08-12-2014 Leasing Corporation Meeting
Agenda Item #1

Refunding of the District's Outstanding 2006A Certificates of Participation


District staff, along with the District's Financial Advisor, RBC Capital Markets and the District's financing team have been closely monitoring interest rates and market conditions since our most recent 2013A/B refunding issues, dated April 2013. Since that time, we have continued to encounter a very low interest rate environment and a flattening yield curve which continues to work in our favor for realizing additional savings to refund the 2006A certificates. As you will recall, we refunded certain portions of the 2006A certificates with the 2013 refunding at a net present value (NPV) savings greater than 5%. The remaining outstanding 2006A certificates were not refunded at that time as they did not achieve out NPV savings goal of greater than 3%.

While no one can predict how long this market trend will continue, consensus seems to be that interest rates will remain at these low levels for only a short period of time based on predictions from current economic data and market expectations. The Federal Reserve has taken actions that are predicted to increase interest rates by no later than the end of the calendar year. Based on current market conditions, our analysis shows that the District can achieve approximately $2.5-$3.0 million in NPV savings, which equates to a savings range of 4.5-5.0%. Based on guidance provided by the Government Finance Officers Association (GFOA), a 3% NPV savings threshold is considered a best practice.

District staff is requesting the Board to delegate authority to the Superintendent to authorize the Financial Services team to move forward with the refunding at such time that all legal documents are prepared and the market conditions are in place to allow the District to achieve at least a 3% NPV savings. Legal documents, along with the authorizing resolution, will be presented at the August 12 Board meeting. We will also provide an updated estimate of the NPV and will keep you apprised of the anticipated savings as we approach the issuance date.

After careful consideration and lengthy discussions with the District's Financial Advisor and Finance team, staff is recommending the following Underwriting Team: Wells Fargo Securities; CitiGroup Global Markets Inc.; Raymond James/Morgan Keegan; and Stifel, Nicolaus and Company, Incorporated. This recommendation is due to their continued relationships and the ongoing services they have provided to the District since the 2007 COP issues. We are also recommending the continued services of Bryant Miller Olive and the Bond and Disclosure Counsel, along with RBC Capital Markets as the District's Financial Advisor.

Approve the delegation of the Superintendent to authorize the Financial Services team to move forward with the refinancing plan at the optimum time that allows the District to achieve at least a 3% net present value savings. Approve members of the Financing Team, to include the Financial Advisor, Bond and Disclosure Counsel and the Underwriting Team as delineated above.

Meeting Date(s)
Action - 8/12/2014

Authority for Action
F.S. Chapter 1001, 1003, 1013

Involves Expenditure of Funds Directly in the Classroom

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

Cost Center


Jo Ann Clark, Director of Accounting Services, ext. 660

Judy Preston, Associate Superintendent of Financial Services, ext. 600

Attachment:  2014 Leasing Corporation Resolution 8-5-14.pdf