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Resolution amending Resolution RS2014-1066, as amended, to extend the duration of the general obligation extendable commercial paper program of The Metropolitan Government of Nashville and Davidson County.
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WHEREAS, pursuant to the provisions of Title 9, Chapter 21, Tennessee Code Annotated (the “Act”), and Metropolitan Council Resolution No. RS2014-1066, as heretofore amended by Resolution No. RS2017-688 and Resolution No. RS2021-905 (the “Extendable CP Resolution”), The Metropolitan Government of Nashville and Davidson County (the "Metropolitan Government") has heretofore authorized the issuance of up to $325 million at any time of general obligation extendable commercial paper notes (the “Notes”), provided that such Notes finally mature no later than January 1, 2025; and
WHEREAS, the Metropolitan Government desires to extend the final maturity of the Notes to January 31, 2029; and
WHEREAS, the Extendable CP Resolution may be amended, pursuant to Section 6.01 thereof, by extending the final maturity of the commercial paper notes insofar as such amendment does not affect the holders of any outstanding commercial paper notes, all of which mature prior to the current final maturity date.
NOW, THEREFORE, BE IT RESOLVED by the Metropolitan County Council of The Metropolitan Government of Nashville and Davidson County, as follows:
1. Final Maturity Date. The definition of Final Maturity Date as used in the Extendable CP Resolution is hereby changed from January 1, 2025 to January 31, 2029.
2. Effective Date. This Resolution shall take effect immediately upon its adoption.
3. Authorization of Additional Actions. The officers of the Metropolitan Government are hereby authorized to take such actions, and execute and deliver such documents, agreements and certificates, as may be necessary to effectuate the amendment of the Extendable CP Resolution and the ECP Program described herein, including without limitation, (a) amending and/or restating the Dealer Agreement and the Issuing and Paying Agency Agreement and (b) supplementing and/or amending and restating the Offering Memorandum distributed in connection with the ECP Program. The Metropolitan Government hereby approves the use of the amended and restated Offering Memorandum in connection with the ECP Program in substantially the form of the draft attached hereto as Exhibit A, with such changes, insertions, deletions, amendments, and supplements as any Authorized Officer shall approve.
4. Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings ascribed by the Extendable CP Resolution.
Agenda Analysis
Analysis
This resolution extends the duration of Metro’s general obligation extendable commercial paper. The Council first authorized a commercial paper program in 2003 as a form of short-term financing for capital projects to cover interim construction costs while awaiting the appropriate time to issue the long-term bonds. Commercial paper is basically a line of credit that Metro can access to commence capital projects approved by the Council. This program allows Metro to issue variable rate tax-exempt commercial paper with varying maturity dates ranging from 1 day to 270 days, but commercial paper is usually “rolled” until the bonds are issued. State law allows commercial paper to be rolled up to six years. The State of Tennessee uses a similar commercial paper program, as do many other large cities. Metro’s commercial paper program has been successful in helping Metro Government time the market to obtain the most favorable interest rate possible for the issuance of long term bonds.
Resolution No. RS2014-1066 authorized the issuance and sale of general obligation bond anticipation notes not to exceed $200 million in the form of commercial paper. Resolution No. RS2017-688 approved an amendment to Metro’s commercial paper authorization to increase the maximum outstanding amount from $200 million to $325 million and extended the final maturity date until January 1, 2022. RS2021-905 approved an extension of the final maturity date until January 1, 2025.
The resolution under consideration approves another extension of the final maturity date until January 31, 2029.