Travis County Commissioners Court
June 16, 2009,
Item 4
>> good afternoon, let's call back to order the voting session of the Travis County Commissioners court.
item no.
4 is posted for 1:30 today, let's call it up.
4.
consider and take action on an order authorizing the issuance and sale of Travis County, Texas, limited tax refunding bonds, series 2009, in the aggregate principal amount of approximately $34,200,000; levying a tax in payment thereof; authorizing the execution and delivery of a bond purchase agreement and an escrow agreement; approving the official statement; and enacting other provisions relating thereto.
good afternoon.
>> good afternoon, judge.
and Commissioners.
i'm lad patillo, your financial advisor.
we were able to accomplish this sale and refinancing of some of the outstanding county debt, all of these bonds are callable, so there's no need to
>> [indiscernible] in the future, they will be called immediately and paid in 30 days.
i believe the amount that we finished with was 31905?
>> correct.
>> 31,905,000.
with me today is the county's bonds counsel glen oppel and also don gonzalez with estrada hinojosa who the court -- we were able to go in the market yesterday and get it done.
i think it produces savings of about a million-206 that the county should take advantage of.
and don will give you a brief description of the details of the sale.
>> good afternoon, judge.
Commissioners.
>> good afternoon.
>> pleasure to be here today.
i want to say a special thanks for accommodating us for this afternoon.
one of the things that we were able to do yesterday was to go into the market and try to take advantage of those bonds that Travis County has outstanding and identify those for refundings and the ones that have been identified are listed on the bottom of page 2 of the presentation, I'm not going to go through all of them, but basically it was the 1994 a's through the 1999.
>> that's page 2 of tab 1.
>> uh-huh.
>> correct, sorry about that.
then the savings summary as your financial advisor pointed out in the box above it to the right shows 3.529% on a net present value basis.
so it's after all costs are considered for transaction.
typically for a refunding we want to see something not less than 3%, probably in the four to five percent would be optimal.
when we were here back in February, interest rates were -- were a bit lower and if you turn to tab 2, the second page, in tab 2, there is a 10 year treasury bond yield curve and you can see where rates were February 17th versus where they were as of the end of last week.
there will be a next update for this curve at the end of this week because you can see interest rates have gone up over 100 basis points in terms of the treasury yield curve and since all of these bonds that we are refunding are on the short end of the yield curve, that had a very negative impact in terms of the amount of savings that we were able to take advantage of.
but we still achieved something greater than 3% on a net present value basis.
if you go to tab 3, the only other transaction that was really in the market for -- we would consider a comparable on Monday was the city of san marcos, they also had a go refunding, just under $10 million, they had just the one rating for standard and poors of a double a minus, so not the good credit or the excellent credit that I should say that Travis County has out of triple a.
as you can see, the difference between the triple a rated Travis County versus the double a minus city of san marcos and you can see that we were well through by almost half a percent in a few cases, but about 40 basis points in some other cases, typically the difference between a triple a and a double a minus might be around five to seven basis points.
so it would be better than that by 40 basis points for the most part is very impressive.
probably the last thing that I would want to provide you with and you already are well aware of this, so the moody's rating reports and the standard and poors rating reports behind tab four that are associated with this refunding transaction and not any news.
i'm sure based on the most recent transaction that Travis County did on a competitive basis and we also would like to say on those competitive sales our firm and first southwest company, who are the two firms that participated in completing this transaction for your consideration this afternoon, are two firms where the cover bid on the competitive sale of bonds that you did here recently and actually closed this morning, as I understand, so we -- we have taken a keen interest in Travis County, not only from a competitive build perspective but also in this negotiated refunding, we appreciate the opportunity to do this for you today and happy to answer any questions you may have.
>> so by refinancing the same amount of debt at a lower interest rate, we will realize a savings of how much?
>> approximately $1.2 million on a net present value basis.
on a gross amount it would be higher than that, but you -- to make it all apples to apples, we look at it discounted back the nine years to the -- to the -- to today at the bond rate and that comes in at 1.2 is the way to look at that.
1.2 present value savings.
it's -- it is a -- I believe an excellent transaction as I've told you when we sat here before, the triple a really helps us in the sense that everything I continue to hear and read in the financial news is about quality and Travis County is -- is -- your credit is in your bonds are considered to be one of those safe harbors that people want to be in uncertain times, I think that's why we did so much better than san marcos and other comparable types.
glen opel -- I will let him discuss the -- the particulars?
>> okay.
authorized the bonds -- authorizes the sale of the bonds to the underwriters and approve the form of the various agreements that are necessary to effectuate the sale.
the order is in the form that is in your -- agenda backup, other than it has been conformed to incorporate the -- the numbers from the sale from the -- from yesterday.
and with that I would be glad to answer any particular questions about the -- about the process or the bond order.
>> enacting other provisions relating there to, anything under that broad provision?
>> other than -- other than documents to cover the idea of --
>> [one moment please for change in captioners] .
>> I'll tell you what, people I've told -- I told everybody.
they're really impressed with what the interest rates totally impressed.
thanks very much.
>> any other questions?
comments?
move approval.
>> second.
>> of all the things we need to do with this item.
any discussion of the motion?
all in favor?
show Commissioners Eckhardt, Gomez and yours truly voting in favor.
Commissioner Davis abstaining because his son is an employee of first (indiscernible).
i'll have to abstain on this particular deal.
>> okay.
and we appreciate Commissioner Gomez coming in off of vacation for this one item because the law requires the presence of four members of the court in order for us to conduct this business.
and it was kind of time sensitive.
so she will have to department.
>> I will leave y'all sadly.
>> [ laughter ]
>> all right.
>> thank you, Commissioner.
thank you very much.
>> and we look forward to receiving the stack of papers that I normally sign.
>> thanks, judge.
>> okay.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Tuesday, June 16, 2009 2:41 PM