HomeMy WebLinkAbout12 - Attachment 2 - Term SheetBRANDIS TALLMAN LLC
22 Battery Street
Suite 500
San Francisco, CA 94111
Bob Mescher, Treasurer and Administrative Services Manager
Truckee Donner Public Utility District
11570 Donner Pass Road
Truckee, CA 96161
Phone: 415-912-5630
Fax: 415-912-5636
wwmbrand istallman.com
VIA EMAIL June 5, 2015
Per our recent conversations, we updated the refinancing model that was presented to the Board on
May 20th to reflect current market interest rates (as of 6/2/15 — interest rate graph attached). This
model assumes the contribution of a proportional share of the reserve fund to the refunding, leaving
a proportional share in place for the unrefunded COPS. Based on today's rates, average annual
savings are about $90,000, total savings are approximately $1,854,000, and Net Present Value (NPV)
savings are $1,373,000, or 8.71%. See Table 1 herewith.
We also performed a sensitivity analysis to monitor how an increase in interest rates affects savings.
For every 10 basis point (0.10%) increase in interest rates, average annual savings go down
approximately $6,600. See Table 2 herewith.
The Resolution sets forth a minimum NPV savings level of 5.00%. Interest rates would have to
increase another 50 basis points (or 0.50%) to reach this level. This scenario results in average annual
savings of about $53,000, and total savings of about $1.1 million.
Additionally, based on due diligence performed over the last two weeks with bond and tax counsel,
the District has an opportunity to contribute the entire reserve fund toward the refunding,
substituting a surety bond in lieu of the cash reserve fund for the unrefunded COPS. Based on today's
rates, average annual savings are about $108,000, total savings are approximately $2,247,000 and
NPV savings are $1,673,000, or 10.61%. See Table 3 herewith. We will pursue this opportunity with
the surety bond providers and District staff as we continue with the refunding process.
Best Regards,
Nicki Tallman
Member
FINRA SIPC MSRB
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