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• <br /> <br />South Bend Redevelopment Authority <br />Special Meeting - October 18, 1991 <br />3. NEW BUSINESS (Cont.) <br />a. continued... <br />Mr. Wroblewski recognized Mayor Kernan and asked if he <br />would like to make a few comments regarding the <br />refinancing. <br /> <br />Mayor Kernan noted that the first piece of business the <br />Authority addressed when it came into existence was the <br />refinancing of the Coveleski Stadium. As a result of <br />those efforts in 1988, the City was able to reduce the <br />net interest costs from 13.42% to 9.51%, saving $390,000 <br />over the life of the bond, while keeping the term of the <br />bond the same. Because the interest rates in today's <br />market are significantly lower than the 9.51%, we expect <br />to be able to refinance the bond to save an additional <br />$250,000 over the life of the bond. Banc One, who bought <br />the bond in the previous refinancing, will handle this <br />refinancing. The term will remain the same. The rate of <br />interest will be established on November 13, when the <br />Purchase Agreement is signed by the Authority. We will <br />only proceed with the refinancing of the bond if the net <br />savings to be realized are at least $250,000. <br />Mr. Ladewski, representing the South Bend Common Council, <br />noted that the Council, watchdog of the tax dollars, <br />commends the Mayor and financial staff for their <br />foresight in this matter. <br />Mrs. Kolata noted that Baker & Daniels has agreed to <br />provide bond counsel "at risk", meaning that if the <br />interest rate is not low enough to justify refinancing, <br />there will be no cost to the City for services to that <br />point, except reimbursement for out of pocket expenses. <br />Mrs. Kolata noted that Banc One Capital Corporation will <br />be the underwriter on the refinancing and will be going <br />entirely "at risk." <br />Mr. Wensits asked how much debt remains on the bond. <br />Mrs. Kolata responded that the outstanding principal is <br />$4,155,000. <br /> <br />Mr. Wensits asked if the Authority is uncertain whether <br />they will go ahead with the refinancing. Mrs. Kolata <br />responded that the Authority fully expects to refinance. <br />Only a significant upward move of interest rates would <br />prevent it. <br />-2- <br />