Title
A Resolution regarding the redemption of certain bonds.
Body
Recommended Action: Approve the Resolution.
Background: In 1997, Sedgwick and Shawnee Counties jointly issued several series of single family mortgage revenue bonds designated as 1997 Series A (the "Bonds"), the proceeds of which were applied to acquire securities backed by mortgage loans made to first-time homebuyers in Sedgwick and Shawnee Counties and other cooperating jurisdictions of the State of Kansas. Most of the principal amount of the Bonds has already been retired through early mortgage prepayments or redemption, and only $160,000 of Bonds remains outstanding.
The attached resolution for consideration by the Sedgwick County Board of County Commissioners (BOCC) authorizes the defeasance and redemption of the Bonds, the sale of the remaining mortgage-backed securities (MBSs) relating to the Bonds and the purchase of the outstanding custodial receipt relating to the Bonds. The net proceeds of the sale of the MBSs will be applied to redeem the outstanding Bonds, take certain actions in lieu of mortgage forgiveness that will reduce the costs to certain qualified borrowers that participate in the current Kansas Housing Assistance Program, and pay related costs. Any remaining funds will be paid directly to Sedgwick and Shawnee Counties.
Alternatives: Do not approve the resolution and allow the bonds to mature, or prepay in due course.
Financial Considerations: The underwriter, George K. Baum & Company, has determined that current market conditions may permit the sale of the MBSs at a premium, which will result in a financial benefit to the Issuers. The underwriter has provided a preliminary analysis dated September 25, 2018. These cash flows indicate a potential cash release to the counties of approximately $100,000, which would be split 55% to Sedgwick County and 45% to Shawnee County. The final cash flows are dependent on market conditions at the time of sale. Any gains received by Sed...
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