Posting Language
Title
Approve an ordinance authorizing the issuance of Taxable Commercial Paper Notes, to be issued in the form of commercial paper notes and direct purchase notes, in a maximum principal amount at any one time outstanding of $100,000,000 to provide short-term financing on utility projects; approve the execution of all related agreements, including a Revolving Credit Agreement and a Note Purchase Agreement, each with JPMorgan Chase Bank; and approve and authorize all related documents, agreements, and fees related to the City's Combined Utility Systems Taxable Program Notes.
De
Lead Department
Financial Services Department.
Fiscal Note
This item has no fiscal impact.
For More Information:
Belinda Weaver, Treasurer, 512-974-7885.
Additional Backup Information:
The City's taxable commercial paper program was established in 1998. The commercial paper program allows the City to issue short term debt for qualifying Capital Improvement Program projects to minimize borrowing costs and allows greater flexibility for the utility systems in managing cash needs. At various times during the life of the commercial paper program, when market conditions are favorable, Council is asked to issue long-term refunding bonds to retire all or a portion of the outstanding commercial paper notes.
A necessary component of the commercial paper program is liquidity, either in the form of a Letter of Credit (LOC) or a Line of Credit (Line). An LOC serves two functions: first, to provide liquidity for the commercial paper securities in the event there are no buyers in the market for the City's commercial paper, and secondly, as a guarantor for the commercial paper should the City be unable to make debt service payments on the commercial paper. A Line provides liquidity support and is less costly to the City than an LOC. In 2017, in connection with the creation of the Taxable Program Note structure, the existing LOC was replaced by a Line obtained from Barclays Bank...
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