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Planning for a Successful Bond Measure Fountain Valley School District Board Study Session July 28, 2016
Charles Heath, Partner
The Bond Planning Process
The Bond Planning Process
à Poll à Election timing à Tax rate à Projects
à Political landscape à Competing issues à Potential controversy
The Bond Planning Process
à Inform and engage internal school community à Parents à Teachers à Staff à PTAs
à Inform and engage external community à Elected leaders à Business leaders à Faith community à Ethnic leaders
The Bond Planning Process
à Resolution calling election à Ballot question à Project list à Tax rate statement à Board vote
The Bond Planning Process
à Phone banks à Precinct walks à Website à Social Media
à Private fundraising à Lawn signs à Direct mail à Endorsements
The Bond Planning Process
à Ensure strong parent participation à Remind supporters to vote all the way
down the ballot
UnlikelyVoters15%
LikelyVoters85%
FVSDRegisteredVoters: 30,801ExpectedVoterTurnout: 26,107(85%)VotesNeededtoWin: 14,359(15%)
November2016BondTimeline
FVSD Voter Summary
Next Steps - July • Prepare messaging documents (fact sheet, talking points, FAQ, web
content, outreach presentation, etc.) about facilities needs and potential bond measure
• Identify key external stakeholders (elected officials, business leaders, civic organizations, service clubs, ethnic community leaders, senior organizations and others) for outreach meetings/presentations and begin scheduling meetings
• Draft resolution and ballot language and review with OC Taxpayers Association for approval
• Send informational mailer to all registered voters and parents in the district about facilities needs and potential bond measure
• Send Superintendent’s Update email blast to all parents and staff in the district about facilities needs and potential bond measure
Next Steps - August • Edit and finalize resolution and ballot language
• August 11: Target Board Meeting date for Board of Trustees to vote to place bond measure on November 8, 2016 ballot
• August 12 (88 Days Before Date of Election): Deadline to file resolution with Orange County Registrar of Voters placing measure on the ballot
• August 15: Ballot designation assigned by Orange County Registrar of Voters for local ballot measures
• Update messaging documents (fact sheet, talking points, FAQ, web content, etc.) to reflect Board action to place measure on ballot and measure letter assignment
Next Steps – August (cont.) • Draft 300 word Official Argument in Favor of bond measure and seek five
signers with titles
• August 19: Deadline to file Official Argument in Favor of bond measure with five signers to Orange County Registrar of Voters
• If opposition group filed an Argument Against the bond measure, draft 250 word Rebuttal to the Argument Against and seek five additional signers with titles
• August 22: Target date to send second informational mailer to all registered voters and parents in the district about bond measure on November ballot
• August 22: Target date to send Superintendent’s Update email blast to all parents and staff in the district about bond measure on November ballot
• August 26: Deadline to file Rebuttal to the Argument Against the bond measure with five signers to Orange County Registrar of Voters
Next Steps - September • Finalize talking points, FAQ and guidelines for teacher and staff
involvement in bond measure process for distribution at back to school staff development meetings
• Finalize bond measure informational fact sheet to be included in student registration/back to school packets
• September 7: Distribute bond measure informational fact sheet to school sites to send home with students on first day of school
• Finalize talking points for informational talking points for principals for use at Back to School Nights and provide informational fact sheets to be distributed at Back to School Nights
• Make informational presentations at first meetings of school year for teachers association, CSEA, PTA Council, individual PTAs and any other parent groups or organizations
• Transition to independent advocacy campaign
Fountain Valley School District - Page 1 © 2016 Government Financial Strategies
CLICK TO EDIT MASTER TITLE STYLE
Government Financial Strategies
Presented by Lori Raineri and Keith Weaver July 28, 2016
Fountain Valley School District
Board Workshop:Feasibility of a Local Bond Measure - Update on General Obligation Bond Measure Financial Plan
Presentation materials provided for distribution at the meeting. Please see meeting record for verbal commentary and discussion.
Fountain Valley School District - Page 2 © 2016 Government Financial Strategies
Bond Basicsu A bond is a loan.
u Just like a home mortgage, a bond allows the taxpayers to buy and receive the benefit of the facilities now, and pay for them over time.
Bond Proceeds
Facilities Improvements Bond
Repayment
Community Benefit
Fountain Valley School District - Page 3 © 2016 Government Financial Strategies
Bond Market Update: Interest Rates ê
-11.0%
-10.0%
-9.0%
-8.0%
-7.0%
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
Jan-05-84 Apr-24-86 Aug-11-88 Nov-29-90 Mar-18-93 Jul-06-95 Oct-23-97 Feb-10-00 May-30-02 Sep-16-04 Jan-04-07 Apr-23-09 Aug-11-11 Nov-26-13 Mar-17-16
Rate Differential Interest Rate
Date
Until Recently, The Interest Rate On Tax-Exempt 20 Year Municipal Bonds Was Almost Always Lower Than The Rate On Taxable 30 Year U.S. Treasury Bonds
Differential Between Bond Buyer and U. S. Treasuries
Bond Buyer 20-Year Municipal Index 2.87% as of July 21, 2016
The 20-Bond Index consists of 20 general obligation bonds that mature in 20 years. The average rating of the 20 bonds is roughly equivalent to Moody's Investors Service's Aa2 rating and Standard & Poor's Rating Service AA. The 30 Year Treasury bond yield is as quoted by The Bond Buyer.
Market uncertainty led to a dramatically atypical relationship between municipal rates, as represented by the Bond Buyer 20-Bond Index, and 30-year U.S. Treasury rates. The market
returned to a more traditional relationship before reverting back to an atypical condition.
30-Year U.S. Treasury Rate 2.29% as of July 21, 2016
Fountain Valley School District - Page 4 © 2016 Government Financial Strategies
Tax Levy Amounts Tested in Survey
*note: tax levy is expressed in terms of $ per $100,000 of assessed value.
Estimated PotentialTax Levy* Bond Amount Facilities Projects
$30 $59 million Air Conditioning Bundle
$27 $53 million
$24 $37 million
Fountain Valley School District - Page 5 © 2016 Government Financial Strategies
Tax Levy Amounts Tested in Survey
*note: tax levy is expressed in terms of $ per $100,000 of assessed value.
Estimated PotentialTax Levy* Bond Amount Facilities Projects
$30 $59 million Air Conditioning Bundle
$27 $53 million
$24 $37 million
Fountain Valley School District - Page 6 © 2016 Government Financial Strategies
Projected Tax Levies ≤ $30 / $100,000 AV
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046
Total G.O. Bond Tax Levy
Fiscal Year Beginning July 1
Tax Levies for a New Bond Measure are Projected Just Below the Maximum Allowable Projection of $30 per $100,000 of Assessed Value for a 55% Voter Approval Measure
Projected Tax Levies per $100,000 of AV
Maximum:
Average:
Minimum:
$29.99
$29.90
$29.69
Maximum allowable projected tax levy: $30.00
Fountain Valley School District - Page 7 © 2016 Government Financial Strategies
G.O. Bond Tax Rates
u Bond tax rate ≈ debt service ÷ assessed value u Each property in the District pays its pro rata share, based
on its individual assessed value (not market value)
Fountain Valley School District - Page 8 © 2016 Government Financial Strategies
Historical Assessed Value
8.23%
2.85%
8.63%
8.19%
9.22%
8.46% 1.01% 1.19% 3.70%
1.46% 2.03%
6.19%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
$0
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
$7,000,000,000
$8,000,000,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Annual AV Inflation Factor
Local Secured AV
Fiscal Year Beg. July 1
Net Local Secured Assessed Value Has Averaged Just Over 5.0% Annual Growth Over the Last 13 Years
Annual CA AV Inflation Factor - CCPI
Annual CA AV Inflation Factor - 2%
Note: Assessed values provided by Orange County Auditor-Controller's Department. Local secured AV represents 97% of total AV and has the lowest volatiility and therefore most predicability amongst AV categories. Prop 13 inflation adjustment per State Board of Equalization.
5.05%
Local secured AV
Fountain Valley School District - Page 9 © 2016 Government Financial Strategies
Stable Tax Rate à Payments Grow w/Proj. AV
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$0
$3,000,000,000
$6,000,000,000
$9,000,000,000
$12,000,000,000
$15,000,000,000
$18,000,000,000
$21,000,000,000
2016 2019 2022 2025 2028 2031 2034 2037 2040 2043 2046
Bond Debt Service
Total AV
Fiscal Year Beginning July 1
5 Year Plan: Bonds are Issued in 3 Series Over 5 Years, Debt Service has 25 Year Terms, and Expected to be Repaid by a Tax Base that Increases Over Time
Local secured AV is assumed to grow 3% annually beginning in
FY 2016-17
Series 2017 Repayment Current Interest Bonds
Series 2019 Repayment Current Interest Bonds
Series 2021 Repayment Current Interest Bonds
Note: Local secured AV is assumed to grow 3% annually beginning in FY 2016-17 while all other types of AV are assumed to remain unchanged from the FY 2015-16 level.
Fountain Valley School District - Page 10 © 2016 Government Financial Strategies
$59.3 Mil. Nets $57.9 Mil. For Projects
$19,800,000 $19,800,000 $19,700,000
$59,300,000
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
Series 2017 Series 2019 Series 2021 Total
G.O. Bonds Proceeds
Year Beginning July 1
Over 5 Years, it's Estimated the District can Issue $59.3 Million of Bonds, and Receive $57.9 Million for Facilities Projects
Note: upfront costs include underwriter's discount and costs of issuance (financial advisor, bond counsel, credit rating agency, etc.).
Bond Proceeds Analysis Using Conservative Assumptions
Series 2017 Series 2019 Series 2021 TotalBond Issuance Amount $19,800,000 $19,800,000 $19,700,000 $59,300,000Underwriter's Discount ($350,000) ($350,000) ($340,000) ($1,040,000)
Bond Insurance $0 $0 $0 $0Other Costs ($125,000) ($125,000) ($125,000) ($375,000)
Cash for Projects $19,325,000 $19,325,000 $19,235,000 $57,885,000
Fountain Valley School District - Page 11 © 2016 Government Financial Strategies
Potential $63 Million Bond Measure
u The survey tested a bond amount of up to $63 million because our facilities need are greater than what a conservative plan can attain:
▶ If the tax base grows faster than assumed (3% annually), we
could sell more than $59 million of bonds (up to $63 million). ▶ The bond plan is conservative so that the community can
have confidence in what can be accomplished.
▶ This provides the opportunity to take advance of any upside that a better-reality-than-assumed can give us.
Fountain Valley School District - Page 12 © 2016 Government Financial Strategies
Local Property Tax
Source: Orange County Treasurer-Tax Collector Shari L. Friedenrich
u School districts levy: ▶ No income tax ▶ No sales tax ▶ No hotel tax ▶ No gas tax ▶ And receive less
than half of the general property tax.
WHERE THE TYPICAL COUNTY OF ORANGE PROPERTY TAX DOLLAR WENT IN FY 2015/2016*…
*The above dollar takes into account the swaps the State has done for property tax, such as Triple Flip and VLF.
Fountain Valley School District - Page 13 © 2016 Government Financial Strategies
Ad Valorem Taxes ≈ $1.06 Per $100 of Assessed Value
u Sample Tax Bill at approximately the median single family residential assessed value ($326,215)
u Ad Valorem Taxes = $1.06002 per $100 of Assessed Value ▶ In this case, ad valorem
taxes of $3,457.94 + assessments of $340.02 for a total of $3,797.96
Fountain Valley School District - Page 14 © 2016 Government Financial Strategies
Properties are Mostly SF Residential
SFR, $5,822,423,736 , 79%
MFR, $297,436,251 , 4%
Commercial, $1,097,768,922 , 15%
Industrial, $186,337,458 , 2%
Misc, $6,701,268 , 0%
Mobile Homes, $71,441 , 0%
Rural, $57,824 , 0%
Exempt, $0 , 0%
79% of AV in District is SFR
Note: 2015-16 secured assessment roll as provided by Orange County Assessor's office. Percentages rounded.
SFR; 16216 parcels; 96%
MFR; 174 parcels; 1%
Commercial; 271 parcels; 2%
Industrial; 85 parcels; 0%
Misc; 3 parcels; 0%
Mobile Homes; 12 parcels; 0%
Rural; 3 parcels; 0%
Exempt; 142 parcels; 1%
96% of District Parcels are SFR
Note: 2015-16 secured assessment roll as provided by Orange County Assessor's office. Percentages rounded.
Fountain Valley School District - Page 15 © 2016 Government Financial Strategies
Top 20 Taxpaying Properties
Top 20 Parcels; $843,593,312 ; 11%
Excluding Top 20 Parcels; $6,567,203,588 ; 89%
Top 20 Taxpayers Comprise 11% of Total District AV
Note: 2015-16 secured assessment roll as provided by Orange County Assessor's office. Percentages rounded.
Top 20 Taxpayers by Billing Address
% of # of Owner/MailingMailing Address Net Value Owners District's AV Parcels Location
PO BOX 20850 FOUNTAIN VALLEY, CA $188,098,303 HYUNDAI MOTOR AMERICA 2.5% 1 Orange Co925 E MEADOW DR PALO ALTO, CA $107,651,615 BEXAEW THE HAVENS LP 1.5% 2 California2801 ATLANTIC AVE LONG BEACH, CA $77,967,313 ORANGE COAST MEMORIAL 1.1% 1 CaliforniaATTN RICK GRANIERE CHIEF FINANCIAL OFFICER 17360 BROOKHURST ST FOUNTAIN VALLEY, CA $68,332,285 MEMORIAL HEALTH SERVICES 0.9% 1 Orange CoC/O PARADIGM TAX GROUP 5694 MISSION CENTER RD, STE 602-800 SAN DIEGO, CA $61,513,559 VERMEULEN PROPERTIES 6 0.8% 8 CaliforniaC/O SIERRA CORPORATE MGNT 320 N PARK VISTA ST ANAHEIM, CA $35,577,916 FOUNTAIN VALLEY MHP ASSOC 0.5% 1 Orange CoC/O SHEA PROPERTIES LLC 655 BREA CANYON RD WALNUT, CA $33,079,829 SHEA CENTER CORTE BELLA 0.4% 2 California702 SW 8TH ST BENTONVILLE, AR $29,432,231 MTSC-LAKE ELSINORE 0.4% 1 Out of State17199 SAN MATEO ST FOUNTAIN VALLEY, CA $28,489,234 SHEA CENTER CRYSTAL 0.4% 1 Orange Co48 PARK RD BURLINGAME, CA $24,446,136 CARMEL VILLAGE PARTNERS 0.3% 1 CaliforniaC/O ADVANCED REAL ESTATE SVC 15320 BARRANCA PKWY, STE 100 $23,405,583 ADVANCED GROUP 09-98 0.3% 79 Orange CoC/O LEASE ADM DEPT 2200 OLD GERMANTOWN RD DELRAY BEACH, FL $22,666,128 GLUCKSTEIN FOUNTAIN 0.3% 1 Out of StatePO BOX 57088 IRVINE, CA $22,187,778 TRI POINTE HOMES INC 0.3% 2 Orange CoC/O SORK, MARK P 13 CORPORATE PLAZA DR, STE 214 NEWPORT BEACH, CA $21,779,138 TOWNE HOUSE PLAZA 0.3% 1 Orange CoATTN GARY KAESTNER 1010 E CHESTNUT SANTA ANA, CA $17,695,681 GRANDE APARTMENTS LP 0.2% 1 Orange CoC/O PACIFIC WEST ASSET MGNT CORPORATION 3191 AIRPORT LOOP DR #D COSTA MESA, CA $17,074,869 FV SHOWROOM PARTNERS I 0.2% 5 Orange CoC/O WESTERN REALTY 2760 E SPRING ST STE 200 LONG BEACH, CA $16,613,510 BROOKHURST & ADAMS LLC 0.2% 1 CaliforniaATTN SEAN MC COY 4010 W CHANDLER ST SANTA ANA, CA $16,531,913 SUKUT REAL PROPERTIES 0.2% 7 Orange Co20201 SW BIRCH ST, STE 100 NEWPORT BEACH, CA $15,557,773 TRI POINTE HOMES INC 0.2% 38 Orange Co9920 TALBERT AVE FOUNTAIN VALLEY, CA $15,492,518 ORANGE COAST MEMORIAL 0.2% 2 Orange Co
$843,593,312 11.4% 156
Fountain Valley School District - Page 16 © 2016 Government Financial Strategies
Return on Investment
THE VALUE OF SCHOOL FACILITY INVESTMENTS:EVIDENCE FROM A DYNAMIC REGRESSION
DISCONTINUITY DESIGN∗
STEPHANIE RIEGG CELLINI
FERNANDO FERREIRA
JESSE ROTHSTEIN
Despite extensive public infrastructure spending, surprisingly little is knownabout its economic return. In this paper, we estimate the value of school facilityinvestments using housing markets: standard models of local public goods implythat school districts should spend up to the point where marginal increases wouldhave zero effect on local housing prices. Our research design isolates exogenousvariation in investments by comparing school districts where referenda on bondissues targeted to fund capital expenditures passed and failed by narrow mar-gins. We extend this traditional regression discontinuity approach to identify thedynamic treatment effects of bond authorization on local housing prices, studentachievement, and district composition. Our results indicate that California schooldistricts underinvest in school facilities: passing a referendum causes immedi-ate, sizable increases in home prices, implying a willingness to pay on the partof marginal homebuyers of $1.50 or more for each $1 of capital spending. Theseeffects do not appear to be driven by changes in the income or racial composition ofhomeowners, and the impact on test scores appears to explain only a small portionof the total housing price effect.
I. INTRODUCTION
Federal, state, and local governments invest more than $420billion in infrastructure projects every year, and the AmericanRecovery and Reinvestment Act of 2009 is funding substantialtemporary increases in capital spending.1 School facilities may beamong the most important public infrastructure investments: $50billion is spent on public school construction and repairs each year
∗We thank Janet Currie, Joseph Gyourko, Larry Katz, David Lee, Chris Mayer,Tom Romer, Cecilia Rouse, Tony Yezer, and anonymous referees, as well as seminarparticipants at Brown; Chicago GSB; Duke; George Washington; Haas School ofPublic Policy; IIES; University of Oslo; NHH; Penn; Princeton; UMBC; Wharton;Yale; and conferences of the American Education Finance Association, NationalTax Association, NBER (Labor Economics and Public Economics), and SouthernEconomic Association for helpful comments and suggestions. We are also gratefulto Eric Brunner for providing data on California educational foundations. Fer-nando Ferreira would like to thank the Research Sponsor Program of the Zell/LurieReal Estate Center at Wharton for financial support. Jesse Rothstein thanks thePrinceton University Industrial Relations Section and Center for Economic PolicyStudies. We also thank Igar Fuki, Scott Mildrum, Francisco Perez Arce, MichelaTincani, and Moises Yi for excellent research assistance. [email protected],[email protected], [email protected].
1. Council of Economic Advisers (2009, Table B-20). The annual total includesgross investment in structures, equipment, and software for both military andnonmilitary uses.C⃝ 2010 by the President and Fellows of Harvard College and the Massachusetts Institute ofTechnology.The Quarterly Journal of Economics, February 2010
215
Fountain Valley School District - Page 17 © 2016 Government Financial Strategies
For Reference re: Assumptions
u A.V. Assumptions
▶ Historical Tests
▶ Reasons Assessed Value Can Change
u Interest Rate Assumptions
Fountain Valley School District - Page 18 © 2016 Government Financial Strategies
Historical AV Analysis - 3 Year Periods
8.41% 8.71% 8.84%
4.67%
1.10%
2.44% 2.57%
1.74% 2.44%
5.50%
7.21%
3.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
2003 - 2005
2004 - 2006
2005 - 2007
2006 - 2008
2007 - 2009
2008 - 2010
2009 - 2011
2010 - 2012
2011 - 2013
2012 - 2014
2013 - 2015
2015 - 2017
Compound Annual Growth Rate
Date Range
AV Assumption is a Reasonable Annual Growth Rate over 3 Years
Historical data from Orange County Auditor-Controller's office. Local secured AV is assumed to increase 3% annually, while all other AV types are assumed to remain unchanged.
Over 3 year periods since FY 2003-04, the AV assumption was exceeded just over half the time (6 out of 11 periods).
Fountain Valley School District - Page 19 © 2016 Government Financial Strategies
Historical AV Analysis - 5 Year Periods
8.63%
6.67%
4.90%
3.55%
1.84% 2.09% 2.50%
3.61% 4.79%
3.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
2003 - 2007
2004 - 2008
2005 - 2009
2006 - 2010
2007 - 2011
2008 - 2012
2009 - 2013
2010 - 2014
2011 - 2015
2015 - 2019
Compound Annual Growth Rate
Date Range
AV Assumption is a More Conservative Annual Growth Rate over 5 Years
Historical data from Orange County Auditor-Controller's office. Local secured AV is assumed to increase 3% annually, while all other AV types are assumed to remain unchanged.
Over 5 year periods since FY 2003-04, the AV assumption was exceeded two-thirds of the time (6 out of 9 periods).
Fountain Valley School District - Page 20 © 2016 Government Financial Strategies
Historical AV Analysis - 10 Year Periods
4.82% 4.19% 4.19%
3.87% 3.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
2003 - 2012 2004 - 2013 2005 - 2014 2006 - 2015 2015 - 2024
Compound Annual Growth Rate
Date Range
AV Assumption is a Conservative Annual Growth Rate over 10 Years
Historical data from Orange County Auditor-Controller's office. Local secured AV is assumed to increase 3% annually, while all other AV types are assumed to remain unchanged.
Over 10 year periods since FY 2003-04, the AV assumption was exceeded all of the time (4 out of 4 periods).
Fountain Valley School District - Page 21 © 2016 Government Financial Strategies
Reasons Assessed Value Can Changeu Pursuant to Proposition 13 (and embodied in Article 13A of the
California Constitution), a school district’s property tax base can change for four reasons: ▶ Properties are sold (and reassessed at the sale price). ▶ Properties are improved (and reassessed with the value of
the improvement). ▶ A year passes (each property’s assessed value increases by
the lesser of 2% or the change in the California Consumer Price Index).
▶ Market value of one or more properties declines below assessed value - assessed value can be adjusted downward to the market value. If market value subsequently increases, assessed value can “catch up” to pre-decline AV plus allowable adjustments (e.g. 2% annual increase).
Fountain Valley School District - Page 22 © 2016 Government Financial Strategies
Plan Assumes that Interest Rates é
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Interest Rate
Bond Term to Maturity
Interest Rate Assumptions are Based on a Market Index, Adjusted for the District's Credit Rating and for the Planned Timing of the Bond Issuances
Series 2021 CIBs
Series 2019 CIBs
Series 2017 CIBs
Credit Adjusted Rates
MMM "AAA" Rate Index
Notes: market index for "AAA" credit based on the Municipal Market Data (MMD) scale as of April 29, 2016. Assumed "AA-" credit rating based on most recent District rating of "A+" on 2004 COPs (most recently affirmed in 2006). Credit adjustment based on review of GO bonds with same "AA-" credit rating. The 20-Bond Index is the average yield on the 20th year maturity for 20 general obligation bonds with average rating equivalent to Moody's Investors Service's "Aa2" and Standard & Poor's Rating Service "AA". The Index is weekly as of each Thursday. Historical volatility based on 20-Bond Index over same timeframe, January 1, 1984 until May 5, 2016.
Credit Adjustment for an Assumed "AA-" Credit Rating:
+ 0.70%
Market Index for "AAA" Credit
Timing Adjustment for 1 Year: + 1.00%
Historical Volatility
94.6%
94.2%
93.4%
Interest rate adjustments for the timing of bond issuances based on historical volatility exceeding 90% (where at least 90% of the time, interest rate volatility was within the stated assumption).