New Mexico Administrative Code
Title 2 - PUBLIC FINANCE
Chapter 61 - STATE INDEBTEDNESS AND SECURITIES
Part 8 - APPROVAL OF REFUNDING BONDS
Section 2.61.8.8 - FINANCING PLAN FOR REFUNDING BONDS
Universal Citation: 2 NM Admin Code 2.61.8.8
Current through Register Vol. 35, No. 18, September 24, 2024
A. In order to obtain approval of the issuance of refunding bonds, the issuing authority must prepare a financing plan prior to the sale of the refunding bonds that addresses the following:
(1)
Refunding details:
(a) Estimated gross and
net present value savings annually, if any, by each series of refunded bonds.
If the refunding bonds are being issued together with new money bonds, the net
present value savings calculation on the refunding bonds should exclude any
interest payments or proceeds associated with the new money bonds.
(b) Interest rate and debt service
comparisons between refunding bonds and their respective refunded
bonds.
(c) Description of sources
and uses of funds.
(d) If request
is for approval of advance refunding bonds, redemption dates and call premiums
on refunded bonds with an analysis of the potential costs and benefits of delay
of issuing the refunding bonds, description of any special arbitrage issues,
and type of proposed investments to be used for escrow accounts.
(2) Debt management:
(a) Current outstanding debt and relation of
the proposed refunding bonds to financial, parity bond and rate limits, if
any.
(b) Five-year history of
pledged revenues used for proposed debt service based on fiscal year audited
financial statements.
(c) Current
and five-year projected coverage ratios, based on current revenues, on annual
debt service requirements by:
(i) Pledged
revenue.
(ii) Total revenue legally
available for debt service.
(iii)
Maximum fiscal year debt service as a percentage of prior fiscal year audited
pledged revenue, if available.
(d) For general obligation refunding bonds,
current ad valorem mill levy imposed, maximum mill levy allowable by law, and
the anticipated impact the refunding bonds will have on the mill levy.
(3) Debt structure and
terms:
(a) Maturity structure of proposed
refunding bonds.
(b) Estimated
interest rates on proposed refunding bonds including true-interest-cost,
all-inclusive interest cost, and average coupon.
(c) Estimated life of the refunding bonds.
(d) Table showing, on a fiscal
year basis, total future debt payments by:
(i) New refunding issue.
(ii) Outstanding issues less refunded bonds.
(iii) Total debt payments (new
refunding issue and outstanding issues less refunded
bonds).
(e) Estimated
terms and conditions of refunding bonds including covenant and call provisions,
if applicable.
(f) Maximum
principal amount and the maximum interest rate allowed for refunding bond
sale.
(4) Sales
management:
(a) Representation and
compensation of financial advisor, if any, and method of selection.
(b) Method of sale, including justification
for a negotiated sale, if any, and, if negotiated, method of selection of
underwriter.
(c) Representation and
compensation of bond counsel, special tax counsel, if any, and disclosure
counsel, if any, and indication of method of selection.
(d) Breakout of costs of issuance. For
negotiated sales, cost of issuance breakout should include underwriters'
discount as broken out by management fee, structuring fee, take down and
estimated expenses.
(e)Anticipated
timing of sale.
(5)
Legal documents:
(a)All resolutions and
ordinances previously adopted by the issuing authority relating to the
refunding bonds.
(b) Drafts of all
resolutions and ordinances to be adopted by the issuing authority relating to
the refunding bonds.
(c) Copies (or
drafts if not in final form) of all financing documents.
(6) Additional information:
(a) A certification of the issuing authority
certifying that the issuing authority has complied with all statutory
requirements for the issuance of refunding bonds.
(b) Any other information that the
department, in its discretion, needs and requests in order to fulfill its duty
to review and approve the refunding bonds.
B. The department shall make its determination to approve or disapprove of refunding bonds based on its assessment of the financing plan, including, in part, whether the refunding bonds will achieve net present value savings of at least three percent of the par amount of refunded bonds. The department may approve refunding bonds that generate less than three percent savings or disapprove refunding bonds that generate more than three percent savings in its sole discretion, depending upon other factors related to the refunding bonds.
C. The department, in its sole discretion, may waive specific provisions of this rule when circumstances warrant.
Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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