On August 22, 2013, the Downtown Development Corporation (DDC) priced the ballpark bonds. The key points related to the sale were as follows:
1.) The pricing and sale, within the parameters granted by Council on August 1, 2013, with the lead underwriter, Goldman Sachs, and Raymond James and Wells Fargo as co-underwriters, was completed on August 22, 2013. The bond transaction subsequently closed on August 29, 2013.
2.) The tax-exempt series of $45.125 million was completed, primarily to four institutional investors who finally obtained credit approval for purchase of the DDC bonds and agreed to orders at stated pricing of the bonds. The arbitrage yield for the issue is 5.48%, below the 6.50% parameter; and the True Interest Cost (TIC) rate is 6.17%.
3.) Due to market condition concerns regarding the subject-to-appropriation debt and lack of investor interest, Goldman Sachs took the taxable series into its inventory. The sale of the $15.66 million taxable series was within the taxable parameter and underwritten by Goldman Sachs at a yield of 7.24%.
This pickup allowed the completion of the issuance and sale of the DDC bonds.
4.) The tax-exempt series was structured over a 25 year period; the taxable debt was structured over a 30-year period.
5.) The structure of the bonds contains graduated debt payments with a bullet in year 10 for the tax-exempt series but with an early call in 4 years which will allow the DDC to consider a refinance or pay down debt early if market conditions are favorable at that time. The structure also allows the DDC to reimburse any general fund support during the payback period.
6.) The completed sale allowed the City to fund the construction of the ballpark and move forward with this project.
Attached are two documents that provide additional information regarding the ballpark deal. The first is a memorandum from the City’s Financial Advisors, First Southwest, that provide some facts on how the deal was priced and the activities that led to the successful pricing of the ballpark bonds. Second, is a PowerPoint presentation that summarizes the ballpark financing including the sources and uses of funds, the maturity dates, call features and structure of the bonds.”