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October 15, 2012 <br />City of Louisville <br />Summary Refunding Analysis of <br />Series 2003 Water Revenue Bonds/ <br />CWRPDA Loan <br />Amount Outstanding: $8,905,000 <br />Maturities: 2013 – 2024 <br />Interest Rates: 3.00% to 4.125% <br />Prepayment Option: $8,290,000 of the 2003 Bonds with an average interest rate <br />of 3.80% are eligible for prepayment on 12/1/2013 with no <br />prepayment penalty. <br />Recent Market Rates: Recent bank lending for similar issues has ranged from <br />1.80% to 2.00%. The results of refunding within this range <br />would reduce annual payments by $65,000 to $70,000 per <br />year, with a total estimated savings of over $830,000. The <br />estimated present benefit to the City is estimated at <br />$740,000 (8.3 % of the refunded bonds). Savings are <br />estimated after payment of all costs. <br />Comments: The potential refunding savings for the 2003 Bonds may <br />increase by another $100,000 to $125,000 if interest rates <br />remain at today’s level. However, savings will begin to <br />diminish after the prepayment date in December, 2013. <br />The City is in a position to proceed with a refunding in the <br />next 90 days. In any case, the City should anticipate <br />proceeding with a refunding within the next 12 months. <br />If authorized to proceed, a bond resolution can be prepared <br />for consideration for the Board meetings in November and <br />December. Closing would be projected for December or <br />January. <br />7 <br />