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<br />.- <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />" <br /> <br />Colorado Water Conservation Board <br />Department of Natural Resources <br />1313 Sherman Street <br />Denver, Colorado 80203 <br />Phone: 13031 866.3441 <br />FAX: (303) 866.""74 <br /> <br />STATE OF COLORADO <br /> <br />. <br /> <br />Bill Owens <br />Governor <br /> <br />MEMORANDUM <br /> <br />Greg E. Walcher <br />Executive Director, DNR <br /> <br />PE!ter H. Evans <br />Director, eweB <br /> <br />TO: <br /> <br />Colorado Water Conservation Board Members /' / <br /> <br />\ /26 vvD <br />Bill Green, P.E., Water Supply Planning and Finance Section I-' <br />Mike Serlet, P.E., Chief, Water Supply Planning and Finance Section <br /> <br />FROM: <br /> <br />DATE: <br /> <br />November 15, 1999 <br /> <br />RE: <br /> <br />Agenda Item No. 12.a. - Water Supply Planning and Finance- <br />Financial Matters - Lending Rate Recommendations for 2000 <br /> <br />Introduction <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 2000. The procedures used here are identical to those used to develop the <br />lending rate structure for the last two years. <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 2, 1998 to October 25, 1999.1 <br />As the figure indicates, the average yield for Treasuries and municipals was 5.66 percent <br />and 5.42 percent, respectively, for the twelve-month period. <br /> <br />The lending rate policy adopted by the Board in November 1997 suggests that the <br />average yield for the 30-year municipal bond in the preceding twelve months (rounded to <br />the nearest one-quarter of one percent) be used directly as the Municipal High Income <br />lending rate. Based on the data for November 2, 1998 to October 25, 1999, that rate <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 />