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Bond Accountability Commission 2 Recommendations Page 52

more than one-half of what the comparison districts obtained on a percentage basis. •

CMSD’s costs of issuance including bond insurance were low to midrange on a percentage basis. It appears there is some room for improvement in this category, as some other districts achieved lower costs, but certainly the costs do not appear unreasonably high.

On an overall basis, CMSD’s upfront costs were low. The exceptional underwriter’s discounts helped CMSD achieve great results relative to the comparison districts.

Upfront Cost Comparison Analysis Based on Size of Bonds

Date

1 2 3 4 5 6 7 8 9 10

Jul. 2004 Dec. 2003 Oct. 2006 Oct. 2002 Sep. 2006 Jul. 2003 Jun. 2001 Oct. 2003 Jun. 2003 Jan. 2004

District

Cleveland Municipal School District Toledo City School District Columbus City School District Cleveland Municipal School District City of Cincinnati School District Dayton City School District City of Cincinnati School District City of Cincinnati School District Dayton City School District Akron Public Schools

Principal Amount

$125,000,000 $103,600,000 $282,864,897 $124,920,000 $380,945,000 $151,555,000 $123,945,000 $480,000,000 $99,500,000 $215,000,000

Underwriter's Discount

$342,500 unavailable $1,357,522 $312,410 $1,619,016 $681,998 $565,189 $2,040,000 $472,625 $1,542,078

Discount as a %

0.27% n/a 0.48% 0.25% 0.43% 0.45% 0.46% 0.43% 0.48% 0.72%

Costs of Issuance Incl. Bond Ins.

$559,901 unavailable $1,038,574 $747,084 $1,640,668 $676,454 $606,483 $2,714,316 $677,047 $2,098,716

Costs as a %

0.45% n/a 0.37% 0.60% 0.43% 0.45% 0.49% 0.57% 0.68% 0.98%

Total Upfront Costs

Costs as a %

$902,401 $758,352 $2,396,095 $1,059,493 $3,259,684 $1,358,451 $1,171,672 $4,754,316 $1,149,672 $3,640,794

0.72% 0.73% 0.85% 0.85% 0.86% 0.90% 0.95% 0.99% 1.16% 1.69%

Cost of Notes versus Bonds CMSD issued notes as a strategy to achieve several goals, including to reduce financing costs. As shown in the table below, “Upfront Costs for CMSD’s Notes,” the Notes in general were significantly less expensive than the Bonds. For comparative purposes, issuance costs are often expressed as a percentage of the amount issued. For CMSD’s 2001, 2005, 2007 and 2007A Note issuances, the underwriter’s discount ranged from 0.02% to 0.06%. This is approximately 10% to 25%

BAC2 Recomendations Final 04062010  
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