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RFP No. 21-025
<br />EXHIBIT B
<br />90% UAL POB Hybrid Level Debt Service
<br />$80,000,000
<br />$642 Million POB,
<br />$254 Million Deferred UAL Costs
<br />$20,000,000 • . $161 Million Budget Savings
<br />• $216 Million NPV Savings = 34%
<br />AA- Scale + 25 bps = 3.00 T/C%
<br />$60,000,000
<br />• POB Debt Service
<br />Misc. Base #14 & #16
<br />$50,000,000
<br />Budgetary Savings
<br />• ... Original UAL Payments
<br />$40,000,000
<br />$30,000,000
<br />$20,000,000
<br />$50,000,000
<br />$0
<br />2022 2023 2024 2025 2026 2022 2028 2029 2030 2031 2032 2033 2034 2035 2036 2032 2038 2039 2040 2041 2042 2043 2044 2045 2046 2042 2048
<br />The chart below is a summary comparison of the two options. Because the average life of the
<br />UAL payments for the 50% POB option is 24 years and the 90% option has an average life of 18.5
<br />years the True Interest Cost (TIC) is higher for the smaller POB issuance. However, the 50% option
<br />offers a greater percentage of savings.
<br />It is important to delineate the difference between true budgetary savings and deferred UAL
<br />savings. POBs refinancing the City's future UAL payments at a lower interest rate. The difference
<br />between the scheduled UAL payments and the payments on the POBs represent deferred UAL
<br />payments, which total $184 million or $253 million in deferred UAL payments / $145 million and
<br />$217 million Net Present Value (NPV) for the 50% and 90% POB, respectively. In other words,
<br />this amount represents the savings from what the City would be required to pay in the future.
<br />Since these savings are predicated on future rising payments, this amount cannot be construed
<br />as actual budgetary cash flows savings.
<br />We measure budgetary cash flow savings by comparing the POB debt service versus the FY 21-
<br />22 UAL payment amount of $56.2 million. As noted in the table below, the annual debt services
<br />on POBs are equal to $51.6 million and $46.2 million for the 50% and 90% POB respectively. The
<br />green shaded area in the chart above, illustrates true cash flow or budgetary savings realized
<br />from a POB issue, which totals $37 million or $161 million for 50% and 90% POBs.
<br />In either case, the savings from a POB is substantial.
<br />Par Value
<br />Total Debt Service
<br />Avg. Annual Payment
<br />Budgetary Savings
<br />Deferred UAL Savings
<br />NPV Savings
<br />% Savings
<br />TIC%
<br />$ 357,800,000 $
<br />641,865,000
<br />528,044,092
<br />884,946,714
<br />51,696,630
<br />46,171,181
<br />37, 742, 327
<br />160, 909, 483
<br />183,699,037
<br />253,872,795
<br />144,759,624
<br />217,109,100
<br />41%
<br />34%
<br />3.1696
<br />3.019-6
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