Bond Refunding
Results
April 27, 2015
Discussion Topics
I.
II.
III.
IV.
Bond Market Update
Bond Refunding Goals
Refunding Results
Next Steps
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I. Bond Market Update
Bond interest rates remain near historic lows but volatility has increased recently due to:
–
–
–
Continued global economic uncertainty
Strong investor demand
Long-awaited U.S. economic recovery is slow to arrive
Bond interest rates are lower than when we began monitoring this refunding over the past year
Historic Tax-Exempt Bond Rates
14%
13%
5.000%
12%
4.500%
4.000%
11%
3.500%
4.00
3.000%
3.50
10%
9%
Market Yield Curve
Municipal Market Data Index
3.00
% Rate
8%
7%
6%
2.50
2.00
1.50
5%
1.00
4%
0.50
0.00
Bond Buyer 20 GO Index
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
3%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Years
Year Ago
Month Ago
Current
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II. Bond Refunding Goals
 Evaluate and potentially refund a portion of the District’s 2005 UTGO Bonds, if a
refunding would result in significant interest savings for taxpayers





Tax-exempt bonds
Minimum present value savings of 3.00%
Target savings to smooth future bond tax rates where possible
Minimize savings in the years for which the bond levy has already been set
Utilize existing funds available in the Debt Service Fund as appropriate
 Utilize a negotiated bond sale to best accomplish the District’s goals while
providing the lowest cost of borrowing
 Navigate potential issues from the Federal debt ceiling
 Renew the District’s “A1” credit rating from Moody’s Investors Service
 Participate in the Washington State School District Credit Enhancement Program
(“State Guarantee Program”)
III. Preliminary Refunding Results
Refunding Bond Candidates
Bonds Issued:
Principal Amount of refunded bonds:
Callable Maturities:
Average Coupon:
Call Date:
2005
$2,640,000
2016-2024
3.36%
12/1/2015
Preliminary Refunding Results
Final Results
Date of Analysis
Dated Date of Refunding
Maturities Included
Principal Amount of New Bonds
Call Feature
Final Maturity
True Interest Cost
Total Savings – Net of costs
Present Value of Net Savings
PV as % of Old Bonds
4/21/15
5/19/15
2016-2024
$2,600,000
Non-callable
12/1/24
1.75%
$261,031
$241,422
9.15%
Board Update
3/23/15
3/18/15
4/21/15
2016-2024
$2,560,000
Non-callable
12/1/24
1.98%
$232,134
$214,926
8.14%
III. Next Steps
Date
Event
Responsibility
March 2015
Establish bond sale goals
District, FA, UW
March 23
Brief Board on bond sale planning
Board consideration of bond resolution
Rating presentation
District, BC, FA
March 23-April 14
Prepare bond legal and disclosure documents
All
April 21
Conduct bond sale
All
April 27
Brief Board on bond sale results
District, FA
May 19*
Bond closing
BC, UW, County
District, FA
* Preliminary
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