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APPENDIX B - Page 1 of 3 APPENDIX B Anaheim Housing and Public Improvements Authority (AHPIA) 2014 Lease Revenue Bonds Preliminary Bond Structure Current Estimated Bond Structure All of the 2014 Lease Revenue Bonds are anticipated to be sold as Current Interest Bonds. No Capital Appreciation Bonds (CABs) will be sold. Current Interest Bonds pay interest every 6 months until their maturity date. The Current Interest Bonds are expected to be a combination of Serial Bonds amortizing from 2015 to 2034, a Term Bond maturing 2039 and a Term Bond maturing 2046 (see table below). Serial Bonds are bonds sold with a single stated maturity. For example, a 2020 Serial Bond requires all principal to be paid on a specified date in 2020. Term Bonds are bonds subject to mandatory redemption prior to maturity from sinking fund payments. The City is not paying a “balloon” payment for Term Bonds because a mandatory sinking fund is required and used redeem a portion of the Term Bond prior to maturity. The mandatory sinking fund has the effect of making the Term Bond payment level over a period of years. Term Bonds are sold to address lack of investor demand for long-term Serial Bonds in the municipal marketplace. Note: Staff is seeking approval of a not to exceed $300 million par amount, but preliminary estimates indicate today that only $243.5 million of bonds will need to be issued to generate the required $273.8 million of proceeds necessary to accomplish the plan of finance. The added $56.5 million of approval is designed to address possible market changes between approval and sale of the bonds. As an example of the possible changes that could occur: The City is expecting to sell premium bonds which are currently the desired bond structure by investors. These bonds generate additional proceeds above the par amount issued. Should investors desire changes between approval and bond sale the City may need to issue an additional bonds to cover this market shift. Series 2014A (Tax-exempt, non-AMT) Maturity Amort Coupon Yield Maturity Amort Coupon Yield Serial Bonds 2039 Term 5/1/2015 $515,000 2.000% 0.810% 5/1/2035 $8,305,000 5.000% 4.510% 5/1/2016 6,210,000 5.000% 1.040% 5/1/2036 8,720,000 5.000% 4.510% 5/1/2017 10,100,000 5.000% 1.380% 5/1/2037 9,155,000 5.000% 4.510% 5/1/2018 890,000 5.000% 1.760% 5/1/2038 9,610,000 5.000% 4.510% 5/1/2019 970,000 5.000% 2.130% 5/1/2039 10,090,000 5.000% 4.510% 5/1/2020 3,995,000 5.000% 2.450% Total $45,880,000 5/1/2021 4,195,000 5.000% 2.750% 5/1/2022 4,405,000 5.000% 3.030% 2046 Term 5/1/2023 4,625,000 5.000% 3.260% 5/1/2040 $10,595,000 5.000% 4.550% 5/1/2024 4,855,000 5.000% 3.440% 5/1/2041 11,125,000 5.000% 4.550% 5/1/2025 5,095,000 5.000% 3.610% 5/1/2042 11,685,000 5.000% 4.550% 5/1/2026 5,350,000 5.000% 3.730% 5/1/2043 12,265,000 5.000% 4.550% 5/1/2027 5,620,000 5.000% 3.850% 5/1/2044 12,880,000 5.000% 4.550% 5/1/2028 5,900,000 5.000% 3.920% 5/1/2045 13,525,000 5.000% 4.550% 5/1/2029 6,195,000 5.000% 4.000% 5/1/2046 14,200,000 5.000% 4.550% 5/1/2030 6,505,000 5.000% 4.070% Total $86,275,000 5/1/2031 6,830,000 5.000% 4.140% 5/1/2032 7,170,000 5.000% 4.200% Series 2014B (Taxable) 5/1/2033 7,530,000 5.000% 4.260% 5/1/2034 7,905,000 5.000% 4.310% Maturity Amort Coupon Yield Total $104,860,000 Serial Bonds 5/1/2015 $675,000 1.000% 1.000% 5/1/2016 5,765,000 1.350% 1.350% Total $6,440,000 ---PAGE BREAK--- APPENDIX B - Page 2 of 3 Current Estimated Sources and Uses of Funds The table below details the current projected sources and uses of funds from the 2014 Lease Revenue Bonds. $8.4 million in funds will be spent refinancing the outstanding 1993 Refunding Certificates of Participation (COPs), $35.5 million will be spent refinancing the outstanding 1992 Refunding COPs, $0.5 million will be spent refinancing the outstanding 2002A Refunding Bonds, and $5.2 million will be spent retiring the outstanding 2010 Notes. Total monies spent refinancing outstanding debt for savings will be $49.6 million. New capital of $224.2 million will be raised by selling $212.6 million in bonds. Sources 1993 Refunding COPs (Taxable) 1992 Refunding COPs 2002A Refunding Bonds 2010 Notes 2014 New Money Bonds Total Par Amount 6,440,000 $ 23,945,000 $ 515,000 $ - $ 212,555,000 $ 243,455,000 $ Premium - 2,253,917 3,203 - 11,644,313 13,901,434 Bond Fund Release 62,143 2,808,616 - - - 2,870,759 Debt Service Reserve Fund Release 1,874,400 6,489,496 - - - 8,363,896 Anaheim Cash Contribution - - - 5,194,859 - 5,194,859 Total 8,376,543 $ 35,497,029 $ 518,203 $ 5,194,859 $ 224,199,313 $ 273,785,947 $ Uses 1993 Refunding COPs (Taxable) 1992 Refunding COPs 2002A Refunding Bonds 2010 Notes 2014 New Money Bonds Total Project Fund - $ - $ - $ - $ 190,000,000 $ 190,000,000 $ Escrow Accounts 8,152,585 34,660,657 497,151 5,194,859 48,505,251 Debt Service Reserve Fund (1/2 MADs) 197,240 733,371 15,773 - 6,509,991 7,456,375 Capitalized Interest Account - - - - 26,835,069 26,835,069 Cost of Issuance 25,049 97,982 2,010 - 851,786 976,827 Additional Proceeds 1,669 5,019 3,269 - 2,467 12,425 Total 8,376,543 $ 35,497,029 $ 518,203 $ 5,194,859 $ 224,199,313 $ 273,785,948 $ Project Fund is effectively the construction fund account and funds in this account will be used to pay for the costs of the Anaheim Convention Center Expansion. Escrow Accounts are funded to redeem the outstanding debt at their first optional call date. These monies can only be used for that purpose once funded. Debt Service Reserve Fund (DSRF) is funded and held to maturity of the bonds as added security for bondholders. It can only be used to cover payment shortfalls if they occur or spent on the final maturity of the debt. The DSRF is a common security feature in the municipal bond market and helps the bonds achieve high credit ratings. The above table measures the DSRF to be one-half of the maximum annual debt service of the bonds. Amounts in DSRF may change (and increase up to the maximum annual debt service of the bonds) due to rating agency requirements or market conditions. Capitalized Interest Account (CAPI) is funded to cover the interest cost on the bonds being issued to fund the convention center expansion. This is a common approach for new projects to mitigate the carry cost of the interest while the expansion is in construction and unavailable for use and added revenue generation. Cost of Issuance covers the various consultants or outside services required to sell the bonds: lawyers, rating agencies, investment bankers, financial advisor, printer, escrow agent, and bond trustee. ---PAGE BREAK--- APPENDIX B - Page 3 of 3 Additional Proceeds are bond proceeds that exist because the par amount of each bond must be a multiple of $5,000. These proceeds will be used for project costs or costs of issuance.