In this session, experienced issuers and municipal advisors will discuss past refundings, their strategy, and how they measured the success of their refunding transactions. In light of the points made in prior sessions, panelists will explore the evaluation of refundings generally, the need to re-examine conventions, and the potential outcomes for altering strategy and practices in the future.

Most municipal bonds have been structured with a 5% coupon, callable at par in Year 10. Issuers pay for the considerable cost of the par call by accepting a lower sale price. Subsequent refunding, by calling or another means prior to the call date, generates cashflow savings but forfeits valuable call options. This session will explain how to factor the forfeited option value into the refunding decision using the refunding efficiency approach. Five percent bonds callable at par are virtually certain to be refunded by Year 10, even if interest rates increase. To reduce the cost of recurring transactions, the presenter will also explore alternative call structures.

How have market preferences and the needs of issuers shaped the structure of municipal bonds? Why are municipal bonds refunded before maturity or the call date? This session will examine structural conventions of municipal bonds and the inevitability of refunding. Presenters will explore latest refunding strategies, practices, and evaluation methods for achieving the highest value in a refunding transaction.

Managing the cost of financing is one of the highest priority responsibilities for agency finance professionals. Refunding is one of the most impactful financial management tools issuers can use to mitigate risk and reduce the cost of debt, or is it? The preconference sessions will explore refunding strategies, the financial justifications, the call option itself, and the circumstances when refundings may not be as efficient as issuers would like them to be. This program is intended to help issuers to understand and challenge conventions, and more fully consider the factors that can drive the success of future refunding transactions.

The difference between the amount of a settlement or judgement and public agency  liability coverage most often can’t be drawn from reserves without threatening an  agency’s long-term financial sustainability. Developing a payment strategy for filing the  gap will be essential. This session will discuss the strengths and weaknesses of different  payment strategies for different agencies including receiverships and emergency  apportionments, tax increases, and bond issuance. Panelists will address the challenging  constitutional, statutory, and procedural hurdles and how they may be overcome to  form a viable payment strategy.

This session will explain how public agencies have insured against their liability claims through risk-pools – pooling funds and sharing risk across many agencies. California’s  risk-pools did not anticipate the costs of retroactive claims associated with the change in  the statute of limitations for childhood assaults. This has led to a huge liquidity gap for  the onslaught of new claims, among other coverage limitations. Panelists will address the state of the risk-pool landscape, specific limitations of risk pools to settle claims individually and collectively, and their expectations for a massive cost gap that will be absorbed by the general funds of all pool participants.

This session will discuss the magnitude of claims, those agencies directly impacted, and  the limitations on our ability to estimate the full scope of liability. Panelists will frame our understanding of the total liability versus the general fund capacity of local  agencies, the potential effects on public services, and the current response strategy of  local leadership. The session will also discuss the direct and indirect ratings implications,  potential risks of financial contagion, and the impact on the cost of financing.