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ARE CONCERNED, THEY FEEL ASSURED THAT THEY WILL GET THE MBIA <br />INSURANCE THOUGH THEY HAVE CERTAIN RULES ABOUT WHAT THEY WILL AND <br />WILL NOT INSURE AND THEY ARE VERY MUCH CONCERNED ABOUT THE LONG <br />TERM MARKET RIGHT NOW. <br />COMMISSIONER WODTKE ASKED IF MR. BLAND WAS SAYING THAT <br />THE 9.24 INSURANCE BOND IS A DEFINITE PROPOSAL, AND MR. HOUGH STATED <br />THAT IT IS DEFINITE; THEY ONLY HAVE ONE CONTINGENCY AND THIS IS TO <br />GET THE MBIA INSURANCE, BUT HE BELIEVED IT IS 99% SURE. <br />CHAIRMAN SIEBERT FELT WITH A CONTINGENCY IT IS NOT FIRM. <br />MR. HOUGH STATED THAT THE RATE IS FIRM AND THE BID IS <br />FIXED, SUBJECT TO THE LEGAL OPINION OF THE BOND ATTORNEYS. IN <br />REGARD.TO THE MBIA INSURANCE PREMIUM, HE NOTED THAT THEY HAVE GONE <br />THROUGH THE ANALYSIS AND HAVE ALREADY QUOTED A PREMIUM OF $110,000, <br />AND ONCE THEY GET TO THAT POINT, IT IS AN AUTOMATIC THING. IF <br />THERE.SHOULD BE A WAR OR CLOSING OF THE BANKS BETWEEN NOW AND CLOSING, <br />THEN THERE IS NO DEAL. MR. HOUGH THEN DISCUSSED THE REQUIREMENT <br />FOR A ONE YEAR DEBT SERVICE MAXIMUM AMOUNT IN A RESERVE ACCOUNT, <br />OR $424,000. HE STATED THAT THEY CAN PUT THIS IN A TEN YEAR <br />CERTIFICATE OF DEPOSIT OR TREASURY BOND, ETC. THE CD AT 11% CAN <br />BE CASHED WITHOUT PENALTY AT ANY TIME. HE STATED IT HELPS THEM IN <br />MARKETING THE BONDS TO BE ABLE TO OFFER THE CERTIFICATE OF DEPOSIT <br />TO A BANK IN RETURN FOR THEM BUYING THE BONDS, AND THIS IS INCLUDED <br />AS A CONDITION OF THE PROPOSAL BEFORE THE BOARD. <br />CHAIRMAN SIEBERT ASKED WHAT IS THE PURPOSE OF THEM SELECTING <br />THE BANK, AND MR, HOUGH EXPLAINED THAT THEY USE IT AS LEVERAGE TO <br />SELL THE BONDS. IT HELPS THEM TO GIVE THE BOARD A BETTER BID, AND <br />THIS WOULD BE SECURED IN ACCORDANCE WITH THE LAWS OF FLORIDA. HE <br />STATED THAT THEY ARE NOT MAKING ANY PROPOSAL ABOUT INVESTING ANY <br />MONEY ON THE NOTES, JUST THE BONDS. <br />COORDINATOR THOMAS EXPLAINED THAT IN THE BOND FIELD IT <br />IS NOT INFREQUENT TO SELL AAA BONDS AT A PREMIUM, WHICH, IN EFFECT, <br />INCREASES THE COST. B BONDS WILL NOT SELL AT A PREMIUM. THIS IS <br />HOW BOND COMPANIES MAKE THEIR MONEY. <br />11 <br />ROOK 42 PAGE 91jifl <br />