DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Amendment Authorizing the issuance of $47,000,000 Variable Rate Certificates of Obligation Taxable Series 2016
SUMMARY:
This ordinance amends certain terms of the authorization for the issuance of $47,000,000 “City of San Antonio, Texas Variable Rate Certificates of Obligation, Taxable Series 2016” and other matters.
BACKGROUND INFORMATION:
The City issued “$47,000,000 City of San Antonio, Texas Variable Rate Certificates of Obligation, Taxable Series 2016” (the “Certificates”) through private placement with Regions Commercial Equipment Finance LLC (“Regions”). The Certificates were issued to fund the acquisition of the Frost Bank Tower building located at 100 West Houston Street, San Antonio, Texas. The Certificates provided for multi-modal conversion (including conversion to tax-exempt obligations) at the expiration of the initial interest rate period on January 31, 2020.
On January 16, 2020 City Council approved an amendment to the agreement to extend the term rate period from January 31, 2020 to July 31, 2020 and the mandatory principal payment from February 1, 2020 to February 1, 2021.
The term rate period is set to expire on July 31, 2020 and requires a principal payment in the amount of $1.2 million on February 1, 2021. The City is amending the agreement to extend the term rate period from July 31, 2020 to July 31, 2021 and the mandatory principal payment from February 1, 2021 to February 1, 2022. This amendment will allow for the timing of the financing plan for the Frost Bank Tower to coincide with the renovation timeline.
ISSUE:
The aforementioned issuance of the Certificates was issued to fund the acquisition of the Frost Bank Tower building and the amendment would extend the term rate period from July 31, 2020 to July 31, 2021 and the mandatory principal payment from February 1, 2021 to February 1, 2022.
ALTERNATIVES:
The mandatory principal payment could be paid by the City Tower and Garage Fund that was established for this project. However, this alternative is not budgeted and would negatively impact capacity for future debt issuances related to the renovation of the building.
FISCAL IMPACT:
Any costs pertaining to the proposed amendment will be paid for from the City Tower and Garage Fund.
RECOMMENDATION:
Staff recommends approval of this amendment to the authorization for the issuance of $47,000,000 Variable Rate Certificates of Obligation, Taxable Series 2016.