3/12/1980 - Laserfiche WebLink

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UP WITH A LOW INTEREST RATE FOR THE REMAINDER OF THE TIME, EXCHANGING BONDS; WE DON T HAVE ANY PROBLEM WITH SECURITY; AND OUR SECURITY COULD BE LESS. IF YOU GO WITH THE NOTES AND IT TURNS OUT THAT THE INTEREST RATES ARE GOING TO RISE, WHICH IS A POSSIBILITY, WE COULD END UP WITH.INSUFFICIENT SECURITY AND THEN WHAT DO WE DO? HE STATED THAT CONSIDERING ALL THIS, HE WOULD VOTE FOR THE BONDS. FINANCE OFFICER BARTON INQUIRED ABOUT THE PRICE FOR A REOFFERING. MR. HOUGH STATED THAT THE BONDS WOULD BE PRICED OUT TO AN 8.75 YIELD ON A REOFFERING. THE ATTRACTION FOR THE NOTES IS TO MAKE A PROFIT ON REINVESTMENT, BUT THIS WOULD ALSO EXIST ON THE BONDS AND COULD EVEN BE GREATER. ANY ULTIMATE SAVINGS FROM REFUNDING THE BONDS WOULD NOT BE GENERATED UNTIL AFTER THE TENTH YEAR. COORDINATOR THOMAS FELT IT ALL GETS BACK TO THE QUESTION OF WHETHER INTEREST RATES WILL COME DOWN. COMMISSIONER WODTKE NOTED THAT WE HAVE SEEN THE RATES ON THE NOTES GO FROM 7% TO 11% IN THE LAST FEW WEEKS AND INQUIRED ABOUT THE RATES ON THE BONDS. MR. HOUGH REPORTED THAT THEY HAVE GONE FROM 8 TO 9. COORDINATOR THOMAS STATED THAT THERE HAS BEEN A COMPLETE REVERSAL IN THE MARKET ON LONG TERM AND SHORT TERM MONEY, AND MR. HOUGH NOTED THAT THIS HAPPENS IN A CREDIT CRUNCH. COMMISSIONER LOY ASKED HOW SOON THE COUNTY CAN RECEIVE THE FUNDS IF WE GO WITH THE BONDS. MR. BLAND STATED THAT THE BONDS COULD BE COMPLETED AND PRINTED WITHIN TWO WEEKS, AND THE NOTES ABOUT THE SAME. THE COUNTY WOULD PHYSICALLY GET THE MONEY IN TWO TO THREE WEEKS, AND THE RATE WOULD BE LOCKED IN. CHAIRMAN SIEBERT STATED THAT HIS GUT REACTION IS THAT THE INTEREST RATES WILL GO DOWN, BUT, JUST THE SAME AS COMMISSIONER LYONS, HE IS CONCERNED ABOUT GUESSING, WRONG AND DID NOT WISH TO GAMBLE BECAUSE IF THE INTEREST RATES DON'T DROP, WE COULD BE IN SERIOUS TROUBLE. 9 MAR 121980 wx 42. PAcE 908