Bond Refunding 101. Michigan School Business Officials April 28, 2016

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Bond Refunding 101. Michigan School Business Officials April 28, 2016"

Transcription

1 Bond Refunding 101 Michigan School Business Officials April 28, 2016

2 Refunding of Debt What is a refunding? A refunding of debt involves the issuance of new debt at lower interest rates to replace debt which is currently outstanding at higher rates. A refunding of debt can also entail the issuance of new debt at either lower or higher interest rates to restructure the payments on existing debt. Budget relief Creates debt service capacity for new money What factors make a refunding work? Lower interest rates Higher short term investment rates Passage of Time 2

3 Lower Interest Rates The chart below shows a history of the municipal tax exempt interest rates as well as the 10 year Treasury rates. 6.00% Historical Interest Rates January March % 4.00% 3.00% 2.00% 1.00% 0.00% AAA MMD GO 15 yr (Tax-Exempt) Treasury 10 yr (Taxable) AAA MMD GO 20 yr (Tax-Exempt) 3

4 Passage of Time If rates are exactly the same 10 years later, a refunding is possible, assuming a positive yield curve where short-term rates are low and long-term rates are high. Initial Bond Issue CURRENT RATES (Assuming a 20 Year Bond Issue) YEAR YIELD Refinancing Bond Issue 10 YEARS LATER (Interest Rates the Same) YEAR YIELD

5 Types of Refunding Current Refunding bond issue which settles less than 90 days before the call date on the bonds being refunded 5/1/16 7/15/16 8/5/16 11/1/16 Authorize Bond Sale Settlement Call Date IRS does not limit number of current refinancing. Advance Refunding bond issue which settles more than 90 days before the call date on the bonds being refunded 5/1/16 7/15/16 8/5/16 5/1/17 Authorize Bond Sale Settlement Call Date IRS permits ONE advance refunding in a new money bond issue. However, the bond issue can be refunded in a number of partial refunding issues. Investment rates in escrow will impact the amount of savings generated. 5

6 Refunding Cash Flow School District Refunds Existing Bond Issue Refunding Proceeds Annual Principal & Interest Payments Escrow Fund (US Gov. Securities) Cost of Issuance New Refunding Bonds Bondholders Bondholders of Refunded Bonds School no longer responsible for amounts to be paid from escrow on refunded bonds

7 Negative Arbitrage Impacts Refunding Savings Advance refunding requires new bond proceeds to be held in an interest bearing escrow until the call date on the old bonds Perfect Scenario* New bond rate = 3.00% 1 year investment rate = 2.46%* Negative Arbitrage = $0 Refinancing Savings = $2,195,809* Current Market New bond rate = 2.91% 1 year investment rate = 0.55% Negative Arbitrage = $178,278 Refinancing Savings = $2,017,531 * Example is hypothetical only. A 2.46% 1 year U.S. Treasury investment rate is not available in the current market. If the 1 year Treasury yield was 2.46%, the overall rate on the bonds would likely be higher and overall savings lower. Employ strategies to maximize investment rate in escrow 7

8 How to Structure Savings Payment Annual Debt Service Payment Projected Millage Rate* Levy Yr. End Before After Before After Year 30-Jun Refunding Refunding Savings Refunding Refunding Savings $8,907,846 $8,814,928 $92, ,474,603 9,385,540 89, ,747,893 9,658,830 89, ,426,533 10,327,470 99, ,785,173 1,686,510 98, ,785,013 1,689,000 96, ,781,258 1,683,145 98, ,777,653 1,680,890 96, ,771,885 1,677,035 94, ,763,735 1,666,485 97, ,743,735 1,649,535 94, ,732,190 1,636,290 95, ,718,795 1,621,645 97, ,558,550 1,460,600 97, , ,200 98, , ,800 98, , ,600 98, , ,600 94, , ,800 95, , ,400 95, , , , $70,198,329 $68,180,798 $2,017, Level savings Assist in leveling overall payments Assist in leveling millage Accelerated (up front) savings Deferred (back loaded) savings Shortened bond term TOTAL CUMULATIVE SAVINGS: $2,017,531 Plus: Estimated SLRF Interest Savings: 273,272 Rate on Refunded TOTAL OVERALL SAVINGS: $2,290,802 Bonds: 4.75% NET PRESENT VALUE (NPV) SAVINGS: $1,562,531 New Refunding NPV Savings as % of Bonds Refunded: % Bond Rate: 2.91% 8

9 Should I Refund? Can I save at least as much as the costs of issuance? Savings shown should always be net of cost of issuance Will the refinancing produce at least 3% savings? Am I using the one advance refunding? If so, what are the chances I may save more if I waited to refund the bonds at a later date? Consider the option value of refunding now Based on the remaining life of the old issue, how many more chances will I have to refund? How will a refunding impact my budget or debt millage in the short and long term? 9

10 Types of Bond Sales Competitive Sold at a specific date and time Any firm may bid on bond offering Bonds awarded to the lowest conforming bid Negotiated Underwriter pre-selected (may be through an RFP process) Underwriter offers bonds for sale to investors (includes local citizens) Pricing date, bond size and maturities are flexible Private Placement Bonds are sold directly to private investor or bank Terms are negotiated with the investor

11 QUESTIONS? If you have any questions or need additional information, please contact us: Kari L. Blanchett Brenda Voutyras Managing Director Senior Vice President

RESOLUTION NO. 891-09 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE MOJAVE WATER AGENCY ESTABLISHING A DEBT MANAGEMENT POLICY

RESOLUTION NO. 891-09 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE MOJAVE WATER AGENCY ESTABLISHING A DEBT MANAGEMENT POLICY RESOLUTION NO. 891-09 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE MOJAVE WATER AGENCY ESTABLISHING A DEBT MANAGEMENT POLICY WHEREAS, the Agency s overriding goal in issuing debt is to respond to and

More information

MICHIGAN DEPARTMENT OF TREASURY. Bureau of. Bond Finance. www.michigan.gov/bondfinance

MICHIGAN DEPARTMENT OF TREASURY. Bureau of. Bond Finance. www.michigan.gov/bondfinance MICHIGAN DEPARTMENT OF TREASURY Bureau of Bond Finance www.michigan.gov/bondfinance MISSION STATEMENT The Bureau of Bond Finance will achieve and maintain access to the financial market at the lowest cost

More information

WEST BASIN MUNICIPAL WATER DISTRICT Debt Management Policy Administrative Code Exhibit G January 2015

WEST BASIN MUNICIPAL WATER DISTRICT Debt Management Policy Administrative Code Exhibit G January 2015 1.0 Purpose The purpose of this Debt Management Policy ( Policy ) is to establish parameters and provide guidance as to the issuance, management, continuing evaluation of and reporting on all debt obligations.

More information

CASTAIC LAKE WATER AGENCY DEBT MANAGEMENT POLICY (WHOLESALE WATER SYSTEM) (Board Approved; Revised January 2012)

CASTAIC LAKE WATER AGENCY DEBT MANAGEMENT POLICY (WHOLESALE WATER SYSTEM) (Board Approved; Revised January 2012) CASTAIC LAKE WATER AGENCY DEBT MANAGEMENT POLICY (WHOLESALE WATER SYSTEM) (Board Approved; Revised January 2012) INTRODUCTION The Agency s overriding goal in issuing debt is to respond to, and provide

More information

Virginia State University Policies Manual. Title: Debt Management Guidelines and Procedures Policy: 1500

Virginia State University Policies Manual. Title: Debt Management Guidelines and Procedures Policy: 1500 Purpose a. To provide guidance to Virginia State University in undertaking long-term debt obligations benefiting the University. b. To provide a structured framework for the issuance of long-term debt

More information

DEBT MANAGEMENT POLICY ANNUAL UPDATE HUMBOLDT COUNTY, NEVADA

DEBT MANAGEMENT POLICY ANNUAL UPDATE HUMBOLDT COUNTY, NEVADA DEBT MANAGEMENT POLICY ANNUAL UPDATE HUMBOLDT COUNTY, NEVADA July, 2015 TABLE OF CONTENTS I. INTRODUCTION 1 II. ABILITY TO AFFORD EXISTING GENERAL OBLIGATION DEBT, AUTHORIZED FUTURE GENERAL OBLIGATION

More information

SECTION 7 DEBT MANAGEMENT POLICY LAS VEGAS VALLEY WATER DISTRICT FISCAL YEAR 2015-16 OPERATING AND CAPITAL BUDGET

SECTION 7 DEBT MANAGEMENT POLICY LAS VEGAS VALLEY WATER DISTRICT FISCAL YEAR 2015-16 OPERATING AND CAPITAL BUDGET SECTION 7 DEBT MANAGEMENT POLICY LAS VEGAS VALLEY WATER DISTRICT FISCAL YEAR 2015-16 OPERATING AND CAPITAL BUDGET In Accordance With NRS 350.013 June 30, 2015 7-1 Table of Contents Introduction... 7-3

More information

June, 2015 DEBT MANAGEMENT PLAN COUNTY OF ELKO, NEVADA

June, 2015 DEBT MANAGEMENT PLAN COUNTY OF ELKO, NEVADA June, 2015 DEBT MANAGEMENT PLAN COUNTY OF ELKO, NEVADA Introduction The County of Elko (the "County") has a Capital Improvement Plan (CIP) which is a multi-year planning document that identifies and prioritizes

More information

Debt Management Policies & Guidelines

Debt Management Policies & Guidelines Debt Management Policies & Guidelines January, 2004 PREPARED BY: ANDREW E. MEISNER, COUNTY TREASURER PATRICK M. DOHANY, COUNTY TREASURER I. COUNTY'S DEBT POLICY A. Purpose The County recognizes the foundation

More information

ADMINISTRATIVE REGULATION AR: 6.03 DATE APPROVED September 10, 2002 ORIGINATING DEPARTMENT:

ADMINISTRATIVE REGULATION AR: 6.03 DATE APPROVED September 10, 2002 ORIGINATING DEPARTMENT: ADMINISTRATIVE REGULATION AR: 6.03 DATE APPROVED September 10, 2002 SUBJECT: ORIGINATING DEPARTMENT: Debt Management Policy Office of Management & Budget Page 1 of 8 I. PURPOSE: The County recognizes the

More information

Missouri Municipal League Annual Conference Debt Management Policies

Missouri Municipal League Annual Conference Debt Management Policies Missouri Municipal League Annual Conference Debt Management Policies Benjamin Hart Vice President Assurance Services September 21, 2015 Learning Objectives Understand the role of debt and different types

More information

University of Washington Debt Management Annual Report

University of Washington Debt Management Annual Report VII. STANDING COMMITTEES F 9 B. Finance and Asset Management Committee Debt Management Annual Report INFORMATION The Board of Regents is charged with adopting the University s Debt Management Policy, establishing

More information

Section I. Introduction

Section I. Introduction Section I. Introduction Purpose and Overview In its publication entitled Best Practice Debt Management Policy, the Government Finance Officers Association (GFOA) states that Debt management policies are

More information

3354:1-20-07.1 Tax-Exempt Debt Compliance Procedure. Tax-Exempt Debt

3354:1-20-07.1 Tax-Exempt Debt Compliance Procedure. Tax-Exempt Debt 3354:1-20-07.1 Tax-Exempt Debt Compliance Procedure (A) Tax-Exempt Debt The use of tax-exempt debt plays an important role in funding a significant portion of the College s capital projects. As a result,

More information

SKAGIT COUNTY DEBT POLICY. Page 1 of 12

SKAGIT COUNTY DEBT POLICY. Page 1 of 12 SKAGIT COUNTY DEBT POLICY Page 1 of 12 SKAGIT COUNTY DEBT POLICY INDEX Page I. Roles and Responsibilities 3 II. Debt and Capital Planning 3-4 III. Credit Objectives 4-5 IV. Purpose, Type and Use of Debt

More information

www.michigan.gov/sblf Table of Contents

www.michigan.gov/sblf Table of Contents STATE OF MICHIGAN School Loan Revolving Fund Process School Bond Qualification and Loan Program Michigan Department of Treasury 430 West Allegan Street Lansing, Michigan 48922 Telephone: 517-335-0994 Fax:

More information

Calling the Calls on Municipal Bonds And How To Use Calls To Seek Higher Yields

Calling the Calls on Municipal Bonds And How To Use Calls To Seek Higher Yields Calling the Calls on Municipal Bonds And How To Use Calls To Seek Higher Yields Investors can get hurt by bond calls, particularly when they buy premium bonds without knowing all the calls in advance.

More information

DEBT MANAGEMENT POLICY

DEBT MANAGEMENT POLICY Page 1 of 5 DEBT LIMITS Credit Ratings The school district seeks to maintain the highest possible credit ratings for all categories of short- and long-term debt that can be achieved without compromising

More information

Department of State Treasurer. Policy Manual for Local Governments. Section 95: Arbitrage

Department of State Treasurer. Policy Manual for Local Governments. Section 95: Arbitrage Department of State Treasurer Policy Manual for Local Governments Issued: October 2010 Table of Contents Part I Introduction... 1 A. Purpose of Section... 1 B. What is Arbitrage?... 1 C. A Word of Caution...

More information

State Debt Management Presentation February 2013. Kristin A. Hanson, Assistant Commissioner, Treasury

State Debt Management Presentation February 2013. Kristin A. Hanson, Assistant Commissioner, Treasury State Debt Management Presentation February 2013 Kristin A. Hanson, Assistant Commissioner, Treasury What is a Bond? Municipal bonds are debt securities issued by states, cities, counties and other governmental

More information

CITY OF MIAMI, FLORIDA DEBT MANAGEMENT PROCEDURES MANUAL

CITY OF MIAMI, FLORIDA DEBT MANAGEMENT PROCEDURES MANUAL CITY OF MIAMI, FLORIDA DEBT MANAGEMENT PROCEDURES MANUAL OVERVIEW This Procedures Manual has been drafted to assist in the development of goals, procedures for implementation and standards for reporting

More information

DEBT ISSUANCE MANUAL SEPTEMBER 2007. Published by the League of Oregon Cities

DEBT ISSUANCE MANUAL SEPTEMBER 2007. Published by the League of Oregon Cities L E A G U E O F O R E G O N C I T I E S DEBT ISSUANCE MANUAL SEPTEMBER 2007 Published by the League of Oregon Cities LEAGUE OF OREGON CITIES DEBT ISSUANCE MANUAL LEAGUE OF OREGON CITIES 1201 Court Street

More information

Qualified Zone Academy Bonds, Qualified School Construction Bonds, and Build America Bonds

Qualified Zone Academy Bonds, Qualified School Construction Bonds, and Build America Bonds Qualified Zone Academy Bonds, Qualified School Construction Bonds, and Build America Bonds American Recovery and Reinvestment Act Coordination Meeting: Puget Sound Regional Council, Friday, August 14,

More information

b. provide guidelines to control the overall debt management process so that all liabilities are managed in accordance with stated objectives;

b. provide guidelines to control the overall debt management process so that all liabilities are managed in accordance with stated objectives; Policy 6.085 Debt Management 1. Purpose The purpose of this Policy is to establish guidance for the issuance and management of the debt of the School District. Such debt includes short-term and long-term

More information

Incurring of Indebtedness

Incurring of Indebtedness Incurring of Indebtedness Goals for this Session Basic Understanding of: The decision to borrow Financing options Overview of the State Bond Commission The Decision to Borrow Develop a long range plan

More information

In-Depth Look at Debt Structuring

In-Depth Look at Debt Structuring FINANCE 301: In-Depth Look at Debt Structuring 2012 CPIM Academy Josh Mandel, State Treasurer of Ohio FINANCE 301 In-Depth Look at Debt Structuring 2012 CPIM Academy Review of Bonds & Bond Terms Bonds

More information

DEBT MANAGEMENT POLICY

DEBT MANAGEMENT POLICY UNIVERSITY OF SOUTH FLORIDA DEBT MANAGEMENT POLICY Policy & Procedures Manual Effective Date Policy Number DEBT MANAGEMENT POLICY 12/07/06 Approved by USF Board of Trustees USF BOT 06-003 i TABLE OF CONTENTS

More information

Bonds, in the most generic sense, are issued with three essential components.

Bonds, in the most generic sense, are issued with three essential components. Page 1 of 5 Bond Basics Often considered to be one of the most conservative of all investments, bonds actually provide benefits to both conservative and more aggressive investors alike. The variety of

More information

Combining Tax Exempt, Short-Term Bonds with Taxable GNMA Sale for Affordable Apartment Financings

Combining Tax Exempt, Short-Term Bonds with Taxable GNMA Sale for Affordable Apartment Financings Combining Tax Exempt, Short-Term Bonds with Taxable GNMA Sale for Affordable Apartment Financings March 15, 2013 Presented by: R. WADE NORRIS, ESQ. wnorris@ennbonds.com (202) 973-0100 EICHNER NORRIS &

More information

Debt Management Guidelines University of Arizona Prepared by Financial Services Office. Debt Management Guidelines

Debt Management Guidelines University of Arizona Prepared by Financial Services Office. Debt Management Guidelines Debt Management Guidelines University of Arizona Prepared by Financial Services Office Debt Management Guidelines 0 Table of Contents I. Introduction... 3 II. Debt Issuance Strategies... 4 A. Mission Based

More information

Debt Management. Debt Management

Debt Management. Debt Management Debt Management Capital Expenditures vs. Current Expenditures Local government expenditures can be broadly categorized as either current or capital. Generally, current expenditures are related to ongoing

More information

CITY OF SEATTLE DEBT MANAGEMENT POLICIES

CITY OF SEATTLE DEBT MANAGEMENT POLICIES CITY OF SEATTLE DEBT MANAGEMENT POLICIES Introduction The following policies are enacted to maintain standard and rational practices for the issuance and management of debt by the City of Seattle. Their

More information

CITY OF ALBUQUERQUE, NEW MEXICO

CITY OF ALBUQUERQUE, NEW MEXICO CITY OF ALBUQUERQUE, NEW MEXICO DEBT MANAGEMENT POLICY & GUIDELINES As of July 1, 2013 Prepared by: Department of Finance & Administrative Services Treasury Division Debt Management Policy & Guidelines

More information

Summary of Federal Arbitrage Law 1. March 1, 2012

Summary of Federal Arbitrage Law 1. March 1, 2012 Summary of Federal Arbitrage Law 1 March 1, 2012 Table of Contents 1 INTRODUCTION AND SCOPE... 1 Page 1.1 Source of Tax Exemption... 1 1.2 Nature of Obligation... 1 1.3 Scope of this Memo; Disclaimer...

More information

Module A Introduction to Tax-Exempt Bonds Overview

Module A Introduction to Tax-Exempt Bonds Overview Module A Introduction to Tax-Exempt Bonds Overview Introduction This module provides an introduction to the municipal (tax-exempt) bond market. It is divided into five sections. Fundamentals The basic

More information

UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION

UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 8852 / September 28, 2007 ADMINISTRATIVE PROCEEDING File No. 3-12850 In the Matter of Anchor National

More information

BEST PRACTICES IN DEBT MANAGEMENT

BEST PRACTICES IN DEBT MANAGEMENT Piper Jaffray & Co. Todd Goffoy a.t.goffoy@pjc.com BEST PRACTICES IN DEBT MANAGEMENT Michelle Bock michelle.m.bock@pjc.com Jack Dillingham Jack.c.dillingham@pjc.com Gilmore & Bell, P.C. Jason Terry jterry@gilmorebell.com

More information

STATE BOARD OF REGENTS OF THE STATE OF UTAH STUDENT LOAN PURCHASE PROGRAM An Enterprise Fund of the State of Utah

STATE BOARD OF REGENTS OF THE STATE OF UTAH STUDENT LOAN PURCHASE PROGRAM An Enterprise Fund of the State of Utah An Enterprise Fund of the State of Utah Financial Statements AN ENTERPRISE FUND OF THE STATE OF UTAH FOR THE SIX MONTHS ENDED DECEMBER 31, 2011 TABLE OF CONTENTS Page MANAGEMENT S REPORT 1 FINANCIAL STATEMENTS:

More information

Callable Bonds - Structure

Callable Bonds - Structure 1.1 Callable bonds A callable bond is a fixed rate bond where the issuer has the right but not the obligation to repay the face value of the security at a pre-agreed value prior to the final original maturity

More information

City of Philadelphia Debt Management Policy August 2015

City of Philadelphia Debt Management Policy August 2015 City of Philadelphia Debt Management Policy August 2015 I. INTRODUCTION While the issuance of debt is often an appropriate method of financing capital projects and major equipment acquisition, it needs

More information

AFTER THE BONDS ARE ISSUED: THEN WHAT?

AFTER THE BONDS ARE ISSUED: THEN WHAT? Exhibit AFTER THE BONDS ARE ISSUED: THEN WHAT? The closing date of a tax-exempt bond issue usually is the culmination of weeks or months of negotiation and planning. That process includes extensive fact-gathering

More information

WORKING CAPITAL FINANCINGS IN TIMES OF FISCAL DISTRESS TAX CONSIDERATIONS

WORKING CAPITAL FINANCINGS IN TIMES OF FISCAL DISTRESS TAX CONSIDERATIONS WORKING CAPITAL FINANCINGS IN TIMES OF FISCAL DISTRESS TAX CONSIDERATIONS By Robert J. Eidnier I. What Is Working Capital? A. The tax-exempt bond regulations define working capital as any expenditure that

More information

State Bond Commission was created by Article VII, Section 8 of the Louisiana Constitution of 1974

State Bond Commission was created by Article VII, Section 8 of the Louisiana Constitution of 1974 NAVIGATING THE LOUISIANA STATE BOND COMMISSION Louisiana District Attorney Association Fall Conference November 21, 2013 Creation and Purpose State Bond Commission was created by Article VII, Section 8

More information

DEBT FINANCING POLICIES

DEBT FINANCING POLICIES DEBT FINANCING POLICIES 1801 Debt Financing Selection 1802 Determination of Debt Capacity 1803 Debt Management Operation 1804 Debt Management Capital Projects 1805 Bank Lines of Credit 1806 Bank Letters

More information

Bonds and preferred stock. Basic definitions. Preferred(?) stock. Investing in fixed income securities

Bonds and preferred stock. Basic definitions. Preferred(?) stock. Investing in fixed income securities Bonds and preferred stock Investing in fixed income securities Basic definitions Stock: share of ownership Stockholders are the owners of the firm Two types of stock: preferred and common Preferred stock:

More information

Introduction to Bond Math Presentation to CDIAC

Introduction to Bond Math Presentation to CDIAC October 2, 2008 Peter Taylor, Managing Director, Public Finance Department Matthew Koch, Vice President, Public Finance Department Introduction to Bond Math Presentation to CDIAC Agenda Agenda I. What

More information

SPEER FINANCIAL, INC. INDEPENDENT MUNICIPAL ADVISORS

SPEER FINANCIAL, INC. INDEPENDENT MUNICIPAL ADVISORS INDEPENDENT MUNICIPAL ADVISORS TO: FROM: RE: Purchasers of General Obligation Bonds David F. Phillips, Speer Financial Inc. Chicago Ridge Park District, DATE: October 16, 2015 Bid Packet The enclosed materials

More information

INTERACTIVE BROKERS DISCLOSURE STATEMENT FOR BOND TRADING

INTERACTIVE BROKERS DISCLOSURE STATEMENT FOR BOND TRADING INTERACTIVE BROKERS DISCLOSURE STATEMENT FOR BOND TRADING THIS DISCLOSURE STATEMENT DISCUSSES THE CHARACTERISTICS AND RISKS OF TRADING BONDS THROUGH INTERACTIVE BROKERS (IB). BEFORE TRADING BONDS YOU SHOULD

More information

State of Maryland Debt Management and Interest Rate Exchange Agreement Policies

State of Maryland Debt Management and Interest Rate Exchange Agreement Policies State of Maryland Debt Management and Interest Rate Exchange Agreement Policies 1.0 Objective This Debt Management and Interest Rate Exchange Agreement Policy (Policy), prepared by the Maryland State Treasurer

More information

Washington State Housing Finance Commission. Nonprofit Guide to Complying with Tax Laws After the Bond Issue

Washington State Housing Finance Commission. Nonprofit Guide to Complying with Tax Laws After the Bond Issue Washington State Housing Finance Commission Nonprofit Guide to Complying with Tax Laws After the Bond Issue After your bond issue is complete, there are some important Internal Revenue Service ( IRS )

More information

23.02 Debt Management

23.02 Debt Management 23.02 Debt Management Approved February 27, 1995 (MO 44-95) Revised July 25, 1997 (MO 96-97) Revised July 23, 1999 (MO 197-1999) Revised March 24, 2000 (MO 30-2000) Revised September 28, 2001 (MO 210-2001)

More information

Palm Beach County School District

Palm Beach County School District Palm Beach County School District Synthetic Refunding Opportunities July 6, 2005 presented by Public Financial Management 300 South Orange Avenue Suite 1170 Orlando, FL 32801 407 648-2208 Table of Contents

More information

Tax rules for bond investors

Tax rules for bond investors Tax rules for bond investors Understand the treatment of different bonds Paying taxes is an inevitable part of investing for most bondholders, and understanding the tax rules, and procedures can be difficult

More information

AGENDA ITEM February 21, 2012. Resolution adopting Tax Exempt Financing Policy & Procedure.

AGENDA ITEM February 21, 2012. Resolution adopting Tax Exempt Financing Policy & Procedure. AGENDA ITEM February 21, 2012 Subject: Resolution adopting Tax Exempt Financing Policy & Procedure. Department: Finance. The City of Nevada has five tax-exempt bond issues. Because of this we are required

More information

IRS AUDIT ISSUES AND SOLUTIONS

IRS AUDIT ISSUES AND SOLUTIONS IRS AUDIT ISSUES AND SOLUTIONS or What to do when the IRS comes knocking? David L. Richardson McGuireWoods LLP Key Takeaway If you get a letter from the IRS telling you your bond issue is being audited

More information

New IRS Proposed Regulations major impact on tax-exempt bonds

New IRS Proposed Regulations major impact on tax-exempt bonds September 18, 2013 New IRS Proposed Regulations major impact on tax-exempt bonds On September 13, 2013, the IRS released two sets of proposed regulations (the Proposed Regulations ) that would make a number

More information

Rising Interest Rates and Municipal Bond Performance

Rising Interest Rates and Municipal Bond Performance Rising Interest Rates and Municipal Performance September 2013 INTRODUCTION Adam Mackey Managing Director Municipal Fixed Income Fixed income investors are justifiably anxious about recent increases in

More information

Pricing and Strategy for Muni BMA Swaps

Pricing and Strategy for Muni BMA Swaps J.P. Morgan Management Municipal Strategy Note BMA Basis Swaps: Can be used to trade the relative value of Libor against short maturity tax exempt bonds. Imply future tax rates and can be used to take

More information

Interest Rate Swaps. Application to Tax-Exempt Financing. craig underwood eric h. chu thomas b. fox jon a. mcmahon

Interest Rate Swaps. Application to Tax-Exempt Financing. craig underwood eric h. chu thomas b. fox jon a. mcmahon Interest Rate Swaps Application to Tax-Exempt Financing craig underwood eric h. chu thomas b. fox jon a. mcmahon roger l. davis stephen a. spitz albert simons iii george g. wolf DISCLAIMER: Nothing in

More information

Public Charter Schools

Public Charter Schools Public Charter Schools, Borrowing With Tax-Exempt Bonds (Second Edition) Public Charter Schools Borrowing With Tax-Exempt Bonds united states beijing düsseldorf moscow berlin munich san francisco europe

More information

PUBLIC FINANCE HANDBOOK FOR TEXAS COUNTIES

PUBLIC FINANCE HANDBOOK FOR TEXAS COUNTIES PUBLIC FINANCE HANDBOOK FOR TEXAS COUNTIES 2014 PREPARED BY THOMAS M. POLLAN BICKERSTAFF HEATH DELGADO ACOSTA LLP 3711 S. MoPac Expressway Building One, Suite 300 Austin, Texas 78746 (512) 472-8021 (512)

More information

POLICY. Employees Covered All College financing activities.

POLICY. Employees Covered All College financing activities. THE RICHARD STOCKTON COLLEGE OF NEW JERSEY POLICY Debt Management Policy Policy Administrator: Associate Vice President for Administration and Finance Authority: N.J.S.A. 18A:64-6 Effective Date: February

More information

DEBT MANAGEMENT POLICY CITY OF WINTER PARK, FLORIDA

DEBT MANAGEMENT POLICY CITY OF WINTER PARK, FLORIDA DEBT MANAGEMENT POLICY CITY OF WINTER PARK, FLORIDA 1. Administration of debt policy: The Finance Director of the City of Winter Park, Florida (the City ) is charged with overseeing and implementing the

More information

Financing Renewable Energy in New Jersey

Financing Renewable Energy in New Jersey Financing Renewable Energy in New Jersey Renewable Energy Procurement Workshop Sustainable Jersey and the Atlantic County Utilities Authority Presenters Douglas J. Bacher, Managing Director Dianna C. Geist,

More information

BEDFORD COUNTY TENNESSEE. Debt Management Policy

BEDFORD COUNTY TENNESSEE. Debt Management Policy BEDFORD COUNTY TENNESSEE Debt Management Policy Formally Adopted: November 8, 2011 TABLE OF CONTENTS Introduction... i Introductory Statement...1 Goals and Objectives...1 Transparency...1 Professionals...2

More information

13 01 Colorado Springs Utilities Debt Management Audit

13 01 Colorado Springs Utilities Debt Management Audit O FFICE O F T HE C ITY A UDITOR C OLORADO S PRINGS, C OLORADO 13 01 Colorado Springs Utilities Debt Management Audit February 2013 O FFICE O F T HE C ITY A UDITOR C OLORADO S PRINGS, C OLORADO 13 01 Colorado

More information

Tax Exempt Bonds Teleconference. Arbitrage Yield Restriction & Rebate Compliance

Tax Exempt Bonds Teleconference. Arbitrage Yield Restriction & Rebate Compliance Tax Exempt Bonds Teleconference on Arbitrage Yield Restriction & Rebate Compliance Presented by IRS Office of Tax Exempt Bonds on Thursday, May 17, 2012 Topics & Speakers An Overview of Arbitrage: Yield

More information

FINANCIAL PRODUCTS USED IN THE TAX-EXEMPT BOND INDUSTRY by Sunita B. Lough

FINANCIAL PRODUCTS USED IN THE TAX-EXEMPT BOND INDUSTRY by Sunita B. Lough FINANCIAL PRODUCTS USED IN THE TAX-EXEMPT BOND INDUSTRY by Sunita B. Lough Objective The objective of this Article is to discuss various types of financial products used in the tax-exempt bond industry.

More information

Issue Paper PAPERS EXAMINING CRITICAL ISSUES FACING THE MICHIGAN LEGISLATURE SCHOOL CAPITAL EXPENDITURE FINANCE IN MICHIGAN ISSUES AND ALTERNATIVES

Issue Paper PAPERS EXAMINING CRITICAL ISSUES FACING THE MICHIGAN LEGISLATURE SCHOOL CAPITAL EXPENDITURE FINANCE IN MICHIGAN ISSUES AND ALTERNATIVES Senate Fiscal Agency Issue Paper PAPERS EXAMINING CRITICAL ISSUES FACING THE MICHIGAN LEGISLATURE SCHOOL CAPITAL EXPENDITURE FINANCE IN MICHIGAN ISSUES AND ALTERNATIVES by Elizabeth Pratt, Fiscal Analyst

More information

Michigan School Loan Revolving Fund General Instructions for Completing Annual Repayment Activity Application

Michigan School Loan Revolving Fund General Instructions for Completing Annual Repayment Activity Application Michigan School Loan Revolving Fund General Instructions for Completing Annual Repayment Activity Application It is a statutory requirement that the district submit a completed Annual Repayment Activity

More information

School Bond Loan Servicing Process

School Bond Loan Servicing Process Michigan Department of Treasury School Bond Loan Servicing Process Presenter: Cathy Clark MSBO Annual Conference April 2015 School Bond Qualification and Loan Program Facts Approximately 423 school districts

More information

Trading in Treasury Bond Futures Contracts and Bonds in Australia

Trading in Treasury Bond Futures Contracts and Bonds in Australia Trading in Treasury Bond Futures Contracts and Bonds in Australia Belinda Cheung* Treasury bond futures are a key financial product in Australia, with turnover in Treasury bond futures contracts significantly

More information

Chapter. Investing in Bonds. 13.1 Evaluating Bonds 13.2 Buying and Selling Bonds. 2010 South-Western, Cengage Learning

Chapter. Investing in Bonds. 13.1 Evaluating Bonds 13.2 Buying and Selling Bonds. 2010 South-Western, Cengage Learning Chapter 13 Investing in Bonds 13.1 Evaluating Bonds 13.2 Buying and Selling Bonds 2010 South-Western, Cengage Learning Standards Standard 4.0 Investigate opportunities available for saving and investing.

More information

Operating Budget Data

Operating Budget Data X00A00 Public Debt Operating Budget Data ($ in Thousands) FY 12 FY 13 FY 14 FY 13-14 % Change Actual Working Allowance Change Prior Year General Fund $0 $0 $101,000 $101,000 Adjusted General Fund $0 $0

More information

This policy will assist the School District in advancing the following goals:

This policy will assist the School District in advancing the following goals: School Reform Commission Policy 623: DEBT POLICY BACKGROUND Debt management policies are written guidelines that affect the amount and type of debt issued by a state or local government, the issuance process,

More information

Cambrian School District

Cambrian School District Disclaimer: Provided for distribution in advance of the meeting. Please see Board minutes for Q&A and verbal commentary. Cambrian School District Report on Taxpayer Savings from Measure G Bond Refinancing

More information

GENERA L OBLIGATION DEBT SERVICE SUMMARY

GENERA L OBLIGATION DEBT SERVICE SUMMARY GENERA L OBLIGATION DEBT SERVICE SUMMARY General Obligation debt is secured by and payable from the receipts of annual ad valorem taxes, within legal limits, on taxable property within the City. The City

More information

DEBT MANAGEMENT POLICY

DEBT MANAGEMENT POLICY DEBT MANAGEMENT POLICY STLOS ANGELES UNIFIED SCHOOL DI RICT BOARD OF EDUCATION Prepared by: The Office of the Chief Financial Officer September 13, 2011 DEBT MANAGEMENT POLICY Index Background... 3 Article

More information

Government Finance Officers Association

Government Finance Officers Association Government Finance Officers Association Best Practices Related to Debt Management and Debt Issuance June 2013 Compiled By Government Finance Officers Association Best Practices Related to Debt Management

More information

Sarasota County Debt Management Policy

Sarasota County Debt Management Policy Sarasota County Debt Management Policy The objective of the County s Debt Management Policy is to provide guidance to Sarasota County Administration and the Clerk of the Circuit Court and County Comptroller,

More information

Debt Service Fund - General Obligations Bonds RESTRICTED FUND*

Debt Service Fund - General Obligations Bonds RESTRICTED FUND* Fiscal Year 2009-10 Debt Service Fund - General Obligations Bonds RESTRICTED FUND* Debt Service Fund - General Obligations Bonds Total in Fund for 2009-10: $31,152,639 When the District sells bonds to

More information

State of Arkansas Safe Drinking Water Revolving Loan Fund Program

State of Arkansas Safe Drinking Water Revolving Loan Fund Program Accountants Report and Financial Statements June 30, 2007 and 2006 June 30, 2007 and 2006 Contents Independent Accountants Report on Financial Statements and Supplementary Information... 1 Management s

More information

COMMONLY ASKED BOND LAW QUESTIONS. www.bgllp.com Texas New York Washington, D.C. Connecticut Seattle Dubai London

COMMONLY ASKED BOND LAW QUESTIONS. www.bgllp.com Texas New York Washington, D.C. Connecticut Seattle Dubai London COMMONLY ASKED BOND LAW QUESTIONS 1 Can a City issue general obligation bonds for economic development? Cannot issue general obligation bonds for economic development without an election Economic development

More information

A Guide To Capital Funding Options For Public Hospital Districts, Rural Hospital And/Or Critical Access Hospitals In Washington State

A Guide To Capital Funding Options For Public Hospital Districts, Rural Hospital And/Or Critical Access Hospitals In Washington State A Guide To Capital Funding Options For Public Hospital Districts, Rural Hospital And/Or Critical Access Hospitals In Washington State Association of Washington Public Hospital Districts Keeping Quality

More information

LeadingAge Missouri Annual Conference. Update on FHA LEAN HUD Financing for Senior Living Providers

LeadingAge Missouri Annual Conference. Update on FHA LEAN HUD Financing for Senior Living Providers LeadingAge Missouri Annual Conference Update on FHA LEAN HUD Financing for Senior Living Providers September 19, 2013 Offering Financial Advice and Solutions to Health Care, Senior Living, and Housing

More information

City of San Antonio, Texas. FY 2014 Proposed. Debt Management Plan. Presented by Ben Gorzell, Chief Financial Officer.

City of San Antonio, Texas. FY 2014 Proposed. Debt Management Plan. Presented by Ben Gorzell, Chief Financial Officer. City of San Antonio, Texas FY 2014 Proposed Budget Worksession Debt Management Plan Presented by Ben Gorzell, Chief Financial Officer September 4, 2013 Types of Debt Issued by the City General Obligation

More information

Financial Advisor/Rate Consultant Roles and Responsibilities. ACEC Indiana Funding Sources Workshop August 21, 2014

Financial Advisor/Rate Consultant Roles and Responsibilities. ACEC Indiana Funding Sources Workshop August 21, 2014 Financial Advisor/Rate Consultant Roles and Responsibilities ACEC Indiana Funding Sources Workshop August 21, 2014 Collaborative Process Financial and capital improvement project planning along with rate

More information

University of Washington. Debt Management Policy. Statement of Objectives and Policies. Approved by the Board of Regents, September 19, 2002

University of Washington. Debt Management Policy. Statement of Objectives and Policies. Approved by the Board of Regents, September 19, 2002 University of Washington Debt Management Policy Statement of Objectives and Policies Approved by the Board of Regents, September 19, 2002 Amended July 16, 2004 and May 15, 2008. Overview This statement

More information

FHA 242 Loan Insurance: Background & General Characteristics

FHA 242 Loan Insurance: Background & General Characteristics FHA 242 Loan Insurance: Background & General Characteristics FHA Insurance Programs (Numbers reference sections of National Housing Act) FHA 242: for acute care hospitals with > 50% acute care days FHA

More information

BOND - Security that obligates the issuer to make specified payments to the bondholder.

BOND - Security that obligates the issuer to make specified payments to the bondholder. Bond Valuation BOND - Security that obligates the issuer to make specified payments to the bondholder. COUPON - The interest payments paid to the bondholder. FACE VALUE - Payment at the maturity of the

More information

STATE BOARD OF REGENTS OF THE STATE OF UTAH STUDENT LOAN PURCHASE PROGRAM An Enterprise Fund of the State of Utah

STATE BOARD OF REGENTS OF THE STATE OF UTAH STUDENT LOAN PURCHASE PROGRAM An Enterprise Fund of the State of Utah An Enterprise Fund of the State of Utah Financial Statements AN ENTERPRISE FUND OF THE STATE OF UTAH FOR THE NINE MONTHS ENDED MARCH 31, 2011 TABLE OF CONTENTS Page MANAGEMENT S REPORT 1 FINANCIAL STATEMENTS:

More information

Summary of Selected Issues of the SEC Municipal Advisor Rule. that Affect Broker-Dealers. Intending to be Underwriters

Summary of Selected Issues of the SEC Municipal Advisor Rule. that Affect Broker-Dealers. Intending to be Underwriters November 2013 The following materials have been prepared by the Orrick, Herrington & Sutcliffe public finance department to provide an outline for purposes of discussing the issues that arise under the

More information

By Michael Klein, Senior Vice President, Citi IMR 26

By Michael Klein, Senior Vice President, Citi IMR 26 By Michael Klein, Senior Vice President, Citi IMR 26 Tax Credit Bonds In the American Recovery and Reinvestment Act of 2009 (ARRA), the U.S. Congress significantly increased the tax credit bond program

More information

Municipal Bond Market Weekly

Municipal Bond Market Weekly Strategy Municipal Bond Market Weekly Bottom Line: The U.S. Treasury yields rose sharply on a hawkishly-perceived interpretation of the FOMC meeting statement. Municipal yields hung on and the 10-yr AAA

More information

COMMONWEALTH OF VIRGINIA DEPARTMENT OF THE TREASURY. GENERAL ACCOUNT INVESTMENT GUIDELINES Statement of Investment Policies and Goals

COMMONWEALTH OF VIRGINIA DEPARTMENT OF THE TREASURY. GENERAL ACCOUNT INVESTMENT GUIDELINES Statement of Investment Policies and Goals COMMONWEALTH OF VIRGINIA DEPARTMENT OF THE TREASURY Statement of Investment Policies and Goals Adopted by the Treasury Board April 16, 2014 Effective April 16, 2014 TABLE OF CONTENTS OVERVIEW State Treasury

More information

BOND ORDINANCE NO. 16-2015

BOND ORDINANCE NO. 16-2015 BOND ORDINANCE NO. 16-2015 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ELIZABETHTOWN, KENTUCKY, AUTHORIZING AND APPROVING THE ISSUANCE OF GENERAL OBLIGATION REFUNDING BONDS, SERIES OF 2015 IN A PRINCIPAL

More information

Topics in Chapter. Key features of bonds Bond valuation Measuring yield Assessing risk

Topics in Chapter. Key features of bonds Bond valuation Measuring yield Assessing risk Bond Valuation 1 Topics in Chapter Key features of bonds Bond valuation Measuring yield Assessing risk 2 Determinants of Intrinsic Value: The Cost of Debt Net operating profit after taxes Free cash flow

More information

The New IRS Strategic Initiative for Tax-Exempt Bonds: Post-Issuance Compliance

The New IRS Strategic Initiative for Tax-Exempt Bonds: Post-Issuance Compliance The New IRS Strategic Initiative for Tax-Exempt Bonds: Post-Issuance Compliance 0 What is Post-Issuance Compliance? 1 Post-Issuance Compliance A process which provides an organization with a record retention

More information

california school district debt financing Third Edition

california school district debt financing Third Edition of the california school district debt financing Third Edition Greg Harrington John Hartenstein Donald Field the of california school district debt financing Third Edition the of california school district

More information