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HomeMy WebLinkAboutItem No 4 PPP 10-13-2021 Administration Committee - Refunding Revenue Obligations Soong10/11/2021 1 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) 2 1 2 10/11/2021 2 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 3 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) 4 3 4 10/11/2021 3 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 5 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) 6 5 6 10/11/2021 4 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 7 Questions ? 8 7 8