HomeMy WebLinkAboutCOM 0441.000 1998-2000 jV OF„
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Stephen K. Yamashiro ~~41~ Harry A. Takahashi
Mayor Director
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DEPARTMENT OF F ~
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25 Aupuni Street, Aoom 118 • Hilo, Hawaii 96720-4252
(808)961-8234 Fax (808)961-8248
September 13, 1999
The Honorable James Arakaki, Chairman
and Members of the Council
County of Hawaii
25 Aupuni Street
Hilo, HI 96720
Dear Chairman Arakaki and Council Members:
COUNTY OF HAWAII,
GENERAL OBLIGATION BONDS,
SERIES 1999A $30,000,000 and
REFUNDING SERIES B $18,940,000
Pursuant to County Council Ordinance No. 99-41 and Ordinance No. 99-68,
I have proceeded with the issuance and sale of $30,000,000 principal amount of
General Obligation Bonds, 1999 Series A and $18,940,000 principal amount of
General Obligation Refunding Bonds, 1999 Series B, of the County (the
"Bonds"), and wish to submit the following report on the issuance and sale
thereof:
1. After review of proposals submitted by several underwriters,
A. G. Edwards & Sons, Inc. was requested to underwrite the Bonds with an
underwriting discount of $3.35 per $1,000 principal amount of the Bonds. In
connection therewith, copies of the Preliminary Official Statement containing
information on the Bonds and various financial information regarding the
County of Hawaii were distributed to prospective investors.
2. Based on market conditions prevailing at the time of the underwriting
of the Bonds and other relevant factors, it was determined that:
(i) $30,000,000 principal amount of the Bonds will be issued to provide funds
in accordance with Ordinance No. 99-41; and (ii) $18,940,000 principal amount
of the Bonds will be issued to provide funds in accordance with Ordinance
No. 99-68 which will be sufficient when invested in United States Treasury
securities to refund $18,355,000 principal amount of the County's outstanding
1978 Refunding Series Bonds. .L~
Comm. Na /
File No.~ FND 6 DD
Ref• To: F
Ref. Date-~~~~^
The Honorable James Arakaki, Chairman,
and Members of the Council
September 15, 1999
Page 2
3. The refunding of the Refunded Bonds will result, after taking into
account all allocable costs of issuance of the Bonds, in present value savings
in the debt service payable by the County on its general obligation bonds of
approximately $1,110,488 or 6.050057% of the principal amount of the Refunded
Bonds, using the restricted discount rate on the Bonds. The amount of such
savings has been verified by Causey, Demsey and Moore.
4. Financial Security Assurance Inc., has committed to issue and deliver
a policy insuring the payment of scheduled principal of and interest on the
Bonds. Based on such insurance, the Bonds will be rated "AAA" by Standard &
Poors' Corporation and "Aaa" by Moody's Investors Services, and the Bonds will
bear interest at rates that will be lower than would have been the case if the
Bonds were not so insured.
5. A Bond Purchase Contract was negotiated and entered into on
September 1, 1999, with A. G. Edwards & Sons, Inc., pursuant to which the
Bonds were sold at an aggregate purchase price of $48,941,167.60, plus accrued
interest on the Bonds from their date to the date of delivery thereof and
payment therefor, and upon such terms and conditions as I have determined to
be appropriate and in the best interests of the County of Hawaii. The Bonds
will mature in the principal amounts in the years and will bear interest at
the rates set forth in Schedules A & B hereto. The true interest cost on the
Bonds (the rate obtained by doubling the semiannual interest rate compounded '
semiannually necessary to discount the principal and interest on the Bonds
from the dates of payment thereof to the date of the Bonds and the purchase
price), after taking into account the cost of the insurance policy, are
5.482593% for the 1999 Series A and 4.815996% for the 1999 Series B.
6. Bank of Hawaii, acting through its Pacific Century Trust division, in
Honolulu, Hawaii, has been appointed to act as paying agent and registrar for
the Bonds and as refunding trustee.
7. Arrangements have been made for the Bonds to be authenticated by Bank
of Hawaii, acting through its Pacific Century Trust division, and thereafter
to be delivered to Bank of Hawaii, acting through its Pacific Century Trust
division at the request of A. G. Edwards & Sons, Inc, on September 14, 1999,
on which date the payment for and delivery of the Bonds will be made.
Very Truly Yours
Harry A. T kahasl i
Director o~ Finance
SCHEDULE A
$30,000,000 principal amount of General Obligation Bonds, 1999 Series A (the
"Bonds"), of the County of Hawaii, Hawaii. The Bonds are in fully registered form without
coupons, are dated August 15, 1999, are issuable in the denomination of $5,000 or any integral
multiple of $5,000, and mature on May 15 in each year of the years and in the principal amounts
set forth in the table below, with the Bonds maturing in a particular yeaz bearing interest payable
semiannually each May 15 and November 15, commencing November 15, 1999, at the rate per
annum set opposite each year as set forth in the table below:
Principal Interest Yield Principal Interest Yield
Year Amount Rate Year Amount Rate
2003 $1,125,000 4.375% 4.450% 2012 $1,805,000 5.250% 5.375%
2004 1,175,000 5.750 4.550 2013 1,895,000 5.375 5.450
2005 1,240,000 4.700 4.700 2014 2,000,000 5.375 5.500
2006 1,300,000 5.750 4.800 2015 2,105,000 5.400 5.550
2007 1,375,000 5.750 4.900 2016 2,220,000 5.500 5.600
2008 1,455,000 5.750 5.000 2017 2,345,000 5.500 6.640
2009 1,535,00 6.000 5.080 2018 2,470,000 5.625 6.660
2010 1,630,000 5.125 5.200 2019 2,610,000 5.625 5.680
2011 1,715,000 5.250 5.300
The Bonds are subject to redemption prior to the stated maturity thereof. The Bonds are
transferable and exchangeable upon the terms and conditions set forth therein.
3
63174247.03
SCHEDULE B
$18,940,000 principal amount of General Obligation Refunding Bonds, 1999 Series B
(the "Bonds"), of the County of Hawaii, Hawaii. The Bonds aze in fully registered form without
coupons, are dated August 15, 1999, aze issuable in the denomination of $5,000 or any integral
multiple of $5,000, and mature on May 15 in each year of the years and in the principal amotmts
set forth in the table below, with the Bonds maturing in a particulaz yeaz bearing interest payable
semiannually each May 15 and November 15, commencing November 15, 1999, at the rate per
annum set opposite each yeaz as set forth in the table below:
Principal Interest Yield
Year Amoun Rate
2000 $2,270,000 4.250% 3.780%
2001 2,085,000 4.250 4.180
2002 2,175,000 4.375 4.375
2003 2,270,000 4.375 4.450
2004 2,365,000 4.500 4.550
2005 2,475,000 4.700 4.700
2006 2,590,000 4.750 4.800
2007 2,7]0,000 4.875 4.900
The Bonds aze not subject to redemption prior to the stated maturity thereof. The Bonds
aze transferable and exchangeable upon the terms and conditions set forth therein.
3
63174296.02