CCP 06-24-1996 - Laserfiche WebLink

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I I Credit ratings are assigned by a number of nationally recognized rating agencies that annually review information and reevaluate an issuer's credit Moody's Investors Service is widely I- regarded as the rating agency of choice for general obligation bonds. For Minnesota communities that carry a credit rating on their general obligation bonds, it is generally a Moody's rating. The potential issuers of bonds for the proposed facility have the following general obligation ratings as assigned by Moody's Investors Service and published in the I Moody's Bond Record of March, 1996: Parties to the Master Agreement I City of Arden Hills not listed City of Blaine A-1 City of Coon Rapids A I City of Forest Lake Baa City of Mounds View A City of New Brighton A-1 City of Shoreview Aa I City of Spring Lake Park not listed School District NO.621, Mounds View A School District NO.16, Spring Lake Park Baa I Not parties to the Master Agreement Anoka County A-1 I Anoka County H.R.A. no general taxing authority An explanation of Moody's credit ratings is contained in Appendix IV. I. A bond's credit rating relates inversely to the interest rates which can be expected on the bonds. The Bloomberg wire service lists the generic yields for general obligation municipal bonds at. the close of each business day. The rates for April 12, 1996 are included in I Appendix V. I Current Financing Proposal The financing proposal being discussed currently calls for the County to issue general obligation bonds. This will permit the entry into the market with an "A-1" rated general I obligation bond. The County is requesting that gross revenue pledges be made by the participants to secure their position in the financing. The first dollars of revenue under this arrangement would be available to pay debt service. Operating expenses would be paid with I any additional funds available. The operating pledge within the gross revenue pledge would require that the participants operate the facility and provide for any operating deficits that may occur. Appendix VI contains an illustration of the general obligation bond option and the debt I service required annually under four separate options. Two of the options are for a 20 year financing, one with and one without a funded debt service reserve fund. The second two options are for a 25 year financing, with and without a funded debt service reserve fund. Extending the debt service amortization by five years decreases the annual debt service I obligation by approximately $50,000 to $60,000 annually. Discussions have not been completed with the County regarding what level if any of reserves I for debt or operations will be required. The illustrations contained in Appendix VI does not presume any prefunded reserves for operations. Ie I DRAFT REPORT 5/30/96 Page 12