05-02-2014 BPU RPT 11 - Laserfiche WebLink

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The existing letter of credit with Bank of America, N,A. associated with the 2008A electric revenue bonds currently expires on June 30, 2014. Riverside Public Utilities (RPU) seeks authority to replace the current Letter of Credit (L C) from Bank of America with a Reimbursement Agreement, Custody Agreement and a Fee Letter offered by Barclays Bank, PLC (Barclays) for a three-year period at a reduced cost. RECOMMENDATIONS: That the Board of Public Utilities recornmend that the City Council: Approve a Reimbursement Agreement, Custody Agreement and a Fee Letter with Barclays Bank, PLC to replace the existing Letter of Credit for the 2008A electric revenue bonds; 2, Approve the remarketing of the 2008E electric revenue bonds and the use of the Remarketing Memorandum,, and 3, Authorize the City Manager or his designee to execute all documents relat ted to this action. The RPU has approximately $154 million of outstanding electric system variable rate debt obligations in three separate series of revenue bonds. The 2008A and 20080 electric revenue bonds are variable rate demand obligations (VRDOs) which require a L as pad of its financing structure. The 2011A electric revenue bonds are direct placement bonds. The LOCs and the direct placement bonds all had expiration dates or mandatory tender dates in April 2014. FISCAL IMPACT. In order to complete the transaction, the execution and delivery of a Reimbursement Agreement, Custody Agreement and a Fee Letter with Barclays must be approved for a three-year period, reducing the fee for the LOC for the 2008A electric revenue bonds to 0.275% from 0.45%. The RPU is expected to realize estimated present value savings of approximately $280,000 over the new three years as a