2023-046 Sale of Series 2023 C.O. and G.O. Bonds Date: June 30,2023 Report No. 2023-046
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Competitive bond sales for the Series 2023 General Obligation Refunding and Improvement Bonds and
Certificates of Obligation.
BACKGROUND:
The purpose of this report is to provide City Council with details regarding the sale of Series 2023 General
Obligation Refunding and Improvement Bonds and Certificates of Obligation authorized on June 6, 2023,
with Bond Ordinances 23-929 and 23-930.
DISCUSSION:
On June 22, 2023, the City along with its financial advisor, Hilltop Securities, conducted competitive sales
for $72,625,00 in General Obligation (GO) Bonds and $149,140,000 in Certificates of Obligation (CO). The
delivery of funds to the City will be made on July 26, 2023.
The GO bonds were awarded to Morgan Stanley & Co., LLC, and the COs were awarded to Mesirow
Financial, Inc., the lowest true interest cost bidders. Below is a list of all participating firms that placed bids
on each issuance.
GO Participating Firms Bid Submission CO Participating Firms Bid Submission
1. Morgan Stanley & Co., LLC 3.310238 1. Mesirow Financial, Inc. 3.818192
2. Wells Fargo Bank,NA 3.330007 2. J.P. Morgan Securities, LLC 3.837763
3. J.P. Morgan Securities, LLC 3.357338 3. Morgan Stanley& Co., LLC 3.861237
4. Robert W. Baird& Co., Inc. 3.363256 4. Wells Fargo Bank,NA 3.880007
5. Jefferies, LLC 3.366682 5. Robert W. Baird& Co., Inc. 3.911140
6. Jefferies, LLC 3.912591
The GO bonds included the issuance of$34,355,000 to fund the fourth year of voter-approved projects from
the November 2019 bond election and refunded a portion of the remaining principal amount of GO and CO,
Series 2012 as well as the GO and CO, Series 2013. As approved by the City Council on June 6, 2023, the
GO bond sale met all the following required parameters listed below:
- Maximum principal amount of sale is $80,500,000;
- Final stated maturity of February 15, 2043;
- Maximum net effective interest rate of 4.50%;
- Delegation authority ends December 6, 2023
Concurrently, the City also completed a competitive CO sale for $149,140,000 to support general
government, electric, water, and wastewater projects. As approved by the City Council on June 6, 2023, the
CO sale met all the following required parameters listed below:
-Maximum principal amount of sale is $158,000,000
-Final stated maturity of February 15, 2053;
-Maximum net effective interest rate of 5.00%;
-Delegation authority ends December 6, 2023.
Date: June 30,2023 Report No. 2023-046
The all-in true interest cost for the GOs is 3.31%, and 3.82% for the COs which factors in the interest rate
received plus all issuance costs. The COs have a slightly higher borrowing cost because they have a longer
final maturity. City staff was pleased with the results of both sales.
STAFF CONTACT:
Randee Klingele, Treasury Manager
940-349-8206
randee.klingele@cityofdenton.com