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December 17, 2012 <br />City of Louisville <br />Refunding Analysis of <br />Series 2003 Water Revenue Bonds/ <br />CWRPDA Loan <br />After our discussion of the prospective refinancing of the City’s 2003 Water Loan at the <br />October 15 Finance Committee meeting, an alternative refunding structure was <br />developed to show the effect of paying off the refunding one year earlier. <br />The refunding structure discussed on October 15 assumes the repayment period <br />matches that of the 2003 loan, with the final payment in 2024. At an assumed interest <br />rate of 1.90%. The annual payments are reduced by $65,000 to $70,000 per year, with <br />a total estimated savings of over $830,000. The estimated present benefit to the City is <br />estimated at $740,000 (8.3 % of the refunded bonds). <br />For comparison, we have run a version of the refunding which assumes a final payment <br />in 2023, and have reduced the interest rate estimate to 1.80% to reflect the shorter <br />average life of the issue. The annual savings through 2023 are estimated at $5,000 to <br />$10,000 per year, with $937,125 of savings realized in 2024. Total estimated savings <br />are over $1,000,000, and the estimated present benefit to the City is estimated at <br />$7,830,000 (9.3 % of the refunded bonds). <br />C:\Documents\10.26.2012\Louisville\Lville.refunding.summar <br />y.12.17.doc <br />6 <br />