04-27-2020 Council Packet - Laserfiche WebLink

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City of Lino Lakes, Minnesota Pre-Sale Summary for Issuance of Bonds $4,800,000 General Obligation Utility Revenue Bonds, Series 2020A The Council has under consideration the issuance of bonds (the “Bonds”) to finance the construction of Water Tower #3 located within the City. This document provides information relative to the proposed issuance. On March 11, 2020, the World Health Organization proclaimed the Coronavirus (COVID-19) to be a pandemic. The continually changing conditions resulting from the pandemic have created significant, ongoing volatility in the financial markets. It is not known what impact this may have on the City’s ability to issue the proposed Bonds on the timeline, at the interest rate estimates, or under the method of sale presented in this Pre-Sale Summary. This document and corresponding schedules are based on estimates made at the time this document was prepared. In the time leading up to the City’s sale, Baker Tilly Municipal Advisors will continue to monitor the market on the City’s behalf and will work with the City to address issues and/or identify alternative approaches to the City’s financing. KEY EVENTS: The following summary schedule includes the timing of some of the key events that will occur relative to the bond issuance. April 27, 2020 Council considers Parameters Resolution authorizing the sale date and terms Week of May 25, 2020 Rating conference is conducted June 8, 10:00 a.m. Competitive proposals are received June 8, 6:00 p.m. Council considers award of the Bonds July 8, 2020 (est.) Proceeds are received RATING: An application will be made to S&P Global Ratings (S&P) for a rating on the Bonds. The City’s general obligation debt is currently rated “AA+” by S&P. THE MARKET: Performance of the tax-exempt market is often measured by the Bond Buyer’s Index (“BBI”) which measures the yield of high grade municipal bonds in the 20th year for general obligation bonds rated Aa2 by Moody’s or AA by S&P (the BBI 20-Bond GO Index) and the 30th year for revenue bonds rated A1 by Moody’s or A+ by S&P (the BBI 25-Bond Revenue Index). The following chart illustrates these two indices over the past five years. Study No.: 0502.140 April 21, 2020 2.0% 3.0% 4.0% 5.0% 6.0%Index RateBBI 20-Bond (GO) and 25-Bond (Revenue) Indices for 5 Years Ending 4/16/2020 Revenue GO 4/16/2020 Revenue: 2.75% GO: 2.25% Data Source: The Bond Buyer