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SUMMARY: Authorize the City Manager to Execute an Extension of the Letter of Credit Related to Two Types of Revenue Bonds for Alameda Point Improvement Project
Recommendation to Authorize the City Manager to Execute an Extension of the Letter of Credit with the Combined Entity, Mitsubishi UFJ Financial Group (MUFG) Union Bank, N.A., Related to the Current Outstanding $6,200,000 Alameda Public Financing Authority (APFA) Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series A, and the Current Outstanding $3,200,000 APFA Taxable Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series B, with Updated Terms and Conditions. [City Council and APFA] (Finance 2410)
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To: Honorable Mayor and Members of the City Council
Honorable Chair and Members of the Alameda Public Financing Authority
From: Eric Levitt, City Manager
EXECUTIVE SUMMARY
This action will authorize the City Manager to execute an extension of a letter of credit (LOC) with MUFG Union Bank for the outstanding $9.4 million of Variable Rate Demand Revenue Bonds, 2003 Series A and B. The terms and conditions related to the cost of providing the letter of credit have been revised to increase the fee from 1.00% to 1.15% of the then outstanding bond balance plus 60 days of interest and to extend the date to June 14, 2021.
BACKGROUND
The Alameda Public Financing Authority (the Authority) issued a total of $13.44 million in variable rate bonds related to Alameda Point in 2003. The source of repayment for these bonds is the rental income received from properties managed by the City of Alameda's (City) Base Reuse Department. The credit and liquidity support for the bonds is currently provided by a direct pay letter of credit from MUFG Union Bank, N.A., which expires on June 14, 2019. The indenture of trust for the bonds requires that a new or extended letter of credit be in place 30 days prior to the expiration of the current lette...
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