HomeMy WebLinkAboutCOM 0500.002 2002-2004 J~4Y OF h4
Harry Kim ~ William Takaba
Mayor Director
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Nancy E. Crawford
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er•:; k e;•~+` Deputy Director
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Finance I)epart>rnent
25 Aupuni Street, Room 118 • Hilo, Hawaii 96720
(808)961-8234 • Fax (808)961-8248
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April 2, 2004 -
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1"®: The hionorable Aaron Chung, Chairman,
Hawaii County Council Finance Committee
FfZ®99A: Nancy Crawford
Deputy Director of Finance
FZ~: 2003A Bond Proceeds
Per your request, I am providing an explanation of the additional proceeds from the sale
of the 2003A bond series. At the time of the bond ordinance the Council identified
projects totaling $35,312,650 and an allowance for bond issuance costs of $1,000,000.
Over the several months that the bond ordinance was considered interest rates and
demand for municipal bonds fluctuated significantly. Through a combination of diligent
work on the part of our brokers and a favorable bond market on the day of sale there
was a high demand for our bonds. The result was- that we were able to sell them at a
premium. The par value of the bonds was $36,310,000 and the premium paid for our
bonds was $1,405,177.
Interest rates on the bonds range from 2.0% to 4.7%, and were not a factor in the
premium we received. The premium was driven by demand. The low rates help us
keep down debt service costs, and made selling bonds at that time attractive.
Additionally, the issuance costs for the bonds were only $453,273. This was, in part,
because we were able to receive a very good bond insurance rate. The combination of
premium on bonds and below budget issuance costs provides approximately $1.9M
additional to spend on projects identified in the bond ordinance.
If you have any additional questions, please feel free to contact Deanna Sako at x8425.
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