CITY OF ALBUQUERQUE by P068jl

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									                                       CITY OF ALBUQUERQUE
                                        Albuquerque, New Mexico
                                           Office of the Mayor

 Mayor Martin J. Chávez



INTER-OFFICE MEMORANDUM                                            DATE: March 6, 2008


TO:                 Brad Winter, President - City Council

FROM:               Martin J. Chávez, Mayor

SUBJECT:      Bond Ordinance – Authorizing the Issuance & Sale of Approximately $22,965,000 City
of Albuquerque, NM Airport Taxable & Tax-Exempt Refunding Revenue Bonds, Series 2008 A & B.

The attached bond ordinance authorizes the issuance and sale of approximately $22,965,000 City of
Albuquerque, NM Airport Taxable & Tax-Exempt Refunding Revenue Bonds, Series 2008 A & B. It is
estimated that the Series 2008 A & B Bonds will be issued as follows: (1) $17,500,000 as Airport
Taxable Refunding Revenue Bonds, Series 2008A and (2) $5,465,000 as Airport Tax-Exempt
Refunding Revenue Bonds, Series 2008B.

The purpose of the Series 2008A Bonds is to refund $17,000,000 Series 2000B Airport Taxable
Adjustable Tender Revenue bonds (“The 2000B Bonds”) and the purpose of the Series 2008B
Bonds is to refund $5,200,000 Series 2000A Airport Tax-Exempt Adjustable Tender Revenue Bonds
(“the 2000A Bonds”).

The 2000 A & B Bonds will be converted to fixed rate through a current refunding of such bonds.
The refunding is necessary due to the bond insurer’s credit perception in the market, which affects
issuers nationally and is not just a local City of Albuquerque issue. Although the bonds remain “AAA”
rated by Moody’s and S&P and “AA” rated by Fitch, interest costs to the City have increased
significantly. The Series 2000 A & B Bonds are variable rate bonds, which financed the rental car
facility and were insured by AMBAC. The debt service is paid from the net revenues of the airport
system.

The average interest costs since issuance for the Series 2000 A & B Bond are 2.56% and 3.53%,
respectively. The debt service on the Series 2000 A Bonds was budgeted at 4.75% and for the
Series 2000 B bonds at 6.0%. The rate was most recently reset to 8.0% this week for both the
Series 2000 A & B Bonds and the average rate over the current fiscal year to date is 3.95% - Series
2000 A Bonds and 5.28% - Series 2000 B Bonds. The City’s finance team plans to issue fixed rate
bonds to pay off and retire the Series 2000 A & B Bonds. The expected all-in-cost, which includes
cost of issuance, is estimated at 5.10% - Series 2008A Taxable Bonds and 4.98% for the Series
2008B Tax-Exempt Bonds as of March 4, 2008. The maturity on the bonds will not be extended
beyond the original maturity of 2020 – Series 2000 A Bonds and 2015 – Series 2000 B Bonds.

The attached ordinance is hereby forwarded to the council for its consideration and action.
RECOMMENDED BY:                                     RECOMMENDED BY:

_________________________                           ________________________
Tanda Meadors, Director                             Nicholas Bakas, Director
Dept. of Finance & Administrative Srvcs.            Aviation Department

APPROVED BY:                                        REVIEWED BY:

_________________________                           ________________________
Anna Lamberson, Chief Financial Officer             Robert M. White, City Attorney

APPROVED BY:

_________________________
Bruce J. Perlman, Ph.D., Chief Administrative Officer

								
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