LTC 222-2019 G.O. Bond Pricing Update MIAMI BEACH
OFFICE OF THE CITY MANAGER 222-2019
NO. LTC # LETTER TO COMMISSION
TO: Mayor Dan Gelber and Members of the City Commission
FROM: Jimmy L. Morales, City Manager ilLsoireqr
DATE: April 16, 2019 gum,
SUBJECT: G.O. Bond Pricing Update
The purpose of this LTC is to advise you of the pricing achieved from the sale of the first tranche of
general obligation (G.O.) bonds and refunding.
On Tuesday, the City team had an extremely successful foray into the bond market demonstrating
investors' confidence in the City of Miami Beach. The pricing of the G.O. bonds generated
tremendous investor interest, with $342 million in orders for $162 million in tax-exempt bonds. This
solid demand enabled the City to reduce yields in the final pricing, and the refunding portion of the
bonds provided $4.9 million in net present value savings. The true interest cost for the new money
bonds is 3.49% for 30 year debt.
The interest rate used during the voter education campaign to estimate the cost of the first tranche of
G.O. bonds to residents was 4.25% based on conservative estimates of market conditions at the time.
The final pricing of the first tranche of bonds at 3.49% is 0.76% lower than the estimated cost of
4.25%. The lower interest rate achieved represents significant savings of $28 million to our residents
in lower total payments over the 30 year life of the bonds.
With the bond proceeds in hand after the closing date of May 2, the Administration will now focus on
the implementation of projects, especially the list of 21 Quick Win projects totaling almost $40 million
over the next 12 to 14 months.
If you have any questions or need additional information, please contact John Woodruff, Chief
Financial Officer.
JLM/JW