Okaloosa County BOCC — February 17, 2015 — (2015 02 17) Okaloosa County FL - Water and Sewer Refunding Presentation — reading text

Contacts Mark P. Galvin Senior Vice President Mark.Galvin@firstsw.com 450 S. Orange Avenue, Suite 460 Orlando, Florida 32801 407.426.9611 www.firstsw.com Preliminary Financing Plan for the Water and Sewer Bonds, Series 2006 February 17, 2015 Okaloosa County, Florida Introduction • Interest rates have changed significantly over the last month or so and continue to be very volatile due to economic conditions including: o Drop in oil prices o International turmoil o Deteriorating economic conditions internationally 5-Years Prior Historical Long Term Interest Rates MMD 'AAA' GO Yield Curves 1-Year Prior Weekly Data Points 6-Months Prior 8% 6.0% Current 5.5% 7% 5.0% 6% 4.5% 4.0% 5% 3.5% 4% 3.0% 2.5% 3% 2.0% 2% 1.5% 1.0% 1% O K A L O O S A 0.5% 0% 0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Source: Thomson Reuters and the Bond Buyer 2/5/2015 Maturity Source: Thomson Reuters 2/5/2015 • Over the past few weeks, yields on the muni 10 yr. and 20 yr. have risen by 15 to 30 basis points. C O U N T Y , • The low interest rate market is providing Municipal Issuers an opportunity to refinance their existing debt and the ability to fund new capital projects at very attractive interest rates. • FirstSouthwest has reviewed the County’s outstanding debt and has identified the County’s existing Water and Sewer F L O R I D A Revenue Bonds, Series 2006 bonds as an attractive refunding candidate. • There are additional benefits if we include the Series 2004 Bonds and Series 2012 Note into the refinancing. Member FINRA/SIPC/NYSE 1 © 2015 First Southwest Company, LLC. All Rights Reserved Debt Profile – Water & Sewer System Senior Lien Debt (As of Jan 1, 2015) Water and Sewer Revenue Note, Water and Sewer Revenue Water and Sewer Revenue Series 2012 Bonds, Series 2006 Bonds, Series 2004 Original Amount $15,605,000 $65,150,000 $31,170,000 Par Outstanding $15,315,000 $60,875,000 $4,995,000 Interest Rates 3.17% 4.00%-5.00% 3.375%-3.50% Final Maturity 7/1/2026 7/1/2036 7/1/2016 Max Annual Debt Service $1,738,570 $6,687,512 Callable Currently Callable @ 101% 7/1/2016 @ 100% Currently Callable @ 100% O K A L O O S A Debt Service Reserve Cash ($1,560,500) Surety & Cash (Current Amount: $5,222,231) New Money & Refunding (1992 New Money & Refunding (1993 & Purpose New Money Bonds) 1998 Bonds) C O U N T Y , Net Revenues of Water and Sewer Net Revenues of Water and Sewer Net Revenues of Water and Sewer Security System System System F L O R I D A Credit Bank Loan Assured Guaranty (Formerly FSA) Assured Guaranty (Formerly FSA) Underlying Rating None Aa3 / A+ / AA- Aa3 / A+ / AA- Member FINRA/SIPC/NYSE © 2015 First Southwest Company, LLC. All Rights Reserved Debt Profile –Water and Sewer System Senior Lien Debt (As of Jan 1, 2015) Okaloosa County, Florida All Outstanding Water and Sewer System Debt by Series As of January 1, 2015 $8,000,000 $7,000,000 $6,000,000 Debt Service $5,000,000 $4,000,000 $3,000,000 O K A L O O S A $2,000,000 $1,000,000 C O U N T Y , $0 F L O R I D A Fiscal Year Ending Series 2006 Series 2012 Series 2004 Member FINRA/SIPC/NYSE © 2015 First Southwest Company, LLC. All Rights Reserved Historical Credit Spreads (20-Year MMD GO Yields versus “AAA” Rated GO Yields) O K A L O O S A C O U N T Y , F L O R I D A Member FINRA/SIPC/NYSE © 2015 First Southwest Company, LLC. All Rights Reserved Financing Plan Goals and Objectives: • While refunding the Series 2006 Bonds provides significant debt service savings, including the Series 2004 and 2012 into the refunding, the County can issue the 2015 Bonds under a new bond resolution which allows for the following: o Release of over $7.4 million in existing debt service reserve (DSR) funds by eliminating the requirement to fund a new debt service reserve, due to the County’s strong credit ratings (Aa3/A+/AA- from Moody’s, S&P and Fitch). o Eliminate the requirement to deposit the final $652,000 payment into the existing debt service reserve account on October 15, 2015. O K A L O O S A o Eliminate restrictions associated with leasing the Water and Sewer