THE FINANCE AND ADMINISTRATIVE SERVICES DEPARTMENT AND THE PORT EVERGLADES DEPARTMENT RECOMMEND APPROVAL.
On May 13, 2014 (Item No. 22), the Broward County Board of County Commissioners (Board) approved an Alternate Letter of Credit (LOC) from Royal Bank of Canada (RBC) on the Subordinate Port Facilities Refunding Revenue Bonds, Series 2008. In 2008, the County issued its Subordinate Port Facilities Refunding Revenue Bonds in the par amount of $46,145,000 for the purpose of refunding the Series 1998 Bonds. The 2008 Bonds were issued in weekly variable rate mode with a floating-to-fixed swap whereby the Port pays to a counterparty a synthetic fixed interest rate of 3.642%, and receives from the counterparty a variable rate. This financing structure requires the use of an LOC, which serves two purposes: (1) it provides liquidity, whereby the issuing bank will purchase the bonds in the event of a failed remarketing, and; (2) a credit enhancement to the investor. The outstanding principal on the Series 2008 Bonds as of September 30, 2018 was $24,975,00, with final maturity on September 1, 2027.
The existing LOC from RBC expires on October 2, 2019. Pursuant to Section 9.02 of the Letter of Credit Reimbursement Agreement, the Stated Expiration Date may be extended by RBC upon written request of the County in the form of Exhibit B (see Exhibit 1) given to RBC at least 120 days prior to the Stated Expiration Date. Within 60 days after receipt of a request for extension, RBC shall notify the County of its decision to renew.
This item authorizes the County Administrator to submit the request for the extension of the current LOC for an additional term up to the final debt maturity date of September 1, 2027, and to execute the LOC if RBC offers an extension. If RBC declines to extend the current LOC, the County will issue a competitive solicitation for a new LOC. |