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HomeMy WebLinkAboutMINUTES - 12031991 - 1.85 r` . + V� IN THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, STATE OF CALIFORNIA In the Matter of: ) RESOLUTION .NO. 91/766 The defeasance of certain bonds ) of the County and providing for ) the sale of related GNMA ) securities and other assets ) The Board of Supervisors of Contra Costa County RESOLVE: WHEREAS, the County of Contra Costa (the "County") has heretofore issued its 198.8 ' Home Mortgage Revenue Bonds (GNMA Mortgage-Backed Securities Program) , and its 1989 Home Mortgage Revenue Bonds (GNMA Mortgage-Backed Securities Program) (the "Bonds") ; and WHEREAS, it may now be desirable to provide for the defeasance of the Bonds and to provide for the sale of GNMA mortgage-backed securities (the "GNMA Securities") and other assets held under the indentures pursuant to which such Bonds were issued (the "Indentures") ; and WHEREAS, the Bonds may be def eased without the. necessity of any appropriation of funds by the County, and the County may receive surplus amounts held under the Indentures as a result of the defeasance of Bonds; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA AS FOLLOWS: Section 1. Subject to Section 2 hereto, the Chair of this Board, the County Administrator, the Director of Community Development, the Director of the Growth Management and Economic Development Agency, the Deputy Director-Redevelopment and the Senior Housing Planner of the County- are hereby authorized and directed, for and in the name and on behalf of the County, to do any and all -things and to take any and all actions and execute and deliver certificates, agreements and other documents (including, without limitation, the retention of Litten Financial Services as financial advisor and. a nationally recognized bond counsel firm� as special counsel, execution and of an agreement providing for the sale of the GNMA. Securities to Magnus Capital, Inc. at the fair market value thereof, execution and delivery of defeasance instructions and a defeasance escrow agreement relating to the Bonds, obtainment of daylight loans to facilitate the defeasance of the Bonds and sale of assets held under the Indentures, which they, or any of them, may deem necessary, or advisable ' in order to consummate the defeasance of the Bonds, the sale of the GNMA Securities and the sale of the other assets held under the Indentures as such officers determine to be in the.best interest of the County all in accordance with this resolution. All actions heretofore taken by the officers and agents of the County with respect to the defeasance or redemption of the Bonds and the sale of the GNMA Securities are hereby approved, confirmed and ratified. RESOLUTION NO. 91/766 Section 2 . The defeasance or redemption of the Bonds and the sale of the GNMA Securities shall not be consummated unless the officers of the County consummating such transactions on behalf of the County shall, in good faith, determine that (i) such defeasance may be consummated without any appropriation by the County, and (ii) with respect to the defeasance of the Bonds, the County will receive as a. result of such defeasance an aggregate payment of cash (net . of expenses) of approximately $1, 000, 000 for the 1988 Bonds and $250, 000 for the 1989 Bonds. Section 3, The resolution shall .take effect immediately upon its adoption. ADOPTED this 3rd day of December, .1991, by the following vote: AYES: Fanden, Schroder, McPeak, Torlakson, Powers NOES: None ABSENT: None air of the Board of Supervisors ATTEST: Phil Batchelor County .Administrator and Clerk of the Board of_°�upervisors By. Deputy sra20/jb/defeas.res RESOLUTION NO. 91/766 i Contra Cos TO: BOARD OF SUPERVISORS ta . a ( u* FROM: Harvey E. Bragdon sr-� Uri, Director of Community Development DATE: December 3 , 1991 SUBJECT: 1988 and 1989 Home Mortgage Revenue Bonds SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Adopt resolution approving a residual asset purchase contract between the County and Magnus Capital Corporation relative to the 1988 and 1989 Home Mortgage Revenue Bonds.- , FISCAL IMPACT The County would receive a residual asset cash payment upon completion of the proposed defeasance of the 1988 and 1989 Home Mortgage Revenue Bonds. The magnitude of the cash residual is estimated at $1. 5 million. The proceeds of the cash residual must be used for affordable housing purposes. BACKGROUND/REASONS FOR RECOMMENDATIONS On June 15, 1988, the County of Contra Costa issued its 1988 Home Mortgage Revenue Bonds. On May 1, 1989 the County of Contra Costa issued its 1989 Home Mortgage Revenue Bonds. The principal amount of bonds issued were $72 million and $44 . 69 million in the 1988 and 1989 programs respectively. The Home Mortgage Revenue Bonds for both programs are secured by mortgage backed securities issued by the Government National Mortgage Association (GNMA) . Bec use of the G securities, the bonds are rated AAA. CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEND N OF B D COMMITT E APPROVE OTHER SIGNATURE(S) : ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. cc: Community Development SRA19/jb/88-9hmrb.bos ATTESTED Q/ PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS �AN COUNT ADMINISTRATOR BY , DEPUTY The proposed. defeasance would replace the existing GNMA securities with federal securities (Treasury Bills) . Because of a unique relationship that exists in the market today between the cost of federal securities and the value of GNMA securities, the County can realize an immediate cash return on its asset value. While the underlying security for the Home Mortgage Revenue Bonds will change, their rating would not. The federal securities purchased would be sufficient to retain the AAA rating. The actions provided for in the resolution are summarized in Appendix A. ATTACHMENT A ACTIONS TO BE TAKEN 1. Approve form and authorize execution of a residual asset purchase contract between the County of Contra Costa and Magnus Capital Corporation (purchaser) ; 2 . Appoint a nationally recognized law firm as special counsel and Litten Financial Consulting as financial advisor; and 3 . Authorize officers and designated parties to execute all documents and take such actions necessary to complete the transaction.