03-10-2009 Regular School Board Meeting
Agenda Item #36


Title
Option Provision on $56,000,000 Certificates of Participation

Discussion

In March, 2008, the School Board successfully completed the issuance of $56,000,000 of Series 2008-A Certificates of Participation with a private placement buyer, Dexia Credit Local (Dexia).  The transaction was negotiated with a net interest cost of 4.985% and an average coupon of 5.05%.  The certificates mature in 2036 with a call option date effective July 1, 2018.

Dexia has recently approached district staff requesting that the District amend the 2008 Supplemental Trust Agreement to remove the call option date of July 1, 2018, and they have offered to pay a premium to the District in exchange for this amendment.  In Dexia's proposal dated March 6, 2009, the premium offer was calculated to be $6.57M based on market conditions at the time of calculation.  The District's Financial Advisor and District staff have reviewed Dexia's offer and believe it to be an exceptional opportunity for the District.  These monies could be used to benefit any of the projects in the capital fund.  

Should the Board approve the staff to pursue the negotiation of this transaction, the authorizing resolutions for the School Board and the Leasing Corporation along with other required legal documentation will be brought back to you at a later date for your approval.  Costs of issuance for this transaction are expected to be approximately $50,000 and will be paid from proceeds received from this transaction.



Recommendation
Authorize the Superintendent or his designee to negotiate the transaction with Dexia Credit Local and to execute the necessary documents required for this transaction.

Meeting Date(s)
Action - 3/10/2009

Authority for Action
FS Chapter 1001, 1003, and 1013

Involves Expenditure of Funds Directly in the Classroom
No

Source of Funding
Agenda Item will not Require the Expenditure of Funds

FY
Amount
Budgeted
Fund
Cost Center
Project
Function
Object
Program

Contact

Jo Ann Clark, Director of Accounting Services, x660
Just Preston, Associate Superintendent of Financial Services, x600