Title: FM4-COPS 2007C

Recommendation:

I recommend the School Board adopt a Resolution authorizing execu­tion of Amended and Restated Schedules No. 2001A 1 and 2 2002C and 2004A 1 and 2 to the Master Lease, an Escrow Deposit Agreement and a Certificate Purchase Contract and the approval of the sale of Refunding Certificates of Parti­cipation, Series 2007C, in an aggregate prin­cipal amount not exceeding $250,000,000.

Description:

·         This Resolution delegates authority to the Superintendent to negotiate the terms of sale to the underwriters within the parameters set forth in the Resolution.  The Resolution also authorizes the execution and delivery of all instruments and documents necessary to refund the certificates.  Some of those parameters are:

• Present value of the total savings to accrue to the District shall be at least 3.0 % of the refunded par amount.
•  Principal amount shall not exceed $250,000,000.
•  Final maturity shall be no later than August 1, 2029.

·         Market conditions are changing very rapidly.  This Resolution allows for swift action to take advantage of favorable interest rates as long as the conditions above are met and market conditions are favorable.

The economic value to the District as a result of the refunding is the driving force behind this authorization. The actual amount to be refunded will range somewhere between $60,000,000 and $250,000,000, depending on market conditions.  The 3% present value savings noted above is the minimum savings that would be acceptable and staff will apply additional criteria to ensure the most effective financing structure is implemented.

·         The Finance Committee reviewed the proposed transaction at their meeting on January 12, 2007 and approved the transaction parameters as stated above. A draft of the meeting minutes will be available in the Board Minutes Office and on the Finance Committee website at:  http://www.palmbeach.k12.fl.us/FinMan/FINANCIALDIVISIONS/Treasury/nTreasury%20FinCom.htm

·         Merrill Lynch, Bear Stearns, Citigroup and UBS will participate as Co-Senior Managers in the transaction. Merrill Lynch will act as the book-running firm, reflecting that they were the first firm to bring forward the transaction.  The other members of the underwriting team will participate in the transaction as co-managers. 

Note:  Some of the attachments to the authorizing resolution are forthcoming from bond and underwriter’s counsel.

Attachments are located in the Board Minutes.

Financial Impact:
Present value reduction of debt service in the capital budget of at least 3% of the certificates refunded, approximately $1.5 million to $7.5 million.

For Additional Information, contact:

Joseph M. Moore (moorej@palmbeach.k12.fl.us)

Michael J. Burke (burkem@palmbeach.k12.fl.us)

Leanne Evans (evansl@palmbeach.k12.fl.us)