Title: Leasing Corp Approve Sale of Refunding Certificates of Participation

Recommendation:

I recommend the Palm Beach School Board Leasing Corp adopt a Resolution authorizing execu­tion of Amended and Restated Schedule No. 1994A to the Master Lease, an Escrow Deposit Agreement, a Certificate Purchase Contract and the approval to refund a portion of the outstanding 1997A COPs via the sale of Refunding Certificates of Parti­cipation, Series 2007D, in an aggregate prin­cipal amount not exceeding $40,000,000.

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 $40,000,000.

§         Final maturity shall be no later than August 1, 2015.

·         The District issued the first COP issue in 1994.  An advance refunding took place in 1997.  Based on current market conditions, we have an opportunity to do another refunding and further reduce the debt service of the remaining certificates.

·         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 depend on market conditions but will not exceed $40,000,000.  The 3% present value savings noted above is the minimum savings that would be acceptable and staff may 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.

·         Bear Stearns, Citigroup and UBS should participate as Co-Senior Managers in the transaction. Bear Stearns 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. 

Attachments are located in the Board Minutes.

Financial Impact:
Present value reduction of debt service in the capital budget of approximately 3.5% of the certificates refunded, approximately $1 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)