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INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10244
March 5, 2019
To the Mayor and Members of the City Council
Page 1 of 2
SUBJECT: FINAL RESULTS OF 2019 DRAINAGE UTILITY SYSTEM REVENUE
REFUNDING BONDS
This informal report is intended to provide the Mayor and City Council with a summary of the
results from our 2019 Drainage Utility System Revenue Refunding Bonds, which was completed
on Thursday, February 7, 2019. The sales details of the bonds are presented below.
Background
At the January 22 Work Session, the City Council was presented with an Informal Report
outlining the potential savings of a refunding of some existing stormwater (drainage utility system)
debt. The 2009 Series Drainage Utility System Revenue Bonds were structured with an Optional
Call Provision, allowing the City to refund/refinance the existing bonds by purchasing the
outstanding bonds at a pre-determined price, using dollars obtained from the issue and sale of
new bonds. The Optional Call Date for the Series 2009 bonds was February 15, 2019.
outstanding drainage utility
debt. On January 18, 2019, the City finance team held rating agency calls to review details of the
transaction and provide a credit update. On January 28, Fitch and S&P both assigned and
affirmed the AA+ ratings -lien drainage system revenue debt. Key credit
g enterprise risk profile and very
strong financial risk profile.
On January 29, 2019, the Mayor and Council approved the bond ordinance authorizing the sale
and issuance of Drainage Utility System Revenue Refunding Bonds, Series 2019. The ordinance
included parameters which required specific savings to be realized in order for the sales of
refunding debt to be consummated.
The City offered the debt utilizing a competitive sale process with the assistance of our co-
financial advisors, Hilltop Securities Inc. and Estrada Hinojosa & Co. Results of the bond pricings
are highlighted on the following pages.
Overview of Pricing
Drainage Utility System issue (AA+/AA+) priced with an average life of 9.465 years
and a True Interest Cost (TIC) of 2.78%. To summarize the transaction, the City sold a total of
$31,015,000 to refinance the Drainage Utility System Revenue Bonds
for cash flow savings. The Bonds were sold with a premium such that the total proceeds
generated was $33,040,474.90.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10244
March 5, 2019
To the Mayor and Members of the City Council
Page 2 of 2
SUBJECT: FINAL RESULTS OF 2019 DRAINAGE UTILITY SYSTEM REVENUE
REFUNDING BONDS
Bids were received from nine firms. The chart below depicts the firm and the associated true
interest cost:
Bidder TIC
Morgan Stanley & Co, LLC 2.7842%
J.P. Morgan Securities LLC 2.7916%
Citigroup Global Markets Inc. 2.8031%
BOK Financial Securities, Inc. 2.8299%
Wells Fargo Bank, National Association 2.8400%
Piper Jaffray 2.8421%
FTN Financial Capital Markets 2.8563%
Robert W. Baird & Co., Inc. 2.8674%
Bank of America Merrill Lynch 2.8717%
Morgan Stanley & Co, LLC was the winning bid.
A summary of the final results compared to the original estimates is provided below:
th
Summary of January 29 Final Results Parameters
Financing Results Work Session
Total Issue Size $31,225,000 $31,015,000 Not to Exceed
$33,000,000
Total Debt Service $3,191,274 $4,534,371
Savings
True Interest Cost 3.19% 2.78%
Net Present Value $2,227,258 $3,389,502
(PV) Savings
PV Savings as % of 6.58% 10.02% More Than 3.50%
Refunded Principal
If you have any questions, please call Kevin Gunn, Interim Chief Financial Officer, at 817-392-
8500.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS