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Description
Capitol Projects and Bond Oversight Committee Meeting on 4/14/20.
10:00 AM in room 171 of the Capitol Annex.
Part 2 of the CPBOC Meeting. A live testimony arrived immediately after adjourning. Meeting was reconvened as all members were still present.
Live Stream provided by LRC Staff
A
B
Yours,
sir
again,
thank
you
very
much.
Just
maybe
start
off.
I
do
have
a
considerable
amount
of
items
today
in
just
one
general
comment
and
all
these
bond
transactions
we
do
have
dates
and
the
best
available
information
was
put
in
the
packet,
but
the
market,
much
like
the
equity
market,
is
completely
dislodged.
We
are
seeing
some
transactions
get
out
in
price,
it's
starting
to
open
up
and
actually
rates
have
stabilized
some,
partly
the
Fed
buying
in
the
market
and
and
partly
just
the
massive
outflow.
B
So
just
the
timing
of
all
these
transactions
is
really
subject
to
change
day
to
day
sure
the
first
item
I
have
for
consideration
is
the
Kentucky
Economic
Development
Finance
Authority.
This
is
for
Christian
care
communities.
It
is
a
conduit
transaction,
so
there's
no
legal
liability
or
requirement
for
careful
or
the
state
to
service
that
they're
just
accessing
the
bond
market
through
katfoe
as
a
conduit
issuer.
There's
a
quite
a
few
properties
in
that
this
transaction
is
for
and
that's
in
the
packet
happy
to
take
any
questions
and
it's
it
is
scheduled
for
pricing
and
mail.
A
C
B
So
primarily
Catholic
and
issue.
My
understand
sachet
orally,
but
Tesla
in
this
instance
is
just
a
conduit.
So
this
is
outside
third
party.
Yes,
that
would
access
through
the
CAD
for
conduit
CAD
for
could
issue.
My
understandings
can
issue
bonds
statutorily.
However,
the
bonds
for
you,
though,
is
serviced
by
the
general
funds
who
traditionally
get
they
go
through
state
problem.
C
C
B
Mean
the
answer
is
yes,
because
the
market
has
changed
I
believe
we
had
originally
Eastern
Kentucky
University
would
be
example.
They
were
originally
on
the
agenda.
We
we
had
to
pull
it
because
we
believe
that
there
will
be
some
changes.
So
if
it
is
a
state
issuer,
you
know
we
we
would
do
like
we
did
for
East
and
then
pull
it
and
make
sure
we
present
the
correct
structure.
There's
a
little
bit
more,
these
conduits,
where
the
state's
not
a
liability.
B
A
B
This
this
transaction
should
look
somewhat
familiar.
It
is
state
property
in
Billings
for
mission
project
123.
This
will
be
a
taxable
series
to
provide
the
thirty-five
million
dollars
in
general
fund
support
that
was
approved
in
House
bill
99
for
U
of
L
that
to
our
Jewish
and
some
of
the
other
associated
assets.
This
is
for
basically
operating
for
them.
So,
given
that
its
operating,
it
has
to
be
taxable
as
well
as
alone.
B
B
This
is
another
transaction
generous:
each
transactions
to
refund
believe
2011,
Series,
A
and
C.
This
is
this
is
a
refunding
for
economic
savings.
The
this
split
is
about
four
point:
six
million
Series
a
and
about
six
point:
two
in
Serie
C,
with
the
net
present
value
savings
of
Series
A,
just
under
a
half
a
million
dollars,
and
about
three
hundred
and
twelve
thousand
dollars
for
Serie
C.
This
is
this
will
be
a
competitive
sale
and
financing
team
and
the
cash
flows
are
in
the
packet.
A
B
This
is
a
little
bit
of
a
unique
transaction,
so
just
a
little
bit
of
background,
the
state,
the
Commonwealth,
has
one
derivative
transaction.
This
was
done
a
number
of
years
ago
and
at
the
time
it
made
economic
sense
because
it
was
a
lower
interest
rate.
I've
never
been
a
big
fan
of
derivatives,
and
certainly
this
has
proved
you
know.
Normally,
when
we
do
a
bond
transaction,
we
you
know
we
do
our
post
issuance
compliance
and
paid
debt
service,
but
this
is
the
one
that
we've
had
to
do.
B
Some
work
with
it
originally
was
entered
into
transaction
with
Citigroup
2008
Citigroup
had
financial
issues
and
there's
various
rating
requirements
that
could
have
been
tripped
in
the
legal
documents.
It
was
moved
to
Deutsche,
Bank
and
they're.
The
counterparty
in
this
derivative
and
they're
having
some
financial
issues.
B
They've
been
a
series
of
downgrades
and
we
have
been
watching
this
for
over
a
year
and
when
we
ran
the
cash
flows,
it's
kind
of
a
day-to-day
price
and
we
believe
that
at
no
cost
of
the
Commonwealth
we
could
terminate
the
four
swap
agreements
or
excuse
me
the
three
swap
agreements
and
basically
get
out
of
it.
So
while
this
is
a
refunding,
we
are
not
getting
the
traditional
economic
savings
just
by
the
nature
of
a
derivative.
The
termination
payment
basically
offsets
the
savings
of
interest
rates,
but
this
is
for
a
de-risking.
B
We
thought
it
would
be
prudent
if
we
could
get
out
at
no
cost
and
go
to
a
fixed
rate
instead
of
a
synthetic,
fixed
rate.
We
would
do
that,
so
this
is
probably
of
all
the
transactions
will
bring
for
you.
This
is
probably
the
most
day-to-day
because
it
also
matters
where
the
taxable
market
and
tax-exempt
is
but,
but
we
we
feel
that
a
de-risking
and
getting
at
it
it
knows,
is
you
know
as
much
as
a
zero
savings
I
think
it
was
a
couple
hundred
thousand
dollars
when
we
ran
it
originally.
B
Is
a
follow-up
item?
This
is
a
traditional
condo
at
housing,
transaction
for
Chapel,
House
Apartments
located
in
Louisville
Kentucky,
the
data
say
I
was
the
10th
of
March
and
the
net
Percy's
was
about
thirteen
point.
Five
million
dollars.
Information
about
the
project
and
cost
of
issuance
is
in
your
packet.
All.
B
A
A
B
Both
new
money
transactions,
we
will
probably
see
less
refunding
for
the
foreseeable
future.
The
SFCC
portion
was
just
over
1%,
estimated
par
with
the
locals
being
about
99
percent,
total
par
for
both
issuance
Kevon
is
eighty
eight
point.
Three
million
dollars
and
no
tax
increase
is
necessary
to
fund
either
project.