CC PACKET 05111982 - Laserfiche WebLink

Home Browse Search

EHLERS AND ASSOCIATES, INC. FINANCIAL SPECIALISTS FIRST NATIONAL-SOO LINE CONCOURSE 507 MARQUETTE AVE. MINNEAPOLIS. MINNESOTA 55402 339-8291 (AREA CODE 612) File: Financial Specialists: Ehlers and Associates, Inc. Please distribute to governing body members May 1, 1982 Newsletter The bond market struggles to come back, but with even a modest improvement the pent up demand for long term funds surfaces and interest rates head up again. There is no doubt that our concern of ages ago was justified: Overuse of tax exempt financing has DOW JONES MUNICIPALS diluted the interest saving inherent in tax exemption. ° WEEKLY AVERAGE OF TWENTY 121 117 20-YEAR BONDS 11 LAST WEEK 13.88% 0 PAEV.WE K 13.81% IDBI 1082 J A 5 0 N D J F M ]Ui THE WALL STREET JOURNAL Monday, April 12, 1982 * * * * * * * * * * Minnesota general obligation municipal bond interest rate limits are now one percent above the Bond Buyer Index of 20, 20 year bonds, rounded to the next highest full percent, as determined by the • Commissioner of Finance on the 20th of each preceding month. G.O. bonds payable from special assess- ments [sic], as well as non-G.O. bonds, have a one percent higher limit (15% for April). * * * * * * * * * * New ideas keep entering the tax exempt bond market such as "puts", letters of credit, insurance, stepped coupon bonds, zero coupon bonds, mandatory call term bonds, each of which is said to be a "sure" way to reduce interest rates. Some have promise, but, as with some old "new" ideas, such as deep discount bids there are apt to be trade-offs. We tend to stay with proven ways until a clear advantage is shown from novel approaches. * * * * * * * * * * Eden Prairie, Minnesota, completed its $18 million tax increment financing. Unique not only because of its size (for tax increment projects in this area, at least) and because it was insured (first AMBAC insured G.O. bonds in Minnesota), the financing is particularly noteworthy because of its pur- pose. The City will now complete an extensive complex of Federal , Interstate, State, County and City highway interchanges for which funds had dried up which will greatly improve traffic flow, public safety, the prosperity of the City's major commercial center and the City's own economic base. * * * * * * * * * * Ehlers and Associates will have an interesting seminar on May 5 on coping with city revenue problems. Invitations were limited to twelve counties in and around the metro area but some openings may remain when this newsletter is received which will be available on a first come first served basis. The cost is $15 to cover lunch and materials. This meeting will be repeated if there is a demand. Very truly yours, WEhlers . • it