At the June 20th Community Development Corporation meeting, a parameters resolution was approved authorizing the issuance of Sales Tax Revenue Refunding Bonds, Taxable Series 2016. The bond issue is expected to be in the approximate amount of $30,275,000.
The bonds are for the purpose of providing funds to refund the 2006 and 2008 outstanding sales tax revenue bonds of the CDC. All refunded bonds will be called for redemption or defeasance in accordance with the legal documents authorizing their issuance. All refunded bonds will be called at a price equal to 100% of the par value.
The total cumulative gross savings from the bond issue is expected to be approximately $6,845,489 and the Net Present Value savings is expected to be approximately $4,458,124. The Net Present Value takes into consideration the time value of money and the structuring or timing of the future debt service. The savings of $4,458,124 represents 14.725% of the prior issue. The expected savings are still substantial enough to proceed with the refunding issue.
The interest rates today are significantly less than the rates on the existing revenue bonds. The existing interest rates range from 4.5% to 6%. The anticipated interest rates for the refunding bonds range from 1.01% to 3.65%. The existing bond issues mature in 2019 and 2032 and the proposed issue keeps 2032 as the maturity date.
The sale is expected to be conducted on August 16th. The bond closing is scheduled for September 8th. The Resolution attached approves the Resolution that authorized issuance of the bonds by the CDC Board.
Also attached is the Paying Agent/Registrar agreement with Bank of New York Mellon.