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"Dual
Track" Financing Strategy
Springettsbury
Township
Refinancing the
Townships General Obligation Note, Series of 1997
On October 2001, Concord assisted the Springettsbury Township (the
"Township") in refinancing the Township's, General Obligation
Note, Series of 1997 (the "1997 Note"). Concord conducted
a "dual-track" financing strategy for the Township. Under
this strategy, Concord solicited loan proposals from 11 local and regional
banks for a seven year term and held the proposals open for a period of
time after the proposal due date. The School District received five
fixed rate bids and five variable rate bids from five different banks.
The bank loan proposals were compared to the rates available in the bond
market. It was determined the most cost-effective method of refinancing
the 1997 Note was through a variable rate bank loan. By issuing a note to a bank rather
than issuing bonds, the Township reaped an additional $100,000 in net
present value savings compared to a conventional bond issue.
Union
School District
Refinancing the
School Districts General Obligation Refunding Bonds, Series of 1992
On May 2002, Concord conducted a "dual-track" financing strategy for the
Union School District, Pennsylvania (the "School District") to
refinance the School District's, General Obligation Refunding Bonds,
Series of 1992 (the "1992 Bonds") totaling $4.45 Million. Under this strategy, Concord
solicited both fixed and variable rate bank loan proposals for a eleven year term
and held the proposals open for a
period of time after the proposal due date. The School District received six
bank loan proposal from three different banks. The bank loan proposals were compared to what
was available in the bond market and determined the most cost-effective method of
refinancing the 1992 Bonds was through a bond issue. The bank loan proposals remained valid
for some time after the proposal due date so that the School could build in a hedge
against changing market conditions and always have a valid proposal to act upon that could
produce the lowest overall costs. In all, the School District saved an
additional $35,000 net present value savings using a bond issue.
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