Title: Reconvene School Board Meeting - Swaptions Item #2

Recommendation:

I recommend the School Board adopt a Resolution authorizing two interest rate exchange agreements, or swaptions, for the Certificates of Participation, Series 2001B and 2002D in an aggregate principal amount not to exceed $305,000,000. 

Description:

·        This Resolution delegates authority to the Superintendent to negotiate the terms of the transaction with the swap counterparty within the parameters set forth in the Resolution.  The Resolution also authorizes the execution and delivery of all instruments and documents necessary to complete the transaction.

·        The swaption simulates an advance refunding of the two COP issues and allows the District to receive a payment equal to the present value savings of the refunding.  These funds will be placed in the Board Contingency within the General Fund.

·        The savings generated by the swaptions are driven by market conditions.  Each transaction will be considered separately and will be completed only if a minimum present value savings of 3.5% can be reached.  If both transactions are completed, the cash payments would be at least $9,650,000.

·        The transaction may require the issuance of variable rate COPs in 2011 and 2012, which will be swapped to a fixed rate matching the current lease payment schedule.

·        The Finance Committee reviewed the transaction and unanimously approved it at their meeting on July 6, 2005. 

Note:  Some of the attachments to the authorizing resolution are forthcoming from bond counsel.

Attachments are located in the Board Minutes Office.

Financial Impact:
The completion of both transactions will generate revenue of at least $9,650,000.  These funds will be placed into the Board Contingency within the General Fund.

For Additional Information, contact:

Joseph Moore (jmoore@palmbeach.k12.fl.us), Leanne Evans