AGENDA
DIVISION OF BOND FINANCE OF THE
STATE BOARD OF ADMINISTRATION
(Contact
person: J. Ben Watkins III - 488-4782)
The
Capitol
September
14, 1999
This
meeting is open to the public.
-
Approval
of minutes of the meeting of August 24, 1999.
(Attachment
#1)
- ADOPTION
OF 1) THE NINETEENTH SUPPLEMENTAL AUTHORIZING RESOLUTION AUTHORIZING
THE ISSUANCE OF NOT EXCEEDING $367,200,000 STATE OF FLORIDA, FULL FAITH
AND CREDIT, STATE BOARD OF EDUCATION, PUBLIC EDUCATION CAPITAL OUTLAY
BONDS, 1999 SERIES, AND OF 2) A RESOLUTION AUTHORIZING THE COMPETITIVE
SALE AND DELIVERY OF NOT EXCEEDING $200,000,000 OF STATE OF FLORIDA,
FULL FAITH AND CREDIT, STATE BOARD OF EDUCATION, PUBLIC EDUCATION CAPITAL
OUTLAY BONDS, 1999 SERIES C (THE "1999 SERIES C BONDS").
The Nineteenth
Supplemental Authorizing Resolution supplements the Public Education
Capital Outlay Bond Master Resolution adopted by the Division of Bond
Finance on July 21, 1992, and contains the authorization for bonds
necessary to finance public education capital outlay projects authorized
during the 1999 legislative session. The bonds will be payable from
gross receipts taxes, and will be additionally secured by the full
faith and credit of the State. The proceeds of the bonds will be used
to finance capital outlay projects for school and community college
districts and the State University System.
The 1999
Series C Bonds will be the first series of bonds sold pursuant to
the Nineteenth Supplemental Authorizing Resolution.
Copies
of the resolutions may be obtained from the Division of Bond Finance
upon request.
(Recommend)
-
REPORT
OF AWARD OF $30,355,000 STATE OF FLORIDA, DEPARTMENT OF MANAGEMENT
SERVICES, FLORIDA FACILITIES POOL REVENUE BONDS, SERIES 1999B, TO
THE LOW BIDDER FOR SUCH BONDS.
The Division
of Bond Finance was authorized to receive bids for these bonds, and
award them to the low bidder, by a resolution adopted by the Governor
and Cabinet. Bids were received at the office of the Division at 11:00
a.m. on August 31, 1999, and the bonds were awarded to the low bidder,
Salomon Smith Barney Inc., which submitted a bid at an annual true
interest cost rate of 5.4833%. The bonds are scheduled to be delivered
on September 21, 1999.
A report
of award and tabulation of bids is attached.
(Attachment
#2)
- REPORT
ON THE NEGOTIATED SALE OF $306,910,000, STATE OF FLORIDA, FULL FAITH
AND CREDIT, STATE BOARD OF EDUCATION PUBLIC EDUCATION CAPITAL OUTLAY
REFUNDING BONDS, 1999 SERIES D
Pursuant
to a resolution of the Governor and Cabinet, on behalf of the State
Board of Education, the Division of Bond Finance negotiated the sale
of the above referenced bonds with a syndicate led by Salomon Smith
Barney Inc. on August 19, 1999. The bonds were priced to yield an
annual true interest cost rate of 5.925% and are scheduled for a delayed
delivery on March 15, 2000.
The refunding
will result in gross debt service savings of $61,575,338, average
annual debt service savings of approximately $2,610,000 per year,
and present value debt service savings of $33,734,324.
The report
of sale is attached.
(Attachment
#3)
The regular
meeting of the Division of Bond Finance of the State Board of Administration
was held on August 24, 1999, in the Cabinet meeting room of the Capitol
in Tallahassee. Members present were:
- Governor
Jeb Bush
- Attorney
General Bob Butterworth
- Comptroller
Robert F. Milligan
- Treasurer/Insurance
Commissioner Bill Nelson
- Agriculture
Commissioner Bob Crawford
- Education
Commissioner Tom Gallagher
The following
were considered by the Cabinet:
Item 1.
The minutes of the meeting of June 22, 1999 were approved without objection.
Item 2.
Mr. Watkins requested the adoption of a resolution authorizing the issuance
of not exceeding $60,340,000 State of Florida, Board of Regents, University
of Central Florida Housing Revenue Bonds, (various series).
Moved and
seconded. Adopted without objection.
J.
Ben Watkins III
Director
Division of Bond Finance
(Attachment
#1)
J. Ben Watkins
III
Director
STATE OF
FLORIDA
Division of Bond Finance
of the state board of administration
Hermitage
Centre, Suite 200
1801 Hermitage Boulevard
Tallahassee, Florida 32308
Post Office Box 13300
Tallahassee, Florida 32317-3300
(Address
mail to P.O. Box; deliveries to street address)
telephone:
(850) 488-4782
telecopier: (850) 413-1315
Jeb Bush
Governor
as Chairman
Katherine
Harris
Secretary of State
Bob Butterworth
Attorney General
Robert F.
Milligan
Comptroller
as Secretary
Bill Nelson
State Treasurer
as Treasurer
Bob Crawford
Commissioner of Agriculture
Tom Gallagher
Commissioner of Education
MEMORANDUM
TO: |
Governor
and Cabinet, as the Governing Board of the Division of Bond Finance
|
FROM: |
J.
Ben Watkins III |
DATE: |
September
14, 1999
|
SUBJECT:
|
Award
of $30,355,000 State of Florida, Department of Management Services,
Florida Facilities Pool Revenue Bonds, Series 1999B |
Pursuant
to authorization by the Governor and Cabinet by a resolution adopted on
June 22, 1999, bids were received for the above referenced bonds at the
office of the Division of Bond Finance at 11:00 a.m. on Tuesday, August
31, 1999.
Five bids
were received and a tabulation of such bids is included herein. The low
bid was from Salomon Smith Barney Inc., at an annual true interest cost
rate of 5.4833%. The Bond Buyer 25 Revenue Bond Index for the week of
sale was 5.89%. The bids were reviewed by representatives of the Division
of Bond Finance and the bonds were awarded to the low bidder as authorized.
The bonds are scheduled to be delivered on September 21, 1999.
The bonds
are being issued for the purpose of financing a portion of the cost associated
with the construction of facilities located at the Capital Circle Office
Center in Leon County, Miami-Dade County and Alachua County, as approved
by the legislature, and to pay certain costs of issuance. The buildings
are to be primarily occupied by the Department of Management Services,
Department of Law Enforcement, Department of Juvenile Justice, Department
of Revenue and the Agency for Health Care Administration.
The bonds
are dated August 1, 1999, with interest payable on March 1, 2000, and
semi-annually on each September 1 and March 1 thereafter. The bonds consist
of serial bonds maturing on September 1 in the years 2001 through 2019
and two term bonds maturing on September 1 in the years 2022 and 2028.
The bonds
are secured by and are payable on a parity with the outstanding Florida
Facilities Pool Revenue Bonds from the pledged revenues. The pledged revenues
consist primarily of rents paid by State agencies from monies appropriated
by the legislature for rent of facilities in the Florida Facilities Pool.
The availability of the pledged revenues will be dependent on annual legislative
appropriations for payment of rentals. The bonds are not secured by the
full faith and credit of the State.
(Attachment
#2 for item #3)
The bonds
have been rated "AAA" by Moody's Investors Service, "AAA" by Standard
& Poor's Ratings Services and "AAA" by Fitch IBCA, Inc., based upon
the purchase of a municipal bond insurance policy by the underwriters
from Financial Security Assurance, Inc., insuring the payment when due
of the principal of and interest on the bonds. Without such insurance,
the bonds would have been rated "A1" by Moody's Investors Service, "AA-"
by Standard & Poor's Ratings Services, and "A+" by Fitch IBCA, Inc.
BID TABULATION
Bidder
|
Annual True Interest
Cost Rate
|
Salomon Smith Barney Inc.
|
5.4833%
|
Merrill Lynch & Co. Inc.
|
5.4933%
|
William R. Hough & Co.
|
5.4977%
|
Morgan Stanley & Co.,Incorporated
|
5.5100%
|
Raymond James and Associates, Inc.
|
5.5733%
|
INTEREST
RATES AND YIELDS FROM WINNING BID
Maturity
Date
|
Principal
Amount
|
Coupon
|
Yield
|
9/1/01
|
$540,000
|
4.00%
|
4.00%
|
9/1/02
|
560,000
|
4.00
|
4.05
|
9/1/03
|
580,000
|
4.10
|
4.125
|
9/1/04
|
605,000
|
4.20
|
4.22
|
9/1/05
|
630,000
|
4.30
|
4.32
|
9/1/06
|
660,000
|
4.40
|
4.43
|
9/1/07
|
690,000
|
4.50
|
4.55
|
9/1/08
|
720,000
|
4.60
|
4.67
|
9/1/09
|
750,000
|
4.70
|
4.80
|
9/1/10
|
785,000
|
4.875
|
4.95
|
9/1/11
|
825,000
|
5.00
|
5.05
|
9/1/12
|
865,000
|
5.10
|
5.15
|
9/1/13
|
910,000
|
5.125
|
5.22
|
9/1/14
|
960,000
|
5.20
|
5.28
|
9/1/15
|
1,005,000
|
5.25
|
5.33
|
9/1/16
|
1,060,000
|
5.25
|
5.38
|
9/1/17
|
1,115,000
|
5.25
|
5.42
|
9/1/18
|
1,175,000
|
5.375
|
5.44
|
9/1/19
|
1,240,000
|
5.40
|
5.46
|
$ 4,130,000
5.50% Term Bond maturing on September 1, 2022 (at a yield of 5.50%)
$10,550,000
5.50% Term Bond maturing on September 1, 2028 (at a yield of 5.60%)
J. Ben Watkins
III
Director
STATE OF
FLORIDA
Division of Bond Finance
of the state board of administration
Hermitage
Centre, Suite 200
1801 Hermitage Boulevard
Tallahassee, Florida 32308
Post Office Box 13300
Tallahassee, Florida 32317-3300
(Address
mail to P.O. Box; deliveries to street address)
telephone:
(850) 488-4782
telecopier: (850) 413-1315
Jeb Bush
Governor
as Chairman
Katherine
Harris
Secretary of State
Bob Butterworth
Attorney General
Robert F.
Milligan
Comptroller
as Secretary
Bill Nelson
State Treasurer
as Treasurer
Bob Crawford
Commissioner of Agriculture
Tom Gallagher
Commissioner of Education
MEMORANDUM
TO: |
Governor
and Cabinet, as the Governing Board of the Division of Bond Finance
|
FROM: |
J.
Ben Watkins III |
DATE: |
September
14, 1999
|
SUBJECT:
|
Sale
of $306,910,000 State of Florida, Full Faith and Credit, State Board
of Education Public Education Capital Outlay Refunding Bonds, 1999
Series D |
Pursuant to
a resolution of the Governor and Cabinet adopted on June 22, 1999, the Division
of Bond Finance was authorized to negotiate the sale of the above referenced
bond issue on behalf of the State Board of Education to a syndicate led
by Salomon Smith Barney Inc. The Division negotiated the sale of the bonds
on August 19, 1999. The bonds are scheduled for a delayed delivery on March
15, 2000.
The proceeds
derived from the sale of the bonds will be used to refund a portion of
the outstanding Series 1989-A Bonds. The bonds were priced to yield an
annual true interest cost rate of 5.925%. The refunding will result in
gross debt service savings of $61,575,338, average annual debt service
savings of approximately $2,610,000 per year, and present value debt service
savings of $33,734,324.
The bonds
are dated March 15, 2000, with interest payable June 1, 2000, and semi-annually
on each December 1 and June 1 thereafter. The bonds consist of serial
bonds maturing annually on June 1 in the years 2001 through 2019 and 2023,
and one term bond maturing June 1, 2022.
Debt service
payments for the bonds are secured by the gross receipts taxes collected
within the State, and are additionally secured by a pledge of the full
faith and credit of the State. The lien of the 1999 Series D Bonds on
the gross receipts taxes will be junior and subordinate to the lien of
the outstanding Public Education Capital Outlay Bonds, Series 1985 through
Series 1992-A, and will be on a parity with the outstanding Public Education
Capital Outlay Bonds, 1992 Series B through 1999 Series B and any additional
parity bonds which may be issued prior to delivery on March 15, 2000.
(Attachment
#3 for item #4)
The bonds
have been rated "Aa2" by Moody's Investors Service, "AA+" by Standard
& Poor's Ratings Service and "AA" by Fitch IBCA, Inc.
Pursuant
to Rule 19A-3.003(5), the Division of Bond Finance is required to report,
on a negotiated sale of bonds, the price and allocation of the bonds,
the gross underwriting spread and the fees paid by the Division of Bond
Finance, in addition to the award of the bonds.
Details of
the pricing:
Maturity
Date
|
Principal
Amount
|
Coupon
|
Yield
|
6/1/2001
|
$595,000
|
5.00%
|
4.50%
|
6/1/2002
|
625,000
|
5.00
|
4.60
|
6/1/2003
|
655,000
|
5.00
|
4.70
|
6/1/2004
|
690,000
|
5.00
|
4.85
|
6/1/2005
|
725,000
|
5.50
|
5.00
|
6/1/2006
|
765,000
|
5.50
|
5.10
|
6/1/2007
|
805,000
|
5.50
|
5.20
|
6/1/2008
|
850,000
|
5.50
|
5.30
|
6/1/2009
|
895,000
|
5.50
|
5.40
|
6/1/2010
|
945,000
|
5.50
|
5.50
|
6/1/2011
|
995,000
|
5.50
|
5.57
|
6/1/2012
|
1,050,000
|
5.50
|
5.64
|
6/1/2013
|
1,110,000
|
5.50
|
5.73
|
6/1/2014
|
1,170,000
|
5.50
|
5.74
|
6/1/2015
|
1,235,000
|
5.625
|
5.80
|
6/1/2016
|
1,305,000
|
5.625
|
5.85
|
6/1/2017
|
1,380,000
|
5.75
|
5.88
|
6/1/2018
|
1,460,000
|
5.75
|
5.91
|
6/1/2019
|
35,540,000
|
5.75
|
5.93
|
6/1/2023
|
53,320,000
|
6.00
|
5.80
|
$200,795,000
5.75% term bonds maturing 7/1/2022 (at a yield of 5.97%)
Total Par Amount
|
$306,910,000.00
|
Less: Net Original Issue Discount
|
(4,888,527.25)
|
Less: Gross Underwriters' Spread
|
(1,032,803.00)
|
Purchase Price
|
$300,988,669.75
|
The Gross
Underwriting Spread:
|
Per
Bond
|
Dollar
Amount
|
Management
Fee
|
$0.00
|
$0.00
|
Average
Takedown
|
3.20
|
982,112.00
|
Underwriters'
Risk
|
0.00
|
0.00
|
Underwriters'
Expenses
|
0.17
|
50,691.00
|
Total
Gross Underwriting Spread
|
$3.37
|
$
1,032,803.00
|
Allocation
of Underwriters' Compensation:
Pursuant
to an agreement between the Division of Bond Finance and Salomon Smith
Barney, Inc., the 1999 Series D Bonds were allocated such that each
firm received the following percentages of the sales commission (known
as the "takedown") of the issue:
Managers
|
Percentage of
Total Allotments
|
Total
Compensation
|
Salomon Smith Barney Inc.
|
50.43%
|
$495,248.00
|
Lehman Brothers Inc.
|
12.00%
|
$117,857.28
|
Goldman, Sachs & Co.
|
11.75%
|
$115,438.72
|
Raymond James & Associates, Inc.
|
10.34%
|
$101,540.48
|
Morgan Stanley Dean Witter
|
7.94%
|
$77,953.12
|
William R. Hough & Co.
|
5.11%
|
$50,221.60
|
Ramirez & Co., Inc
|
2.43%
|
$23,852.80
|
Total
|
100.00%
|
$982,112.00
|
Fees
of Professionals to be Paid by the Division of Bond Finance:
Squire, Sanders & Dempsey, L.L.P. (Bond Counsel)
|
$50,000
|
Public Resources Advisory Group (Financial Advisor)
|
$5,000
|
Ernst & Young, L.L.P. (Verification Agent)
|
$7,000
|
A letter was
provided by Public Resources Advisory Group, financial advisor to the
Division for this issue, stating it is their opinion that the yields of
the bonds, the gross underwriting spread and the timing of the sale were
fair and reasonable to the State of Florida.
|