Refunding Policy

1. Purpose

The purpose of this Refunding Policy (the “Policy”) is to establish guidelines governing the issuance of refunding bonds by the New Hampshire Municipal Bond Bank (the “Bond Bank”) in order to ensure that refunding transactions produce meaningful economic benefit, are executed in a prudent and transparent manner, and are consistent with the fiduciary responsibilities of the Bond Bank.

1. General Policy Statement

It is the policy of the Bond Bank to undertake current refundings and taxable advance refundings when such transactions achieve the minimum savings thresholds and structural objectives set forth herein, or when otherwise approved in accordance with this Policy.

Refunding transactions shall be evaluated based on net present value (“NPV”) savings and other relevant financial considerations, as determined in consultation with the Executive Director and the Bond Bank’s Financial Advisor.

III. Definitions

For purposes of this Policy:

• Current Refunding means the refunding of outstanding bonds within 90 days of their call date or maturity, consistent with applicable federal tax law.
• Advance Refunding (Taxable) means the refunding of outstanding bonds more than 90 days prior to their call date or maturity using taxable bonds.
• Net Present Value Savings (NPV Savings) means the aggregate present value of debt service savings, net of all costs of issuance and other transaction costs, expressed as a percentage of the par amount of bonds refunded.

1. Current Refundings

The Bond Bank shall not issue bonds to effect a current refunding unless the par amount of bonds being refunded is at least $30,000,000 and the refunding produces Net Present Value (NPV) savings of at least 3.00% of the par amount refunded.

If a current refunding is issued in combination with another series of bonds, including new money bonds, the minimum par amount and savings thresholds may be determined by a majority vote of the Board of Directors, in consultation with the Executive Director and Financial Advisor.

1. Deviations

Any deviation from the minimum requirements (to be determined 5 days prior to the sale date) set forth in Section IV shall require:

• Approval by a majority of the Board of Directors, in consultation with the Executive Director and Financial Advisor.

1. Advance Refundings (Taxable)

The Bond Bank shall not proceed with a taxable advance refunding unless:

1. The par amount of bonds being refunded is at least $30,000,000; and
2. The refunding produces NPV Savings of at least 3.00% of the par amount refunded.

Any deviation from these requirements shall be approved in the same manner as provided in Section V above.

VII. Allocation of Refunding Savings

1. The Bond Bank may allocate up to 100% of gross savings, net of costs, generated by a refunding transaction to participating communities.
2. The Bond Bank shall retain 100% of savings generated by:

1. The refunding of prior refunding bonds; and
2. The refunding of the Bond Bank’s reserve fund bonds.

The method and timing of allocation shall be determined by the Bond Bank in accordance with applicable bond documents and financing agreements.

VII. Implementation and Review

The Executive Director, in consultation with the Financial Advisor, shall be responsible for evaluating potential refunding opportunities and presenting recommendations to the Board of Directors.

This Policy may be amended by a majority vote of the Board of Directors.