HomeMy WebLinkAboutIR 7747 INFORMAL REPORT TO CITY COUNCIL MEMBERS No.. 7747
Q!T I ft, August 3, 1993
�oEt0RT�� To the Mayor and Members of the City Council
Subject: Refunding of Series 1991A Water and Sewer System Revenue
Bonds
In March of this year, Merrill Lynch first presented the staff with a proposal to
issue approximately $42.3 million to refund $37.7 million of the Series 1991A
Water and Sewer System Revenue Bonds. The proposal has been updated
several times during the spring and has been discussed and reviewed with the
City's financial advisor, First Southwest Company. We have concluded that it
is appropriate to set some financial objectives and identify an underwriting
team that could access the market when these objectives can be accomplished.
Specifically, we would like to achieve a present value savings level of 4%, with
an annual dollar savings of approximately $120,000 over 20 years. The
following firms are recommended for the underwriting team:
Merrill Lynch - Senior Manager
Paine Webber - Co-Manager
Apex Securities - Co-Manager
Pryor McClendon Counts - Co-Manager
001, Merrill Lynch was the senior manager for the Series 1991A issue and brought
this refunding proposal to us. Paine Webber proposed and completed an
escrow restructuring on the 1992 G. 0. Refunding issue which saved the City
$110,000. Apex Securities and Pryor McClendon Counts are both minority-
owned firms with Texas offices which have not been recently involved in a City
bond issue.
A "numbers run" by First Southwest Company indicated the present value
savings in the first half of July was about 3.0%. Interest rates will have to
come down again to make this transaction feasible. However, if Council agrees
with the objectives and the recommended underwriting team, we will prepare to
sell the bonds at the appropriate time.
At such time as a decision is made to sell these bonds, disclosure will be made
to the Attorney General relative to the Arlington litigation.
Bob Terrell 1�, ity Manager OMCIAL RECORD
BT:tm CRY SECRETARY
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—ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS