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GARLAND
POLICY REPORT
Work Session Item 3.b.
City Council Work Session Agenda
Meeting Date:
07/17/2023
Item Title:
Bond Refunding - Electric Utility System Commercial Paper Notes
Submitted By:
Matt Watson
Strategic Focus Areas
:
Sound Governance and Finances
ISSUE
Consider refunding approximately $65 million of Electric Utility System Commercial Paper Notes, Series 2021. The purpose of this transaction is to refund a portion of variable rate commercial paper notes with fixed rate long-term debt.
OPTIONS
Authorize staff to refund approximately $65 million of Electric Utility System Commercial paper Notes, Series 2021.
Do not approve the refunding transaction.
RECOMMENDATION
Unless otherwise directed by Council, this item will be scheduled for formal consideration at the August 1, 2023 Regular Meeting.
BACKGROUND
The Electric Utility Commercial Paper Program finances the construction of various capital improvement projects for the Electric Utility. Funding capacity of this variable rate program is $150 million with approximately $65 million of capital spending available for refunding with fixed rate long-term debt.
CONSIDERATION
The Refunding Bonds will be fixed rate debt with a 30-year amortization period. The average annual debt service is projected to be $4.0 million for the life of the bonds, from 2024 through 2053. The projected interest rate is 4.46%. The exact amount of annual debt service and interest is subject to market conditions between now and the final pricing.
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