Title
Order Authorizing The Sale And Issuance By The City Of Greensboro, North Carolina Of Not To Exceed $32,000,000 Combined Enterprise System Revenue Refunding Bonds, Series 2016 And Authorizing The Execution And Delivery Of Certain Documents In Connection Therewith
Body
Department: Finance and Legal
Council District: All
Public Hearing:
Advertising Date/By:
Contact 1 and Phone: Richard Lusk, Finance Director, 373-2077
Contact 2 and Phone: Tom Carruthers, City Attorney, 373-2320
PURPOSE:
To approve the attached bond order authorizing the issuance and sale of up to $32.0 million Combined Enterprise (water and sewer) Revenue Refunding Bonds on or about January 14, 2016 to refinance an outstanding bond anticipation note.
BACKGROUND:
On November 16, 2015, the City Council, by resolution, authorized the filing of an application with the N.C. Local Government Commission requesting approval of the issuance of up to $32.0 million Combined Enterprise System (Water & Sewer) Revenue Refunding Bonds. The Commission is expected to approve sale of the Series 2016 Bonds on January 5, 2016.
The proposed bond issue consists of refinancing a $30.0 million Revenue Bond Anticipation Note (BAN) issued February 2014 under an interest-only construction draw program. Based on current market conditions the City projects issuing in January 2016, $26.4 million in bonds and receiving $4.0 million in bond premiums totaling $30.4 million. The revenue bonds are expected to have an average fixed interest cost of less than 4.00% over their 30-year term. The revenue bonds will be issued pursuant to a supplemental trust agreement with U.S. Bank (bond trustee) and a bond purchase agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Bank of America) and Loop Capital Markets LLC.
BUDGET IMPACT:
Bond proceeds of $30.4 million will be sufficient to pay off the outstanding note and bond issuance expenses. Annual debt service on the revenue refunding bonds will be paid from the Water Resources Fund budget, projected at $1.7 million annually over the next 30 years.
RECOMMENDATION / ACTION REQUESTED:
The Finance and Legal Departments recommend approval of the attached bond order authorizing the issuance and sale of up to $32.0 million Series 2016 Combined Enterprise System Revenue Refunding Bonds.
COMMITTEE ACTION: This item was referred to Council by the General Government Committee.