DATE: July 6, 2016
TO: Council Budget and Finance Committee
FROM: Acting Director of Finance
SUBJECT
Title
Refinancing of Outstanding 2007 Certificates of Participation (Civic Center and Capital Projects)
End
DISCUSSION
Refinancing of Outstanding 2007 Certificates of Participation (Civic Center and Capital Projects)
On June 29, 2016, the City refinanced the entire balance of $19,425,000 of its 2007 Refunding Certificates of Participation (Civic Center and Capital Projects) by issuing the 2016 Refunding Certificates of Participation (2016 COPS). The 2016 COPS were issued as a private placement with CoBiz Public Finance. The City chose to use a private placement for the 2016 COPS to achieve significant cost savings by avoiding the need to take the bonds out for a “public offering,” while still receiving an interest rate well below the projected market rate of such an offering. The remaining years of the refinanced 2007 COPS carried an interest rate of 4-4.25%, while the 2016 COPS have an interest rate of just more than 2.6%. The refinancing has created a cost savings over the remaining life of the debt of more than $1.5 million.
Recent Credit Affirmation
The City recently underwent a routine re-rating by Fitch Ratings. The City’s Issuer Default Rating of AA+ was affirmed with a Rating Outlook of Stable. The re-rating also covered two specific debt issuances of the City, the 2007 COPS mentioned above and the 2015 Measure C COPS; both were affirmed as AA. These affirmations demonstrate the sound budget and financial practices and tremendous leadership provided by Council.
Staff contact
Prepared and Recommended by: Dustin Claussen, Acting Director of Finance
end
Approved by:
Fran David, City Manager