7.5. SR 03-15-2010 - Laserfiche WebLink

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66 F E~p ~.....i.~......... F.wnavaaq~. lw...........w.i ~r~ '~~~: The Bonds will general obligation bonds secured by the City's full faith, credit and taxing powers, This pledge helps improve the credit worthiness of the bonds and reduces interest costs, The City could wait until closer to the call date to refund the Bonds, If the City believes that interest rates will stay the same or be lower within three years the call date on the Prior Bonds, then it would be prudent to wait to refund the Prior Bonds at a later date. i~; The City has historically been rated by Moody's Xnvestors Services, Many cities in Minnesota have changed to Standard & Poor's ~S&P~ for bond rating se~•vices because of S&P's broader perspective on municipal bands. The Moody's rating is at a Aa3 level, we would hope to see an increase in the rating to a AA level with S&P, The rating fees are about the sa~~ne between the two firms and thusfar the bond marl~et does not bid different interest rates for Bonds rated by S&P versus Moody's, ~~bit~ ~or~i~~~in~: The City will need to monitar its debt service funds to ensure compliance with 1RS parameters and to avoid penalties for carrying too high of a balance during the life of the issue. A final report on the Prior Bonds will be due by April, 2013 after the Prior Bonds are called, ~ ~~li~i~~i~~; Because the City is issuing less than $30 million in the calendar year, the City will be able to designate the Bands as "bank qualified"obligations, Bank qualified status broadens the market for the Bonds. Trr~lC~IC ~t~~: Interest is payable each six months. Principal on the Bonds will be due on February 1 in the years 2011 through 2023. The Bonds will be prepayable on February 1, 2020 or any date thereafter. ~~1~~' ~~irtio~, we will continue to monitor the market and the call dates for the City's outstanding debt and will alert you to any future refunding opportunities, ~~r~lo ~~o~~ ~~-°c~~ °1 a, 2f~ ~ 9 ~~