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<br />STATE OF COLORADO <br /> <br />. <br /> <br />Colorado Water Conservation Board <br />Department of Natural Resources <br />1313 Sherman Street, Room 721 <br />Denver, Colorado 80203 <br />Phone: (303) 866.3441 <br />FAX: (303) 866-4474 <br /> <br />.~ <br /> <br />MEMORANDUM <br /> <br />Bill Owens <br />Governor <br /> <br />Greg E. Walcher <br />Executive Director <br /> <br />FROM: <br /> <br />Dan McAuliffe <br />Colorado Water Conservation Board Members CWCB Director <br /> <br />BiD Green, P.E., W~t~~upply Planning and Finance Section'l) pcting) <br />Mike Serlet, P.E!Ptjf, Water Supply Planning and Finance Section <br /> <br />November 10, 2000 <br /> <br />TO: <br /> <br />DATE: <br /> <br />RE: <br /> <br />Agenda Item No. 10 - Water Supply Planning and Finance- <br />Financial Matters - 2001 Lending Rate Recommendations <br /> <br />Introduction <br /> <br />. <br /> <br />This memorandum provides a summary of two key interest rates for the last twelve <br />months and the staff recommendation for a lending rate structure for CWCB lending <br />programs for the next twelve months. The procedures used here are identical to those <br />used to develop the lending rate structure for the last two years with the exception of the <br />agricultural lending rate which was established at the September 2000 Board meeting. <br /> <br />Discussion <br /> <br />Attached is a figure with a trace of weekly yields for the 30-year U,S. Treasury Bond and <br />the 30-year "A" municipal bond for the period November I, 1999 to November 6, 2000.\ <br />As the figure indicates, the average yield for both Treasuries and municipals was, <br />coincidentally, 6.02 percent for the twelve-month period. <br /> <br />The lending rate policy adopted by the Board in November 1997 states that the average <br />yield for the 30-year municipal bond in the preceding twelve months (rounded to the <br />nearest one-quarter of one percent) will be used directly as the Municipal High Income <br />lending rate. Based on the data for the preceding twelve months, that rate would be 6.00 <br />percent. Other rates were then developed as follows: <br /> <br />. <br /> <br />I Standard & Poor's definition of an 'A' bond rating is: "A debt rated 'A' has a strong <br />capacity to pay interest and repay principal although it is somewhat more susceptible to <br />the adverse effects of changes in circumstances and economic conditions than debt in <br />higher rated categories." <br />