Posting Language
Title
Approve an ordinance authorizing the issuance of Tax-Exempt Program 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 not to exceed $600,000,000, to provide short-term financing on utility projects; approve the execution of all related agreements, including an Amended and Restated Revolving Credit Agreement and an Amended and Restated 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 Tax-Exempt Program Notes.
De
Lead Department
Financial Services Department.
Fiscal Note
This item has no fiscal.
For More Information:
Belinda Weaver, Treasurer, 512-974-7885.
Additional Backup Information:
In 1996 Council approved a $350 million tax-exempt commercial paper program for the Water/Wastewater and Electric Utilities. The commercial paper program allows the City to issue short-term debt for qualifying Capital Improvement Program projects to minimize borrowing costs, eliminates the need for an arbitrage calculation 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 second, 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 L...
Click here for full text