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TO: |
Local Advisory Council |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, Chief Financial Officer |
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PRESENTER(S): |
Viola Miller, Chief Financial Officer |
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Rob Lamph, Assistant Treasurer |
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Brian Baker, Zions Bank |
TITLE:
title
Consultation on Issuance and Sale of the Authority’s Sales Tax Revenue Refunding Bonds
end
AGENDA ITEM TYPE:
LAC - Consultation
RECOMMENDATION:
The Local Advisory Council is encouraged to provide feedback to the Authority’s Board of Trustees on the opportunity to issue bonds for the purpose of refunding 2009 and 2010 Build America Bonds.
BACKGROUND:
UTA currently has 2009 and 2010 Build America Bonds (BABs) totaling $461,450,000 of refundable par. These bonds pay an annual subsidy. Recent Federal government actions have reduced the amount of the subsidy paid.
DISCUSSION:
Current market conditions may allow UTA to refinance the BABs by issuing tax-exempt bonds, potentially achieving overall debt savings. If the Board authorizes refinancing of the BABs, UTA would reduce the risk of future subsidy reductions. UTA could also have a future opportunity to refinance the new bonds at a lower rate to achieve additional savings. In addition to the proposal to refinance the BABs, UTA may also have an opportunity to present a tender offer and a make whole call on additional bonds to achieve more near-term savings (2025-2029).
Staff and a representative from Zions Public Finance will meet with the Council at the May 22nd meeting to discuss current market conditions and projected savings opportunities. The proposal will then proceed to a future Board of Trustees meeting for their final consideration.
ALTERNATIVES:
The Authority could not refinance the 2009 and 2010 BABs, not tender bonds, or exercise a make whole call.
FISCAL IMPACT:
Approximate debt service savings of $24.4 million over 19 years.
ATTACHMENTS:
None