2018-072 CO & GO Bond SaleDate: June 15, 2018 Report No. 2018-072
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
City’s most recent competitive General Obligation and Certificates of Obligation bond sales.
BACKGROUND:
The purpose of this report is to provide the City Council with details regarding the sale of Series
2018 General Obligation Bonds and Certificates of Obligation authorized on April 17, 2018.
DISCUSSION:
On June 14, 2018 the City along with its financial advisor, First Southwest Company, conducted
a competitive sale of $19,235,000 in General Obligation (GO) Bonds and $9,555,000 in
Certificates of Obligation (CO). The delivery date of the funds to the City will be on July 12,
2018. The participating underwriting firms for the GO bond sale were: Robert W. Baird & Co.,
Inc.; Citigroup Global Markets Inc.; BOK Financial Securities, Inc. and UBS Financial Services,
Inc.. The participating underwriting firms for the CO sale were the same bidders as above. The
GO bonds were awarded to BOK Financial Securities, Inc. and the COs bonds were awarded to
Robert W. Baird & Co., Inc. as the lowest true interest cost bidders for each competitive sale.
The GO bonds included the issuance of $19.235 million to fund the fourth year of projects
approved by voters in the November 2014 bond election. As approved by the City Council on
May 22, 2018 the bond sale met all of the following required parameters listed below:
1) The maximum principal amount of bonds shall not exceed $19,750,000;
2) Final stated maturity of February 15, 2038;
3) Maximum net effective interest rate of 3.85%
4) The sale must occur prior to November 22, 2018.
The all-in true interest cost for the GOs is 3.372%, which factors in the cost of issuance.
Concurrently the City also completed the competitive CO sale for general government projects.
As approved by the City Council on May 22, 2018, the CO sale met all of the following required
parameters listed below:
1) The maximum principal amount of the certificates of obligation shall not exceed
$10,110,000;
2) The final stated maturity shall not exceed February 15, 2038;
3) The maximum net effective interest rate shall not exceed 3.85%;
4) The sale must occur prior to November 22, 2018.
The all-in true interest cost for the COs is 3.056%, which factors in the cost of issuance. City
staff was pleased with the results of both sales.
Date: June 15, 2018 Report No. 2018-072
Please do not hesitate to contact me if you have any further questions on the results of the City’s
most recent debt issuance.
STAFF CONTACT:
Antonio Puente, Jr., Director of Finance
(940)-349-7283
Antonio.Puente@cityofdenton.com