8.5 IRB Defeasance CITY OF SALINA
~OUEST FOR COMMISSION ACTION DATE TIME
10/10/88 ,, 4:00 P.M.
AGENDA SECTION: Administration ORIGI~TI~ DEPARTMENT: APPROV~ FOR
~. 8 AGE.A:
CITY MANAGER
ITEM
aY: Dennis M. Kissinger aY:
Defeasance of $800,000 outstanding City of Salina Industrial Revenue Bonds (ElDorado
Motor Corporation)
Background:
At the request of Thor Industries, and in accordance with the bond documents, the City
Finance Director has executed an authorization letter appointing an agent and trustee
for funds escrowed for defeasing the above IRB issue. Since the bonds are not callable
{able to be paid off early), Thor Industries has chosen to defease the bonds.
Defeasance is accomplished by Thor Industries purchasing U.S. Treasury Securities
which will generate enough income to make all remaining bond payments. The securities
are placed in escrow with a trustee financial institution, which will serve as the
agent to make regular payments to the bondholders.
This action .has been reviewed and approved by the City Attorney and bond counsel.
Impact of Action:
A.) The bonds will actually be strengthened as they will now be fully backed by U.S.
~Treasury Securities, rather than just the companies involved.
B.) This action will have no negative impact on the City or our interests.
Action.Requested:
To establish a formal record in the minutes, staff requests City Commission
acknowledgement and ratification of designation of escrow agent, by motion.
COIv~ISSION ACTION
HOTION BY SECOND BY
TO:
Office of
Room 20~
300 West Ash Street
P.O. Box 736
SaUna. KS 67402-0736 October 6, 1 988
Telephone (91_3) 827-9653
The Federal Reserve Bank of Kansas City
10th and Grand Avenue
Kansas City, MO 64198
RE: $800,000 outstanding, City of Salina, Kansas Industrial
Revenue Bonds (El Dorado Motor Corporation'- Tenant and
Guarantor), Series 4-1-86
Gentlemen:
The City of Salina, Kansas hereby appoints First Securities
Company of Kansas, Inc. and/or The Southwest National Bank of
Wichita', Wichita, Kansas, as its agent to subscribe to U.S.
TreasUry Certificates of Indebtedness, Notes .and Bonds (State
and Local .Government Series) or any other U.S. Government
Obligations for purposes of establishing an escrow for defeasing
its Outstanding Series 4-1-86 Industrial Revenue Bonds. The
escrow bank will be The Southwest National Bank of Wichita,
Wichita, Kansas.
No proceeds from any prior State and Local Series redemption are
being utilized by the City of Salina, Kansas to acquire any of
these Government Obligations.
Very respectfully,
CITY OF SALINA, KANSAS
Robert K. Biles
City Clerk and Director of Finance
RKB/js
CITY ~
DIRECTOR OF FINANCE
ROBERT K. BILES, CPA
PE]~SONNI~1 DIRECIOR
M.E. ABBOt'[' AfF_.MBER . . . KAHSAS LF. AGUE OF ~ * NATIONAL LEAGUE OF CrITES
Fms
l~ NO~YH MAiN
-' O~obe~ 6,1988
TELEFAX #913-823-1866
M~. Gre~oz-y Bengston, Esq.
City Attorney
City-Co. Bldg.
300 W. A~h, P.O. Box 735
Satins, Kansas 67401
RE: $800,000 OUTSTANDING, CITY OF SALINA, KANSAS INDUSTRIAL REVENUE
BOIqDS (2L DORADO MOTOR CORPORATION - TENANT AND GUARANTOR),
SERIES 4-1-85
Dear Mr. Bengston:
'Per ou~ conversation, attached ia the letter tYom the City of Satin& to the Fsct~z~l
" Remez, ve Bank of Kansas City allowing the use of United States
Cez't"~iQates of indebtedness State and Local Government Se~es to defease via
ese'ow, Outstancting Industrial Revenue Bonds dated 4-1-88 of El Dm'ado Motor
Corpa~a~ion - now Thor Industries, Ins.
Per our conversation, we request that this letter be executed by an official of the
City arid forwarded via oyez, night Federal Expt, ess Mail directly .to the T~'ustee
Bank for the Bond issue. The T~-ustee Bank address is as follows.
Ms. Shirley Turner-.Grommett
Tz, ust Officer
The Southwest National Bank of Wichita
P.O, Box 1401, Douglas end Topeka
Wichita, Kansas 67202
We would like to reimburse the City of S_~{t_aa for the ~rect expenses in this
z~d. Please forward your advise of same to this write~.
Mr. Marl'in M. Cox, Jr.
Executive V~ce President
Fez'st Seourities Company of Kansas,
One Main Place, Suite '200
Wichita, Kansas 67202
Oetobe~ 8, 1958
Mr. O~'e~o~'y Benii'ston
Pa~e 2
Also as indicated ]37 telephone, time ia of the essence, We must have the
subsm, lption processed and in the mail to The Federal Reset-ye Bank of Kansas
C~lty with F~daly, Ootobe~ ?, 1988 postmark.
COMPANY.
OF
Bxeouttve ~mid~nt
MMC: 1I
Fiz~t Seourittes Company