Comprehensive Annual Financial Report - Metro Transit

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010the Series 2002 Bonds. (see below). The Series 2005 A Bonds were initially issued asweekly Variable Rate Demand Notes, with liquidity to the bondholders provided through adirect pay Letter of Credit (LOC) which expired on November 2, 2010. The initial rate onthe Series 2005A Bonds at closing was 2.65 percent. On August 1, 2006, to mitigateinterest rate risk, Metro converted $100 million of the Series 2005A Bonds to a rate of3.95% for a 38-month period ending October 1, 2009. On October 1, 2009, the $100million Series 2005 thus converted were remarketed as weekly Variable Rate DemandNotes. The Series 2005 Bonds were refunded with the Series 2010 Bonds (see below).Series 2007In December 2007, Metro issued $20.82 million in Mass Transit Sales Tax AppropriationRefunding Bonds (Series 2007) to advance refund the 2009 and 2010 principal paymentsof the Series 2002B Bonds, totaling $18.1 million. A Debt Service Reserve in the amountof $2.08 million was established at the time of the bond sale. The net proceeds of $18.49million were deposited in an irrevocable trust with an escrow agent to provide for thepayment of principal and interest of the aforementioned Series 2002B bonds. The Series2007 Bonds are expected to be paid from the revenues received by St. Louis County andthe City of St. Louis from a one-quarter cent mass transit sales tax annually appropriatedfor such purposes. The bonds bear interest at rates of 5.00 percent to 5.25 percent andmature in fiscal year 2034.As a result of the refunding, Metro increased its total debt service requirements by$29.31 million, which resulted in an economic loss of $3.21 million. As of June 30, 2011,all of the defeased debt had been retired.The bonds were collectively issued at a premium of $38,224 that is recorded in long-termdebt. The premium is being amortized as a reduction of interest expense. At June 30,2011 the unamortized premium was $32,925. Metro incurred and deferred $276,296 ofcosts related to the issuance of the bonds. At June 30, 2011, the remaining balance is$237,997.Long-term debt principal and interest maturities subject to mandatory redemption for thebonds are as follows:41