told council the proposed program includes a not-to-exceed $70,000,000 general obligation authorization and a taxable refunding tranche. He said local banks returned three comparable bids to refinance roughly $8.4 million of outstanding taxable general obligation bonds (final maturity March 2014) and recommended proceeding with SunTrust’s guaranteed 4.75% rate; "the total savings to the city net of all costs is just slightly above $630,000," Rose said, translating to roughly $70,000 a year through 2014.
Rose also explained that $11 million of the $70 million would be issued on a taxable basis by negotiated sale and that timing constraints require a closing by Feb. 28 to satisfy the existing note’s once-per-year refinancing clause and the 30-day notice requirement to the current holder. Council agreed to receive the briefing this afternoon and to consider the formal vote at the evening session.
