SA-3 - RESO - REFUNDING BONDS - Laserfiche WebLink

Home Browse Search

Resolution Approving the Preliminary Official Statement Tax Allocation Refunding Bonds, Series 2018A and 2018B October 2, 2018 Page 2 Bonds"). The 2003A Bonds were issued to fund redevelopment activities of benefit to the South Main Street Redevelopment Project Area. Approximately $12.5 million of the 2003A Bonds and $2.8 million of the 2003B Bonds are currently outstanding. The 2003A & B Bonds consist of interest rates ranging from 4.5% to 5% with the longest maturity (9/1/2031). In 2011, the former RDA issued its Tax Allocation Bonds, Merged Project Area, 2011 Series A (the "2011A Bonds") in the principal amount of•$66,790,000, of which $64,840,000 is currently outstanding. The interest rates on the 2011A Bonds range from 5.25% to 6.75% for the longest maturity (9/1/2028). As of August 31, 2018 the Reserve, held by the fiscal agent, is $6,727,062 (Reserve). The Reserve was established for both the 2003 and 2011 Bonds. Additionally, the 2011A Bonds have, as of August 31, 2018, unspent Bond Proceeds in the amount of $5,831,789. The Proceeds remain unspent due to the dissolving of the former Redevelopment Agency (see below). Per Assembly Bill (AB) 26 and 27, the State of California ("State") dissolved existing redevelopment agencies, which led to the formation of the Successor Agency to the Santa Ana Community Redevelopment Agency (the "Successor Agency"). The Successor Agency inherited the responsibility for repayment of the former RDA debt service including the 2003A & B and 2011A Bonds. The State introduced additional legislation, AB 1484, which allowed existing successor agencies to refund existing bonds, with approval of the Oversight Board and the State Department of Finance, for the purpose of generating a debt service savings. On June 27, 2018 City staff and the Successor Agency's bond financing team presented the refinancing opportunity for the outstanding 2003A & B and 2011A Tax Allocation Bonds to the Oversight Board for consideration. The Oversight Board voted in support of the refinancing opportunity. Similar to the action taken by the Oversight Board, on July 17, 2018 the Successor Agency also approved the refinancing. Following both approvals, the required legal and financing documents were sent to the State Department of Finance (DOF) and are currently under the 60 -day review period. City staff anticipates DOF approval of the refinancing to occur during the week of October 1, 2018. With the pending and anticipated approval from DOF imminent, as indicated by various other approved refunding transactions throughout the state, City staff is seeking approval of the Preliminary Official Statement (POS) so the marketing of the bonds to investors can begin with the goal of pricing the bonds sometime in mid-October 2018. However, the process will not commence in the event no approval is received from the DOF. CURRENT MARKET ANALYSIS Currently, market interest rates are at 3.59% however they are subject to change due to market conditions. Refinancing the 2003A & B and 2011A Bonds through the issuance of a refunding SA -3-2