8 CRR-NY 175.41NY-CRR
8 CRR-NY 175.41
8 CRR-NY 175.41
175.41 Analysis of average interest rates applied to capital debt incurred by the City of New York for school purposes, or by the New York City transitional finance authority for school purposes if no such capital debt is incurred by the City of New York, for use in the apportionment of building aid to the city school district of the City of New York.
(a) Definitions.
For the purpose of this section, the following definitions shall apply:
(1) Obligation shall mean any amortized debt incurred by the City of New York for the funding of capital expenditures for school purposes of the city and its departments, agencies or subdivisions, including but not limited to the city school district of the City of New York and the School Construction Authority of the City of New York. In the event that no amortized debt is incurred by the City of New York for the funding of capital expenditures for school purposes, obligation shall mean any amortized debt incurred by the New York City transitional finance authority for the funding of capital expenditures for school purposes of the city and its departments, agencies or subdivisions, including but not limited to the City School District of the City of New York and the School Construction Authority of the City of New York.
(2) Total principal for school purposes shall mean that portion of the original proceeds received by the City of New York from the sale of an obligation that is expended for school purposes.
(3) Term shall mean the number of years represented by the amortization of an obligation, expressed to the nearest whole number of years.
(4) Total net proceeds shall mean the sum of the total principal for school purposes less costs of issuance (including underwriters discount and bond insurance), less original issue discount, plus original issue premium attributable to such total principal for school purposes. Bond insurance, original issue discount and original issue premium shall be allocated to such principal on the basis of actual cost for that portion of principal. Costs of issuance, including underwriters discount, but not bond insurance, shall be allocated pro rata on the basis of the ratio of proceeds (adjusted for original issue discount and premium only) attributable to school purposes to total proceeds (adjusted for original issue discount and premium only) in the bond series.
(5) Average interest rate shall be determined by doubling the semi-annual interest rate, compounded semi-annually, necessary to discount the debt service payments (including interest, principal and mandatory redemptions) from the payment dates to the dated date such that the sum of such discounted payments equal the total net proceeds.
(i) When a particular maturity of bonds has more than one interest rate, the principal amount allocated to school purposes shall be allocated pro rata based on the ratio of principal amount of an interest rate in a maturity to the total principal amount of the maturity.
(ii) When there are proceeds of more than one series of bonds in a calculation period, then the average interest rate shall be determined by doubling the semi-annual interest, compounded semi-annually, necessary to discount the debt service payments (including interest, principal and mandatory redemptions) from the payment dates to the dated date of the series of bonds with the earliest dated date such that the sum of such discounted payments equals the sum of the net proceeds discounted to the dated date of the series of bonds with the earliest dated date.
(iii) The interest rate for adjustable rate bonds shall be determined by taking the municipal swap index selected by the commissioner (or if such index is no longer available, using comparable data) averaged over the last 10 years, plus the costs of credit facilities, remarketing fees, broker-dealers fees and auction agent fees, as applicable, that are in effect at the time of the issuance of the bonds.
(iv) If there is an interest rate swap associated with the adjustable rate bonds that creates a synthetic fixed rate, then the interest rate shall be determined by the sum of the fixed swap rate plus the cost of credit facilities, remarketing fees, broker-dealers fees and auction agent fees, as applicable, that are in effect at the time of the issuance of the bonds.
(b) The analysis of the actual average interest rate and of the estimated average interest rate which must be submitted by the Comptroller of the City of New York to the commissioner by September 1st of the current year pursuant to section 3602(6)(e)(1)(c) and (2)(a)(ii) of the Education Law shall include such data as is prescribed by the commissioner, including but not limited to the following:
(1) A listing of all obligations incurred by the City of New York for the period from July 1st of the prior calendar year to June 30th of the current calendar year. Such listing shall include for each obligation listed and for that portion of each obligation listed that is for school purposes:
(i) the total principal;
(ii) the term;
(iii) the total net proceeds;
(iv) the average interest rate;
(v) the total interest;
(vi) if the bonds are floating-rate bonds or attached to swap(s), include the swap rate, the cost of credit facilities, remarketing fees, broker-dealers fees and auction agent fees, as applicable;
(vii) costs of issuance, including breakout of underwriters discount and bond insurance; and
(viii) original issues premiums and discounts.
(2) A statement certifying that the data provided pursuant to paragraph (1) of this subdivision reasonably reflects anticipated obligations to be incurred by the City of New York for the period from July 1st of the current calendar year to June 30th of the next calendar year, or, in the alternative, a listing of all anticipated obligations to be incurred by the City of New York for such period that shall include for each obligation listed and for that portion of each obligation listed that is for school purposes:
(i) the total principal;
(ii) the term;
(iii) the total net proceeds;
(iv) the average interest rate;
(v) the total interest;
(vi) if the bonds are floating-rate bonds or attached to swap(s), include the swap rate, the cost of credit facilities, remarketing fees, broker-dealers fees and auction agent fees, as applicable;
(vii) costs of issuance, including breakout of underwriters discount and bond insurance; and
(viii) original issue premiums and discounts.
(c) Upon review and approval of the listing provided by the Comptroller of the City of New York pursuant to paragraph (b)(1) of this section, the commissioner shall determine the actual average interest rate applied to all obligations incurred by the City of New York during the base year, as required by section 3602(6)(e)(2) of the Education Law. The actual average interest shall be determined using the methodology described in paragraph (a)(5) of this section. Such actual average interest rate shall be expressed as a decimal rounded to the nearest eighth of one percent.
(d) Upon review and approval of the statement of the Comptroller of the City of New York certifying that the data provided pursuant to paragraph (b)(1) of this section reasonably reflects anticipated obligations to be incurred by the City of New York for the period from July 1st of the current calendar year to June 30th of the next calendar year, the commissioner shall certify that the actual average interest rate applied to all obligations incurred by the City of New York during the base year shall be the estimated average interest rate applied to all obligations to be incurred by the City of New York during the current year, or, in the alternative, upon review and approval of the listing provided by the Comptroller of the City of New York pursuant to paragraph (b)(2) of this section, the commissioner shall determine the estimated average interest rate applied to all obligations to be incurred by the City of New York during the current year. The estimated average interest shall be determined using the methodology described in paragraph (a)(5) of this section. Such estimated average interest rate shall be expressed as a decimal rounded to the nearest eighth of one percent.
8 CRR-NY 175.41
Current through July 15, 2021
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