HomeMy WebLinkAboutItem No 4 PPP 10-13-2021 Administration Committee - Refunding Revenue Obligations Soong10/11/2021
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Refunding of Wastewater
Refunding Revenue Obligations
Series 2012A and Series 2012B
Presented by:
Ed Soong
Public Resources
Advisory Group
Administration
Committee
October 13, 2021
Refunding Candidates
Series
Maturity
(February 1) Principal ($) Coupon (%)
2012B 2023 1,605,000 4.00
2012B 2024 1,630,000 3.00
2012B 2025 1,715,000 3.00
2012B 2026 1,720,000 3.00
2012A 2031 28,990,000 3.00
2012A 2032 29,055,000 4.00
2012A 2033 42,600,000 4.00
$100,645,000 of Series 2012A and $6,670,000 of Series
2012B are subject to optional redemption on the call
date (February 1, 2022)
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Refunding Opportunity
Current yields are substantially less than existing coupons
Without refunding, OC San will unnecessarily continue to
pay higher than market coupons starting on the call date
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Existing Coupon Current Yields
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Refunding Structure
The refunding is expected to amortize principal with the
objective of producing level annual debt service savings
Final refunding maturity will match the 2033 final
maturity of the Series 2012A (no extension of final
maturity)
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Issuance Costs
Services Cost
Underwriters’ Discount (est.) $ 202,550
Bond Counsel and Expenses 121,000
Municipal Advisor 100,000
Rating Agencies 119,175
Trustee and Counsel 5,500
Printing 5,000
Digital Assurance Certification 2,500
The Bond Buyer 2,000
Contingency 9,825
Total: $ 567,550
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Potential Savings
OC San’s debt policy requires a minimum of 3% net
present value savings (of the refunding bond amount) for
refundings to achieve debt service savings
Under current market conditions, a refunding, net of all
costs, is estimated to produce $21.7 million of present
value savings (20.2% of refunding principal)
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Timing
Month(s) Activity
October/
November
Staff and consultants draft legal and disclosure
documents in preparation for refunding sale
December Board and Financing Corporation approves legal
and disclosure documents
Request credit ratings
January Receive credit ratings
Marketing and sale through competitive process
February Closing
Redeem callable Series 2012A and Series 2012B
Begin debt administration
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Questions
?
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