Title
An Ordinance authorizing the termination by the City of existing Interest Rate Exchange Agreements; delegating to the Utilities Chief Executive Officer and the Utilities Chief Planning and Finance Officer the authority to determine the financial terms of transactions terminating such agreements; ratifying action heretofore taken and relating to such agreements; and providing other matters relating thereto.
Presenter:
Bob Lesher, Manager, Treasury and Finance
Eric Tharp, Acting CEO, Colorado Springs Utilities
Body
Summary:
The Ordinance delegates to the Utilities Chief Executive Officer and the Chief Planning and Finance Officer the authority to determine the precise timing and circumstances under which one or more of the City's existing Interest Rate Exchange Agreements ("Agreements") can be terminated during calendar year 2018.
Previous Council Action:
N/A
Background:
The City has entered into individual Interest Rate Exchange Agreements associated with the majority of its outstanding variable interest rate bonds. Under these Agreements the City and a counterparty exchange payment, thereby creating a synthetically fixed interest rate for the City's variable interest rate bonds. The City wants to strategically exit one or more of these Agreements when the financial markets provide an opportunity. The financial markets can change rapidly, and the capability to quickly terminate Agreements can have a large financial impact. Delegating authority to the Utilities Chief Executive Officer and the Chief Planning and Finance Officer will enable the City to take advantage of market opportunities and selectively terminate Agreements during calendar year 2018.
Financial Implications:
The timing of the termination can have a major impact on the financial benefit or cost of these Agreements. Generally, the closer the termination decision is to the actual termination date is advantageous to the City. Dependent upon financial market conditi...
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