Laserfiche WebLink
<br />• South Bend Redevelopment Authority <br />Special Meeting - October 18, 1991 <br />3. NEW BUSINESS (Cont.) <br />a. continued... <br />Mr. Wensits asked what the break-even point is on the <br />interest rate. Mrs. Kolata responded that the rule of <br />thumb that applies to private mortgages applies here <br />also. It will be necessary to refinance at 20 below the <br />present rate before it would be profitable to refinance, <br />so we would have to have a rate of 7.51 or less. <br />Mrs. Kolata noted that the par amount of the bonds would <br />be $4,305,000, including bond redemption, issuance costs, <br />some interest to current bond holders, etc. Mrs. Kolata <br />noted that the last payment on the bonds was made on <br />September 1. Therefore, we will owe the current <br />bondholders interest for the period between September 1 <br />and the date of closing for the refinancing. <br />Mr. Nussbaum noted that at the original refinancing, the <br />City tried to keep its options open for another <br />refinancing if Congress would find that a correction <br />should be made to allow the South Bend project to be tax <br />. exempt. This does not appear to be a possibility in the <br />near future. This refinancing assumes that we are <br />abandoning the possibility of .refinancing with tax exempt <br />status. The interest rate we can realize now is <br />approximately what we could have realized with a tax <br />exempt status in 1988. This is a very good opportunity. <br />Upon a motion by Mr. Fewell, seconded by Mr. Gammage and <br />unanimously carried, the Authority approved Resolution <br />No. 42, a resolution of the South Bend Redevelopment <br />Authority indicating its intent to issue Redevelopment <br />Authority Lease Rental Revenue Bonds and indicating its <br />intent to be reimbursed for preliminary project costs and <br />expenses from proceeds of bonds to be issued. <br />b. Authority approval requested for professional services <br />with Baker & Daniels related to Coveleski Stadium <br />Refinancin4. <br />Mrs. Kolata noted that we have an engagement letter from <br />Baker & Daniels in which they propose to act as bond <br />counsel for the refinancing. They will work on an hourly <br />basis, but in no event will the fee exceed $25,000. If <br />the financing should not close for any reason, they will <br />not seek reimbursement, except for out of pocket <br />• expenses. Mrs. Kolata noted that this is a very <br />favorable proposal and the staff recommends accepting the <br />proposal. <br />-3- <br />