VARIABLE RATE DEBT:

1

• VARIABLE RATE DEBT
• If not now, When?
• Presentation to State Debt Management Network
• Noreen P. White, President, Municipal Advisory
  Partners, Inc.

2

• Fixed or Variable?
• Fixed Rate Debt
• Known Debt Service
• Historically Higher Cost of Funds
• Generally Not Callable for 10 Years
• Variable Rate Debt
• Estimated Debt Service
• Historically Lower All-In Borrowing Cost
• Callable at Par at Any Time

3

• Variable Rate Debt Other Considerations
• Aggregate Debt Composition
• Administrative Requirements
• Credit Rating Implications
• Ability to Maximize Arbitrage Opportunities
• Hedged versus Unhedged
• Liquidity/Credit Enhancement

4

• If Yes to Variable, then
• What type?
• Commercial Paper
• Variable Rate Demand Bonds
• Auction Products
• Synthetic versus Real

5
LONG TERM INTEREST RATE COMPARISONS(20 GO Bond
Index, 25 Revenue Bond Index, 30 Year Treasury
Bond)Past Five Years
6
SHORT TERM INTEREST RATE COMPARISONS(BMA Index,
3-Month T-Bill, 30Month LIBOR)Past Five Years