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School Building Assistance: Funding for the 21st Century

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Offering a New Credit ... Investors will view the Sales Tax Bonds as a separate credit from the GO ... Pricing Experience With Similar Credits ... – PowerPoint PPT presentation

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Title: School Building Assistance: Funding for the 21st Century


1
School Building Assistance Funding for the 21st
Century
Debt Marketing Perspective
August 23, 2004
2
City and Town Bond Anticipation Notes
3
City and Town Bond Anticipation Notes
  • Substantial borrowing by cities, towns and
    regional school districts for the Commonwealths
    portion of construction costs
  • Approximately 245 communities currently
    participate in the SBA program
  • Of those 245 communities, a large number have
    already issued BANs, and in some cases long term
    bonds, in anticipation of Commonwealth aid
  • Estimated BAN Principal ( in millions)

4
Offering a New Credit
5
Other Major Sales Tax Issuers
  • Other major sales tax credits include
  • California Economic Recovery Bonds
  • Massachusetts Bay Transportation Authority
  • New York Local Government Assistance Corporation

6
Investor Exposure to Commonwealth GOs
  • Outstanding Commonwealth General Obligation bond
    principal has increased by 3.4 billion since
    2000
  • Commonwealth of MA GO Bond Principal ( in
    millions)

Commonwealth of MA GO Spreads to MMD 2000 vs.
2004
7
Offering a New Credit
  • Relative size of debt issuers within the
    Commonwealth
  • Massachusetts Issuers Debt Outstanding

8
Offering a New Credit
  • School Building Authority Sales Tax Bonds will
    differ from the Commonwealths GO debt by both
    credit and term
  • Investors will view the Sales Tax Bonds as a
    separate credit from the GO
  • The term will provide substantial volume in
    maturities which do not overlap with GO debt

Annual Principal Amortization ( in millions)
9
Pricing Experience With Similar Credits
  • When the MBTA Senior Sales Tax Bonds were priced
    in 2000, the average spread 1 basis point through
    MMD, versus an average of 6 to 12 basis points
    off MMD for Commonwealth GO Bonds priced at a
    similar time

10
Pricing Experience With Similar Credits
11
Pricing Experience With Similar Credits
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