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<br /> <br /> <br /> <br />Presale Report <br />City of Little Canada, Minnesota <br />October 11, 2017 <br />Page 1 <br /> <br />Executive Summary of Proposed Debt <br /> <br />Proposed Issue: $1,255,000 Taxable General Obligation Housing Improvement Area <br />Refunding Bonds, Series 2017A <br />Purpose: To current refund the City's outstanding Taxable General Obligation Housing <br />Improvement Area Bonds, Series 2009A for an interest cost savings, which <br />were issued to finance the construction of various exterior and common area <br />improvements to the Canabury Square Condominiums in the Canabury Square <br />Housing Improvement Area of the City. <br />Debt service will be paid from a housing improvement area fee. <br />Interest rates on the obligations proposed to be refunded are 4.40% to 5.30%. <br />It is estimated that the new rates will average less than 2.55%. The refunding <br />is expected to reduce interest expense by approximately $69,042 over the next <br />7 years, starting in 2018. The net present value benefit of the refunding is <br />estimated to be $63,331, equal to 5.278% of the refunded principal. The <br />minimum threshold for savings is 3.00% of the refunded principal. <br />This refunding is considered to be a “current refunding” as the obligations <br />being refunded are either callable (pre-payable) now, or will be within 90 days <br />of the date of issue of the new Bonds. <br />Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters 428A <br />and 475. <br />The Bonds do not count against the City’s legal debt limit of 3% of market <br />value. <br />The Bonds will be general obligations of the City for which its full faith, credit <br />and taxing powers are pledged. <br />Term/No Call Feature: The Bonds are being issued for a 7-year term. Principal on the Bonds will be <br />due on February 1 in the years 2019 through 2025. Interest is payable every <br />six months beginning August 1, 2018. <br />The Bonds will not be subject to prepayment. <br />Not Bank Qualified/Taxable: Because the original improvements were on private property rather than the <br />typical public improvements, the Bonds are taxable obligations and they will <br />not be designated as “bank qualified” obligations. <br />Rating: The City’s most recent bond issues were rated AA+ by Standard & Poor’s. <br />The City will request a new rating for the Bonds. <br />If the winning bidder on the Bonds elects to purchase bond insurance, the <br />rating for the issue may be higher than the City's bond rating in the event that <br />the bond rating of the insurer is higher than that of the City.