Recent Transactions

Eastern York School District
Forward Starting Interest Rate Swap

The Eastern York School District (the "District") had plans to construct a new high school, but was not able to complete construction within the required three-year spending period. In order to take advantage of the current low interest rates, eliminate the negative reinvestment rate before spending the funds and to be in compliance with tax law, the District bid out entering into a forward starting interest rate agreement. Under this arrangement, the District will pay a low fixed rate of 3.92% and receive a variable rate from the interest rate swap counterparty which will equate to the variable rate the District will pay on its future variable rate bond issue. The interest rate swap agreement will become effective approximately eighteen months after the agreement was signed. By completing this interest rate swap transaction, the District was able to achieve all its financial goals in a very low interest rate market.

South Whitehall Township Authority
Forward Bank Loan

With the fear of rising interest rates, the South Whitehall Township Authority (the “Authority”) took advantage of the current low interest rate market to refund the Authority’s outstanding Guaranteed Water Revenue Bonds, Series of 2001 (the “Bonds”) by locking in a 3.30% rate for approximately 10 years in June. The Bonds are callable on January 15, 2006 , however, the Authority is allowed to “advance” refund a series of bonds only one time. An “advance” refunding is a refunding that sets funds aside in an escrow for over 90 days. The Authority already took advantage of that type of refunding, so the Authority would have had to wait until September to lock in an interest rate using a conventional current period refunding. Concord has had discussions with local and regional banks that revealed there is some interest in providing rates now, holding them for over three months and settling on this issue in the normal time frame. Concord provided a request for proposal to several banks and asked to hold the proposals to hold the rate until October. The Authority received 10 proposals from banks. By locking in the rate in June, the Authority hedged against the rising interest rate market and the Authority saved an additional $80,000.

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