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COUNTY OF HAWAII
<br /> Notes to the Basic Financial Statements
<br /> June 30,2007
<br /> Refunded Bonds
<br /> 2007 Series B In fiscal year 2007,the County issued$20,820,000 in refunding bonds as the
<br /> 2007 Series B general obligation bond issue. The refunding bonds have a true interest cost of
<br /> 3.900%and were issued to advance refund the$20,795,000 of callable bonds outstanding of
<br /> the 1999 Series A general obligation bond issue.
<br /> The bonds refunded bore interest at rates ranging from 5.125%to 5.625%. The par amount of
<br /> $20,820,000 plus a premium of$900,326 and a payment of$235,039 from the debt service
<br /> fund,minus$140,110 in underwriting fees,insurance and other issuance costs resulted in net
<br /> proceeds of$21,815,255. The net proceeds were used to purchase U.S. government
<br /> securities,which were deposited in an irrevocable trust administered by an escrow agent and
<br /> will provide full payment on the outstanding 1999 Series A refunded bonds on May 15,2009.
<br /> The bonds were considered defeased and are not included in the government-wide statement
<br /> of net assets.
<br /> The County's total debt service requirements over the next twelve years will decrease by
<br /> $2,464,752 as a result of the refunding,and the net economic gain(difference between the
<br /> present values on the old and new debt)after taking into account all allocable costs of
<br /> issuance of the bonds was$1,389,253.
<br /> 2007 Series C Also in fiscal year 2007,the County issued$10,787,388 in refunding bonds as
<br /> the 2007 Series C general obligation bond issue. The refunding bonds have a true interest
<br /> cost of 3.987%and were issued to advance refund the$10,627,174 of callable bonds
<br /> outstanding of the 2001 Series A general obligation bond issue.
<br /> The bonds refunded bore interest at rates ranging from 4.50%to 5.50%. The par amount of
<br /> $10,787,388 plus a premium of$409,477 and a payment of$23,218 from the debt service
<br /> fund,minus$78,408 in underwriting fees, insurance and other issuance costs resulted in net
<br /> proceeds of$11,141,675. The net proceeds were used to purchase U.S. government
<br /> securities,which were deposited in an irrevocable trust administered by an escrow agent and
<br /> will provide full payment on the outstanding 2001 Series A refunded bonds on July 15,2011.
<br /> The bonds were considered defeased and are not included in the government-wide statement
<br /> of net assets.
<br /> The County's total debt service requirements over the next fifteen years will decrease by
<br /> $1,062,695 as a result of the refunding,and the net present value savings was$851,672.
<br /> As of June 30,2007,bonds outstanding considered defeased amounted to$31,422,174.
<br /> Bond Premiums
<br /> During the year,a bond premium of$1,789,402 was received from the 2007 Series A general
<br /> obligation bonds. At June 30,2007,total unamortized bond premiums were$4,859,956,
<br /> which is being amortized over the remaining life of the respective bond issues.
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