East Pennsboro Area School District New Money Discussion January 2, 2020 Prepared by: Brad Remig Managing Director & Garrett Moore Senior Analyst PFM Financial Advisors LLC 213 Market Street Harrisburg, PA 17101 717.232.2723 (P) 717.232.8610 (F) www.pfm.com
MUNICIPAL MARKET UPDATE December 20, 2019 HISTORICAL MMD CURVE ILLUSTRATION - SINCE JANUARY 1, 1998 7.00 6.00 5.00 Yield (%) 4.00 3.00 2.00 1.00 Range Average Current 0.00 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year Maturity Year SPOT ANALYSIS - 10 YEAR MMD - SINCE JANUARY 1, 1998 5.10 Since 1/1/1998 Amount Date Min 1.210 8/28/2019 4.60 Max 5.370 5/18/2000 4.10 Average 3.168 n/a Current 1.450 12/20/2019 3.60 Yield (%) 3.10 2.60 2.10 1.60 1.10 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SPOT ANALYSIS - 10 YEAR MMD - SINCE JANUARY 1, 2018 2.900 Since 1/1/2018 Amount Date 2.700 Min 1.210 8/28/2019 Max 2.770 11/2/2018 2.500 Average 2.088 n/a Current 1.450 12/20/2019 2.300 Yield (%) 2.100 1.900 1.700 1.500 1.300 1.100 PFM Financial Advisors LLC 1
EAST PENNSBORO AREA SCHOOL DISTRICT SUMMARY OF OUTSTANDING INDEBTEDNESS Debt Service Requirements 1 2 3 4 5 6 7 Bank Of America Integrity Bank First National Bank Fiscal G.O. Notes G.O. Note G.O. Note G.O. Bonds G.O. Bonds Total Year Series of Series of Series of Series of Series of Debt Ended 2011 2015 2017 [1][2] 2018 2019 Service 6/30/2020 235,303 413,225 268,378 664,131 309,429 1,890,466 6/30/2021 236,313 416,098 264,801 523,619 398,576 1,839,406 6/30/2022 237,136 661,224 523,931 398,488 1,820,778 6/30/2023 893,847 524,119 398,393 1,816,358 6/30/2024 893,443 524,056 398,293 1,815,791 6/30/2025 893,573 523,356 398,193 1,815,122 6/30/2026 893,214 522,131 398,093 1,813,437 6/30/2027 893,364 520,756 397,984 1,812,104 6/30/2028 918,156 516,456 1,434,613 6/30/2029 918,703 518,444 1,437,147 6/30/2030 917,985 524,100 1,442,085 6/30/2031 916,043 523,400 1,439,443 6/30/2032 917,670 522,500 1,440,170 6/30/2033 915,900 521,400 1,437,300 6/30/2034 915,900 520,100 1,436,000 6/30/2035 914,700 523,500 1,438,200 6/30/2036 917,200 521,600 1,438,800 6/30/2037 918,300 519,500 1,437,800 6/30/2038 918,000 522,100 1,440,100 6/30/2039 940,800 940,800 6/30/2040 940,300 940,300 6/30/2041 938,800 938,800 6/30/2042 936,300 936,300 6/30/2043 940,763 940,763 6/30/2044 937,013 937,013 6/30/2045 936,800 936,800 6/30/2046 939,900 939,900 6/30/2047 941,200 941,200 6/30/2048 940,700 940,700 6/30/2049 6/30/2050 Totals 708,751 829,323 5,661,841 14,414,657 18,223,122 39,837,693 Local Effort Requirements 8 9 10 11 12 13 14 Bank Of America Integrity Bank First National Bank Fiscal G.O. Notes G.O. Note G.O. Note G.O. Bonds G.O. Bonds Total Year Series of Series of Series of Series of Series of Local Ended 2011 2015 2017 [1][2] 2018 2019 Effort 6/30/2020 231,846 393,932 268,378 664,131 309,429 1,867,716 6/30/2021 232,841 396,671 264,801 523,619 398,576 1,816,507 6/30/2022 233,652 661,224 523,931 398,488 1,817,294 6/30/2023 893,847 524,119 398,393 1,816,358 6/30/2024 893,443 524,056 398,293 1,815,791 6/30/2025 893,573 523,356 398,193 1,815,122 6/30/2026 893,214 522,131 398,093 1,813,437 6/30/2027 893,364 520,756 397,984 1,812,104 6/30/2028 918,156 516,456 1,434,613 6/30/2029 918,703 518,444 1,437,147 6/30/2030 917,985 524,100 1,442,085 6/30/2031 916,043 523,400 1,439,443 6/30/2032 917,670 522,500 1,440,170 6/30/2033 915,900 521,400 1,437,300 6/30/2024 915,900 520,100 1,436,000 6/30/2025 914,700 523,500 1,438,200 6/30/2026 917,200 521,600 1,438,800 6/30/2027 918,300 519,500 1,437,800 6/30/2038 918,000 522,100 1,440,100 6/30/2039 940,800 940,800 6/30/2040 940,300 940,300 6/30/2041 938,800 938,800 6/30/2042 936,300 936,300 6/30/2043 940,763 940,763 6/30/2044 937,013 937,013 6/30/2045 936,800 936,800 6/30/2046 939,900 939,900 6/30/2047 941,200 941,200 6/30/2048 940,700 940,700 6/30/2049 6/30/2050 Totals 698,339 790,603 5,661,841 14,414,657 18,223,122 39,788,561 Principal*: 461,000 413,000 4,995,000 9,620,000 9,345,000 24,834,000 PE%: 2.88% 9.16% 0.00% 0.00% 0.00% PE% Status: Perm Perm Est Est Est CARF% : 50.97% 50.97% 50.97% 50.97% 50.97% Call Date: 8/15/2016 @ 101 Anytime Anytime 4/1/2024 10/1/2024 Purpose: Cur Ref 04A & Adv Cur Ref 09A New Money New Money New Money Ref 06 * Outstanding as of December 16, 2019 [1] Assumes $5 million drawn at settlement. Actual debt service will vary depending on draw until 12/31/18 facility expiration. [2] Capitalized interest likely to be used in 2018 budget - amount to be determined. PFM Financial Advisors LLC 2
East Pennsboro Area School District New Money Analysis January 2, 2020 I) Series of 2018 (Phase 1 Financing) Recap • Phase 1 addresses the air quality conditions with cost estimates of $14.7 million • The District still had approximately $2 million of remaining undrawn balance on its Series of 2017 Bank Loan with FNB • On November 13, 2018 the District issued its Series of 2018 Bonds with a par amount of $9,940,000 • The Bonds were sold with an S&P “A+” underlying credit rating which were then insured by MAC resulting in an insured rating of “AA” • The Bonds were sold with an arbitrage yield of 3.43% • Additional funding of approximately $2.5 – $3.0 million needed to fully fund Phase 1 projects. II) Series of 2019 (Phase 2 Financing) Recap • Phase 2 mainly addresses the Elementary and High School renovations, and the Reynolds Phase 1B projects currently estimated to be $16,226,307. • All projects are term limited by the useful life of the project. Projects procured under Act 39 (ESCO/GESA projects) are further limited to the shorter of the useful life of the project or 20 years • On May 14, 2019 the District issued its Series of 2019 Bonds with a par amount of $9,345,000 • The Bonds were sold with an S&P “A+” underlying credit rating which were then insured by MAC resulting in an insured rating of “AA” • The Bonds were sold with an arbitrage yield of 2.84% III) Next Steps (2020 Financing) • As part of the District’s financing plan, the District is contemplating issuing $15 or $20 million of additional debt in 2020 to fund a portion (or the remaining balance) of the District’s Phase 1B , Phase 2 , and possible Phase 3 Projects • The $15 million option would likely be able to be issued under the District's existing Parameters Resolution. I f the $20 million option is selected, a new parameters resolution could be required and will be evaluated upon Board's decision on option selected • 2021 Financing will likely need to be issued under a future parameters resolution if requested term is beyond 2047. IV) Timeline December 19, 2019 Introduction of 2020 Borrowing Early January Call with rating agency (S&P) Mid-January Receive Credit Rating / Due Diligence Call Late January Price Series of 2020 (lock-in rates) Early March Settlement PFM Financial Advisors LLC 3
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