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File #: RS2021-905    Name:
Type: Resolution Status: Passed
File created: 4/23/2021 In control: Metropolitan Council
On agenda: 5/4/2021 Final action: 5/4/2021
Title: A resolution amending Resolution RS2014-1066 to extend the duration of the general obligation extendable commercial paper program of The Metropolitan Government of Nashville and Davidson County
Sponsors: Kyonzte Toombs

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A resolution amending Resolution RS2014-1066 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. RS 2017-688 (the “Extendible 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 extendible commercial paper notes, provided that such Notes finally mature no later than January 1, 2022;

WHEREAS, the Metropolitan Government desires to extend to January 1, 2025 the final maturity for such notes;

WHEREAS, the Extendible 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 is hereby changed from January 1, 2022 to January 1, 2025.

2.                     Effective Date.  This Resolution shall take effect immediately upon its adoption.

3.                     Authorization of Additional Actions.  That the officers of the Metropolitan Government are hereby authorized to take such actions, and execute and deliver such agreements and certificates, as may be necessary to effectuate the amendment of the Extendible CP Resolution and the ECP Program described in Sections 1 and 2 above, including without limitation, (a) amending and restating the Dealer Agreement and the Issuing and Paying Agency Agreement and (b) supplementing the offering memorandum distributed in connection with the ECP Program.

4.                     Defined Terms.  Capitalized terms not otherwise defined herein shall have the meanings ascribed by the Extendible 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. 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 dates until January 1, 2022. This resolution simply approves another extension of the final maturity date until January 1, 2025.