Capital Debt Affordability Committee
Transcript of Capital Debt Affordability Committee
Capital Debt Affordability Committee Treasurer Nancy K. Kopp, Chair
Agenda
October 18, 2021
1:00 PM
1) Treasurer’s Opening Comments
2) Affordability Analysis
Christian Lund, Director of Debt Management, State Treasurer’s Office
3) Committee Discussion and Voting Session on the 2021 Capital Debt
Affordability Committee Recommendations
▪ General Obligation Bond Authorization and Planning Assumptions:
Recommendation of the amount of new State debt that may prudently be
authorized for fiscal year 2023, and planning assumptions for the total amount
of new State debt for future fiscal years.
▪ Academic Facilities Bonds Authorization:
Recommendation of the amount of new bonds for academic facilities for fiscal
year 2023 by the University System of Maryland, Morgan State University,
St. Mary’s College of Maryland and the Baltimore City Community College.
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2021 Affordability Analysis
Capital Debt Affordability Committee
Presented by
Christian Lund, Director of Debt Management
Maryland State Treasurer’s Office
October 18, 2021
CDAC Authorization Scenarios($ in millions)
Scenario 1:
Governor’s Capital
Program
Scenario 2:
Traditional
CDAC*
Scenario 3:
Accelerated Capital
Program
FY Authorization Authorization Authorization
2022 (actual) 1,105 1,105 1,105
2023 1,115 1,470 2,500
2024 1,125 1,515 2,500
2025 1,135 1,560 1,135
2026 1,145 1,605 1,145
2027 1,155 1,655 1,155
2028 1,165 1,705 1,165
2029 1,175 1,755 1,175
2030 1,185 1,810 1,185
2031 1,195 1,865 1,1952
*The Traditional CDAC scenario was developed by calculating what authorizations would be in FY23 if the traditional practice of 3% annual growth had
been maintained. It then continues 3% annual growth into the out years.
Ten-Year Tax-Exempt Bond Rates* and
Ten-Year Breakeven Inflation Rate**
(2003 – Present)
3
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
10 year mmd 10 year breakeven
*Royal Bank of Canada Capital Markets (https://www.rbccm.com/assets/rbccm/docs/muni-finance-
updates/2021_09_30_RBCCMMunicipalMarketsDaily.pdf)
**Federal Reserve Bank of St. Louis (https://fred.stlouisfed.org/series/T10YIE)
Benchmarks:
Governor’s Capital Plan
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All $ millions. Estimates as of 10/15/2021. Tentative and subject to change. Assumptions are conservative, including all 5% coupons, no refundings, and no bond premium after FY23.
1,105 1,115 1,125 1,135 1,145 1,155 1,165 1,175 1,185 1,195
6.98% 7.06%6.87% 6.83%
6.56% 6.57% 6.42% 6.28% 6.11%5.77%
3.31% 3.17% 3.07% 2.92% 2.81% 2.70% 2.52% 2.40% 2.29% 2.19%
-
500
1,000
1,500
2,000
2,500
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
Authorizations
Debt Service as a Percentage of Revenues
Debt Outstanding as a Percentage of Personal Income
Benchmarks:
Traditional CDAC
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1,105 1,470 1,515 1,560 1,605 1,655 1,705 1,755 1,810 1,865
6.98% 7.07% 6.90% 6.89%6.69% 6.80% 6.76% 6.75% 6.70%
6.49%
3.31% 3.19% 3.13% 3.05% 3.00% 2.97% 2.86% 2.81% 2.76% 2.71%
-
500
1,000
1,500
2,000
2,500
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
Authorizations
Debt Service as a Percentage of Revenues
Debt Outstanding as a Percentage of Personal Income
All $ millions. Estimates as of 10/15/2021. Tentative and subject to change. Assumptions are conservative, including all 5% coupons, no refundings, and no bond premium after FY23.
Benchmarks:
Accelerated Capital Plan
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1,105 2,500 2,500 1,135 1,145 1,155 1,165 1,175 1,185 1,195
6.98% 7.08% 6.98% 7.05% 6.95%7.15% 7.13% 7.06% 6.91%
6.56%
3.31% 3.26% 3.33% 3.30% 3.26% 3.18%2.99% 2.82% 2.66% 2.52%
-
500
1,000
1,500
2,000
2,500
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
Authorizations
Debt Service as a Percentage of Revenues
Debt Outstanding as a Percentage of Personal Income
All $ millions. Estimates as of 10/15/2021. Tentative and subject to change. Assumptions are conservative, including all 5% coupons, no refundings, and no bond premium after FY23.
Debt Service Projection:
Governor’s Capital Plan
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$260.0 $318.7 $506.2 $522.9 $492.0 $504.9 $494.6 $484.4 $478.1 $464.1
$1,119.1 $1,107.6
$954.3 $976.0 $1,000.9 $1,029.1 $1,059.3 $1,090.7 $1,123.4 $1,157.0
$-
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
$1,600.0
$1,800.0
$2,000.0
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
General Funds Special and Federal Funds
All $ millions. Estimates as of 10/15/2021. Tentative and subject to change. Assumptions are conservative, including all 5% coupons, no refundings, and no bond premium after FY23.
Debt Service Projection:
Traditional CDAC
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$260.0 $320.1 $514.3 $542.6 $533.8 $578.3 $607.4 $643.0 $688.0 $729.6
$1,119.1 $1,107.6
$954.3 $976.0 $1,000.9 $1,029.1
$1,059.3 $1,090.7
$1,123.4 $1,157.0
$-
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
$1,600.0
$1,800.0
$2,000.0
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
General Funds Special and Federal Funds
All $ millions. Estimates as of 10/15/2021. Tentative and subject to change. Assumptions are conservative, including all 5% coupons, no refundings, and no bond premium after FY23.
Debt Service Projection:
Accelerated Capital Plan
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$260.0 $324.1
$537.6 $591.0 $613.2 $691.6 $729.5 $750.8 $762.9 $755.8
$1,119.1 $1,107.6
$954.3 $976.0 $1,000.9
$1,029.1 $1,059.3 $1,090.7 $1,123.4 $1,157.0
$-
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
$1,600.0
$1,800.0
$2,000.0
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
General Funds Special and Federal Funds
All $ millions. Estimates as of 10/15/2021. Tentative and subject to change. Assumptions are conservative, including all 5% coupons, no refundings, and no bond premium after FY23.
CDAC General Obligation
Bond Authorization
• CDAC needs to vote on its recommendation for a
General Obligation Bond authorization for FY 2023.
• CDAC only votes on the upcoming fiscal year’s
authorization (FY 2023). Assumed authorizations for FY
2024 – 2027 are for planning purposes only and subject
to change.
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Recommendation of Amount of New Bonds for
Academic Facilities for Fiscal Year 2023
Amount of new bonds for academic facilities for fiscal year
2023 requested by institution:
University System of Maryland: $30.0 million
Morgan State University: $0.0
Baltimore City Community College: $0.0
St. Mary’s College of Maryland: $0.0
Total Requested $30.0 million
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