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LTC 222-2019 G.O. Bond Pricing Update 4.16.19MIAMI 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