lease revenue refunding bonds - City of Norwalk

City Council February 19, 2013
Resolution No. 13-13 - Issuance of Lease Revenue Refunding Page No. 4
Bonds Series 2013A & 2013B
the 2013 Refunding Bonds will be $1.46 million through 2025 and then drop to $615,000
(after the 2013B Bonds are paid off) from 2026 to 2029. The 2013 Refunding Bonds will
be structured to achieve level annual savings relative the original payment schedules for
the 1999 and 2001 Bonds. There will be no change to the final maturity of bonds which
will remain 2029.
By taking advantage of low interest rates currently available in the market, the City will
save about $106,000 annually from 2014 to 2025 and then $68,000 annually from 2026 to
2029. Over the life of the 2013 Refunding Bonds, the City will save over $1.55 million in
interest costs for the General Fund. In today’s dollars, this translates into over $1.36
million of present value savings (equal to 8.97% of the refunded bond amount). Typically,
municipal issuers set a minimum present value savings goal equal to 3% of the refunded
bond amount to determine if a refinancing is worthwhile to pursue. As stipulated in the
bond authorizing resolution, the 2013 Refunding Bonds must be sold at interest rates that
produce at least 3% present value savings to the General Fund.
Projected Annual Savings to the General Fund
1.80
$106K Annual Savings
1.60
1.40
$ Millions
1.20
1.00
0.80
0.60
0.40
$68K Annual Savings
0.20
0.00
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028*
New Debt Payment
Existing Debt Payment
fund.
* The final payment in 2029 will be paid fully from the release of the bond reserve
The total “all-in” cost of issuing the new refunding bonds is $375,000 or 2.39%, which has
already been factored into the savings stated above.