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HomeMy WebLinkAboutPort Arthur 2012 Refunding Analysis - DRAFT Joseph Morrow, Senior Vice President joe.morrow@firstsw.com 700 Milam, Suite 500 Houston, Texas 77002 Phone 713.654.8690 Fax 713.654.8658 Refunding Analysis March 6, 2012 Port Arthur, Texas Refunding Opportunity – Target Bonds Maturity Interest Par Call Call Series Date Type Rate Amount Date Price 2002A 2/15/2013 Serial 3.600% $ 735,000 5/3/2012 100% 2/15/2014 Serial 3.700% 760,000 5/3/2012 100% 2/15/2015 Serial 3.850% 790,000 5/3/2012 100% 2/15/2016 Serial 3.900% 820,000 5/3/2012 100% 2/15/2017 Serial 4.000% 855,000 5/3/2012 100% 2/15/2018 Serial 4.100% 890,000 5/3/2012 100% 2/15/2019 Serial 4.100% 925,000 5/3/2012 100% 2/15/2020 Serial 4.150% 965,000 5/3/2012 100% 2/15/2021 Serial 4.200% 1,005,000 5/3/2012 100% 2/15/2022 Serial 4.200% 1,050,000 5/3/2012 100% $ 8,795,000 2002B 2/15/2013 Serial 4.450% $ 835,000 5/3/2012 100% 2002C 2/15/2013 Serial 4.250% $ 245,000 5/3/2012 100% P O R Total Par Refunded $9,875,000 T A R T H U R ,  All maturities are currently callable and can be redeemed on any date given proper notification period to paying agent and bondholders. T X 2 Member FINRA & SIPC © 2011 First Southwest Company Market Conditions 6.50 Historical Interest Rates General Obligation "Bond Buyer's" Index Over Past 10 Years As of 2/23/12 4.50 5.00 6.00 Current BBI:3.69% 4.00 5.00 5.50 3.00 3.50 4.00 4.50 P O R 3.50 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 T A R T H U R , T X 3 Member FINRA & SIPC © 2011 First Southwest Company Refunding Results *  Non-Bank Qualified, Uninsured Market Rates as of February 23, 2012  Present Value Savings are 6.97% of the Refunded Bonds par amount  $79,135 Projected Average Annual Savings Present Value to 04/26/2012 Date Prior Debt Service Prior Receipts Prior Net Cash Flow Refunding Debt Service Savings @2.5442389% 9/30/2012 199,758.75 121,942.08 77,816.67 77,816.67 -(1,005.84) 9/30/2013 2,177,502.50 -2,177,502.50 2,101,066.11 76,436.39 7 3,896.55 9/30/2014 1,071,427.50 -1,071,427.50 993,326.11 78,101.39 7 3,739.86 9/30/2015 1,072,160.00 -1,072,160.00 992,087.78 80,072.22 73,831.75 9/30/2016 1,070,962.50 -1,070,962.50 990,549.44 80,413.06 7 2,400.00 9/30/2017 1,072,872.50 -1,072,872.50 993,665.00 79,207.50 6 9,634.57 9/30/2018 1,072,527.50 -1,072,527.50 991,426.67 81,100.83 6 9,649.22 9/30/2019 1,070,320.00 -1,070,320.00 989,738.33 80,581.67 6 7,550.79 P O R 9/30/2020 1,071,333.75 -1,071,333.75 992,623.33 78,710.42 64,414.11 9/30/2021 1,070,205.00 -1,070,205.00 989,677.50 80,527.50 6 4,352.11 9/30/2022 1,072,050.00 -1,072,050.00 995,843.33 76,206.67 5 9,467.28 12,021,120.00 121,942.08 11,899,177.92 11,107,820.27 791,357.65 6 87,930.40 T A R T H U R , T X 4 *Preliminary, subject to change. Member FINRA & SIPC © 2011 First Southwest Company Parameter Sale  Council delegates final pricing authority to Price Officer(s)  Council establishes bond sale parameters:  Maximum Interest Rate  Minimum Savings Threshold for Refunding  Aggregate Principal Amount of Issue  Final Maturity Date  Expiration of Delegated Authority  6 Months  Pricing Officer(s) can only approve sale if Council parameters are met P O R  Reason for Parameter Bond Sale = FLEXIBILITY  Bond issue is in “Day-to-Day” mode meaning that bonds can be priced at any time and in an interest rate environment that is advantageous rather than being locked into pricing on the T A R T H U R , date of a Council meeting. T X 5 Member FINRA & SIPC © 2011 First Southwest Company Proposed Timetable* S M T W T F S S M T W T F S S M T W T F S 1 2 3 4 1 2 3 1 2 3 4 5 6 7 5 6 7 8 9 10 11 4 5 6 7 8 9 10 8 9 10 11 12 13 14 12 13 14 15 16 17 18 11 12 13 14 15 16 17 15 16 17 18 19 20 21 19 20 21 22 23 24 25 18 19 20 21 22 23 24 22 23 24 25 26 27 28 Feb-12 Mar-12 Apr-12 Completion Date Event Responsibility Tues -Feb 28 PDF of Presentation to City for Packet inclusion FA Unaudited City Financials available City 26 27 28 29 25 26 27 28 29 30 31 29 30 Thurs -Mar 1 Circulate Draft of Preliminary Official Statement (POS) FA Tues -Mar 6 City Council Meeting: City FY2011 Audit Approved Refunding Presentation to Council Wed -Mar 7 Comments due on 1st Draft of POS FWG Thurs -Mar 8 Mail Credit Packages to rating agency and insurance company FA Fri -Mar 9 Circulate 2nd Draft of POS FA Week of Mar 12 Rating Call City, FA Thurs -Mar 15 Comments due on 2nd Draft of POS FWG Tues -Mar 20 City Council Meeting: City Approve sale parameters, Select Underw riter, Adopt Ordinance P O R Authorize preparation of Official Statement (OS) after aw ard Wed -Mar 21 Circulate Final Draft of POS (UW Counsel) FA Thurs -Mar 22 Receive Rating FA Mon -Mar 26 Final Comments due on POS FWG Print and Distribute POS FA T A R T H U R , Thurs -Mar 29 ***Potential Pricing Date*** Pricing Officer Aw ards Bonds to Underw riters City Fri -Mar 30 Circulate draft of OS FA Tues -Apr 3 Submit transcript of proceedings to Attorney General BC Wed -Apr 4 Comments due on OS FWG, UW Thurs -Apr 5 Print and mail OS FA Thurs -Apr Circulate FA T X 6 *Preliminary, subject to change. 19 Closing Memo Thurs -Apr 26 Closing FWG, UW