Page 125 - CityofMansfieldFY23Budget

Other Credit Facility:

Capital Lease Annual tax or revenue appropriation
Tax-exempt or can be taxable
Acquisition of personal property
Able to refinance

Line of Credit Qualify statutorily
Immediate need for financing
Borrowings retired with bond proceeds
Fulfill bond reserve covenants
Borrowings repaid from current resources

Commercial Paper Revenue pledge as security
Demand from the market for small issuer
Commercial paper

Derivatives Minimize risk of market
Reduced costs versus fixed costs
Creates flexibility
Understood risk warrants the savings

Surety Bond & Bond Insurance Debt service is less than cost of insurance
Double AA rated insurer
Competitive offers from two insurers

Debt Structure

Historically, the City of Mansfield’s debt structures have been designed to coincide with the fiscal
policies of the City of Mansfield, Texas, essentially allowing growth to pay for growth by properly setting
the maturities of the debt to equal or less than the usefulness of the improvement or asset.

Typical debt structure of a bond issuance:

 Term or serial bonds structured for annual payments
 Traditional call feature that does not influence the price of the bonds
 Average bond life of 10.5 years to 12.0 years
 Level payments for twenty years
 Pricing structured to allow for premiums and discounts
 First year payment to begin in second year of construction
 Bond insurance
 Surety bond if warranted

The City of Mansfield has sought non-traditional avenues of capital improvement financing; however, the
City is considered a “small issuer” under the law. It has been more economical for the City to maintain
this type of debt structure for its bond sales. This does not preclude the City from considering different
structures or structuring its issuance differently from its typical debt structure. The purpose of the
structure is to provide the City with the lowest possible costs under market conditions at the time of
issuance.

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