Metro - File #: 2017-0416

• File #: 2017-0416
• Type: Resolution
• Status: Passed
• File created: 6/2/2017
• In control: Finance, Budget and Audit Committee
• On agenda: 7/19/2017
• Final action: 7/27/2017
• Title: CONSIDER: A. AUTHORIZING the Chief Executive Officer to award the direct-pay letter of credit ("LOC") to be provided by Citibank, N.A. ("Citi") for a commitment amount of $150 million for a three-year term for the Proposition A Commercial Paper program at an estimated cost of $4.313 million and enter into a reimbursement agreement and related documents associated with such LOC. B. If unable to reach agreement with the recommended bank described above, authorize the Chief Executive Officer to finalize negotiations with each successively ranked bank for an LOC having a three-year term and the estimated costs shown in Attachment A. C. ADOPTING a resolution with respect to the Proposition A Commercial Paper program that approves the selection of Citi or such other banks selected by the Chief Executive Officer for the Proposition A commercial paper program, and the form of the reimbursement agreement, fee agreement and reimbursement note in substantially similar form with those on file w...
• Sponsors: Finance, Budget and Audit Committee
• Indexes: Budgeting, Debt, Debt Service - Prop A Governmental (Project), Debt Service-Union Station Acquisition (Project), Program, Proposition A, Request For Proposal, Resolution, Safety

Date	Action By	Action	Result
7/27/2017	Board of Directors - Regular Board Meeting

Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
JULY 19, 2017

Subject
SUBJECT: PROPOSITION A COMMERCIAL PAPER PROGRAM

Action
ACTION: AWARD CONTRACT FOR LETTER OF CREDIT

Heading
RECOMMENDATION

Title
CONSIDER:

A. AUTHORIZING the Chief Executive Officer to award the direct-pay letter of credit ("LOC") to be provided by Citibank, N.A. ("Citi") for a commitment amount of $150 million for a three-year term for the Proposition A Commercial Paper program at an estimated cost of $4.313 million and enter into a reimbursement agreement and related documents associated with such LOC.

B. If unable to reach agreement with the recommended bank described above, authorize the Chief Executive Officer to finalize negotiations with each successively ranked bank for an LOC having a three-year term and the estimated costs shown in Attachment A.

C. ADOPTING a resolution with respect to the Proposition A Commercial Paper program that approves the selection of Citi or such other banks selected by the Chief Executive Officer for the Proposition A commercial paper program, and the form of the reimbursement agreement, fee agreement and reimbursement note in substantially similar form with those on file with the Board Secretary and that makes certain benefits findings in compliance with the Government Code, Attachment B.

(REQUIRES SEPARATE, SIMPLE MAJORITY VOTE OF THE BOARD)

Issue
ISSUE

The Proposition A Commercial Paper program ("Prop A CP") has been proven to be a flexible, cost effective method of short-term financing for our capital program. A letter of credit or similar facility is required for this program in order to guarantee repayment of notes at maturity. Currently the $200 million of Prop A CP LOCs with Sumitomo and Union Bank are at capacity and we are seeking to increase liquidity by $150 million to bring us up to the authorized Prop A CP program amount of $350 million. The additional capacity is necessary because of the cash flow requirements of the Pr...