FY2016 CCDOA Financial Report as of 6302016.pdf - page 95

CLARK COUNTY DEPARTMENT OF AVIATION
CLARK COUNTY, NEVADA
Notes to Financial Statements
For the Fiscal Years Ended June 30, 2016 and 2015
82
Series 2010C:
On February 9, 2010, the County issued $454.3 million of fixed rate Taxable Direct Payment Build
America Bonds under the provisions of the ARRA. The interest on these bonds is not excluded from gross
income for the purpose of federal income taxation. Under the provisions of ARRA, the Department is to
receive, on or about the date of each interest payment, a cash subsidy payment from the United
States Treasury equal to 35 percent of the interest payable on the Series 2010C Bonds. The Series 2010C
Bonds have an interest rate of 6.82 percent; however, when the 35 percent rebate is factored in, the
effective interest rate is 4.43 percent. The bonds have staggered scheduled maturities through 2045.
Interest payments are due on January 1 and July 1 of each year, and scheduled principal payments
are due on July 1. The bonds were issued to fund the construction of T3. No debt service reserve fund
was required, and the bonds were not insured.
The U.S. Office of Management and Budget reported to the U.S. Congress on the sequestration of
federal funds for federal fiscal years 2016 and 2015. As part of the federal sequestration, the subsidy
payment for Build America Bonds was reduced. For the 2010C Bonds, the reductions amounted to
$737.4 thousand and $791.6 thousand in the course of FY 2016 and FY 2015, respectively.
Series 2010D:
On February 9, 2010, the County issued $132.5 million of fixed rate Senior Lien Non-AMT Private Activity
Airport System Revenue Bonds to finance a portion of the T3 project and to pay certain issuance costs.
The bonds have stated interest rates between 3.00 percent and 5.00 percent, and the yields range
from 2.50 percent to 4.37 percent. The bonds mature in 2024. Interest payments are due on January 1
and July 1 of each year, and scheduled principal payments are due on July 1. The bonds were
uninsured, and no debt service reserve fund is required.
Series 2015A:
On April 30, 2015, the County issued $59.9 million in fixed rate Series 2015A Bonds at a premium of $8.6
million. The stated interest rate on the bonds is 5.00 percent, and the yield is 3.33 percent. The bonds
have staggered scheduled maturities through July 1, 2040. Interest payments are due on January 1
and July 1 of each year, and scheduled principal payments are due on July 1. The proceeds, along
with $3.4 million in excess debt service reserve from the Series 2008E Bonds, were used to refund the
Airport System Revenue Bonds Senior Series 2005A Bonds, to purchase a reserve fund policy, and to
pay for certain costs of issuance. This refunding resulted in a net present value savings of $8.0 million
and a gain on refunding of $1.1 million. The reserve fund policy was issued by Build America Mutual
Assurance Company.
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