HomeMy WebLinkAboutCOM 0076.006 1998-2000 ~y~
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Stephen K. Yamashiro Harry A. Takahashi
Mnyor Direclar
County of Hawaii
DEPARTMENT OF FINANCE S.K. Schulte
Deputy
25 Aupuni Street, Room I I8 • Hilo, Hawaii 96720-4252
(808) 961-8234 Fax (808) 961-8248
May 3, 1999
TO: Council Member J. Curtis Tyler, III
FROM: Harry A. Takahashi, Finance Director
SUBJ: Bi1122, 1978 Bond Refinance
Telephone Inquiry - 5/3/99
You have asked us what is the scenario for refinancing bond but not using the Sinking Fund. Our
response is as follows:
The purpose of the refunding is to enable us to utilize the Sinking Fund for working capital. Upon
refunding, the Sinking Fund terminates and proceeds transfer to the General Fund. These funds will be
subject to arbitrage earnings in which any interest earnings above the refunded bond's interest rate will
go to the Federal government. Assuming the interest rate on the funds are 4.4% (equal to the rate on the
refunded bonds), our interest earning on $8,702,013 will be $31,470 every 30 days.
The amount of the new bond issue is projected at $18,355,000 as reflected in the schedule previously
given to you.
FM:aeb
Gomm. No. / ~ • O O 6
File No. FN D ~~D
Presented Couuc~~
Ref. To:
Ref. Date hAY 5 1999