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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, CFO |
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PRESENTER(S): |
Viola Miller, CFO |
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Troy Bingham, Comptroller |
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Brian Baker, Zion Public Finance |
TITLE:
title
R2023-07-06 - Resolution Authorizing (1) A Tender Offer for a Portion of the Authority’s Outstanding Bonds and (II) the Issuance and Sale by the Authority of its Sales Tax Revenue Refunding Bonds in the Aggregate Principal Amount of Not to Exceed $270,000,000 Related to the Tender Offer; and related matters
end
AGENDA ITEM TYPE:
Resolution
RECOMMENDATION:
The Board of Trustees approve resolution R2023-07-06 authorizing a tender offer for a portion of the Authority’s outstanding Federally Taxable Sales Tax Revenue Refunding Bonds from the 2019B, 2020B and 2016 series.
BACKGROUND:
A bond tender is an offer by UTA to purchase bonds from investors that are currently not callable and are currently worth less than other higher interest rate investments. Tendered bonds from the 2019B, 2020B and 2016 series would be purchased with the proceeds of a 2023 tax-exempt bond issue. In a bond tender, UTA would invite existing bondholders to “tender” their bonds at specified prices determined by UTA, its Municipal Advisor, and its Dealer-Manager.
State statutes governing UTA’s bond refunding require several steps. The initial discussions for this bond refunding started with the Board of Trustees and Local Advisory Council. The proposal was reviewed by the Trustees at their May 10th meeting, and the Local Advisory Council was consulted at their May 31st meeting with no additional advice received. UTA’s proposal was presented at the June 26th State Finance Review Commission meeting. The Commission approved the proposed UTA bond tendering, so UTA’s Board of Trustees may now act on a resolution to set terms of the potential tendering and authorize financial agents to carry out the process.
DISCUSSION:
UTA’s Municipal Advisor from Zion Public Finance will present the latest forecast for the tendering with the possible net present value savings and speculated interest rates in the market at the time of a new tax-exempt bond issue.
If approved by the Board, staff will work with Zions Public Finance (the municipal advisor), Gilmore Bell (bond counsel), and UTA’s underwriters to solicit current bond holders with the following parameters:
• Net Savings % need to exceed 5%
• Net Present Value Savings should exceed $6M*
• Tendering offers should only be to 2015A and 2016 tax exempt, and 2020, 2019B and 2020B taxable bondholders maturing debt prior to December 15, 2042
• Refunding bonds should not exceed the original tendered bond
• Time to perform the tendering should be a year
*The resolution provides an exception to the net present value savings parameter that authorizes a reduction up to 25% in the required net present value savings if at least two Board Officers were in agreement on the savings amount.
ALTERNATIVES:
Additional parameters could be set at this time.
FISCAL IMPACT:
Estimated savings to UTA of $6,000,000 or greater at this time.
ATTACHMENTS:
Resolution