HomeMy WebLinkAboutRESULTS OF BOND SALE, GENERAL OBLIGATION REFUNDING BONDS, SERIES 2019 INTEROFFICE MEMORANDUM
Date: June 28, 2019
To: The Honorable Mayor and City Council
Through: Rebecca Underhill, Interim City Manager
From: Kandy Daniel, Interim Finance Director
RE: Results of Bond Sale. General Obligation Refunding Bonds, Series 2019
The City's Series 2008 and 2010 General Obligation Bonds were refinanced on June 18, 2019.
The sale resulted in a gross savings to the City of$881,821 which exceeded the estimated
savings discussed with City Council in March. Please see the attached transaction summary as
prepared by Anne Burger Entrekin of Hilltop Securities.
CITY OF PORT ARTHUR,TEXAS REFUNDING RESULTS SUMMARY
On March 26, 2019,the Port Arthur City Council approved a parameters bond sale ordinance for a
refinancing of its Series 2008 and 2010 General Obligation Bonds in the aggregate principal amount of
$10,270,000. Hilltop Securities,financial advisor and Holland &Knight, bond counsel, worked in a
collaborative process with City Staff to prepare the required documentation and undertake the rating
agency process with Standard & Poor's. The City's existing Standard &Poor's rating of A+was
reaffirmed after an in-depth process including a question and answer conference call with additional
requested information provided.
The pricing was conducted on Tuesday,June 18th. Below please find the pricing results as compared to
the projections that were included in the City Council presentation on March 26th
City Council Presentation Pricing Results Improvement
March 26, 2019 June 18, 2019 of Actual
Market Rates Over 3/26/19
+25 bps Market Rates Actual Market Rates
Par Amount of Bonds $ 9,855,000 $ 9,715,000 $ 9,120,000 $ (595,000)
Gross Savings $ 620,194 $ 764,044 $ 881,821 $ 117,777
Net Present Value Savings $ 590,572 $ 730,515 $ 838,311 $ 107,796
NPV Savings as a%of Refunded Bonds 5.750% 7.113% 8.162% 1.049%
True Interest Cost 2.750% 2.502% 2.140% -0.362%
The underwriters on the transaction were Raymond James and Loop Capital. The Bonds are insured by
Assured Guaranty. The transaction is expected to close on July 11, 2019 with the 2008 and 2010 Bonds
to be redeemed and paid off on July 22, 2019.