This document provides a bond market update and analysis for general obligation bonds to fund the Lower Broadway Project in Alamo Heights, Texas. It includes comparisons of projected taxable versus tax-exempt debt service schedules, current municipal bond index rates, Treasury rates, and yield curves. It recommends that the City Council decide by early June 2021 whether to proceed with a taxable bond issuance in August/September 2021 or wait until August/September 2022 for a tax-exempt bond issuance, given that taxable rates currently result in lower projected debt service costs.

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Contacts
Bond Market Update for Lower Broadway Project
General Obligation Bonds
Anne Burger Entrekin
Regional Managing Director
anne.burgerentrekin@hilltopsecurities.com
70 Northeast Loop 410, Suite 710
San Antonio, Texas 78216
Direct: 210.308.2200
March 8, 2021 City of Alamo Heights, Texas
Michael Martin
Assistant Vice President
michael.martin@hilltopsecurities.com
1201 Elm Street, Suite 3500
Dallas, Texas 75270
Direct: 214.859.1731

2. Member FINRA / SIPC / NYSE
© 2021 Hilltop Securities Inc.
All Rights Reserved
Bond Buyer’s Index of 20 Municipal Bonds – 25 Years
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Bond Buyer’s Index of 20 Municipal Bonds – 1 Year
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MMD Yield Curve
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10-Year Constant Maturity Treasury
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Taxable MMD Yield Curve
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© 2021 Hilltop Securities Inc.
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Projected Taxable and Tax-Exempt Debt Service Comparison
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Comparison of
Projected Taxable
Debt Service to
Projected Tax-
FYE Principal Interest Total Principal Interest Total Exempt Debt Service FYE
2021 2021
2022 415,000
$ 419,513
$ 834,513
$ 590,000
$ 240,213
$ 830,213
$ (4,300)
$ 2022
2023 405,000 445,200 850,200 590,000 260,930 850,930 730 2023
2024 445,000 429,000 874,000 615,000 259,219 874,219 219 2024
2025 475,000 411,200 886,200 630,000 256,574 886,574 374 2025
2026 510,000 392,200 902,200 650,000 251,030 901,030 (1,170) 2026
2027 540,000 371,800 911,800 670,000 244,010 914,010 2,210 2027
2028 575,000 350,200 925,200 690,000 235,032 925,032 (168) 2028
2029 610,000 327,200 937,200 715,000 224,061 939,061 1,861 2029
2030 645,000 302,800 947,800 735,000 211,906 946,906 (894) 2030
2031 685,000 277,000 962,000 760,000 198,309 958,309 (3,692) 2031
2032 720,000 249,600 969,600 785,000 183,489 968,489 (1,112) 2032
2033 305,000 220,800 525,800 355,000 167,004 522,004 (3,797) 2033
2034 310,000 208,600 518,600 355,000 159,194 514,194 (4,407) 2034
2035 325,000 196,200 521,200 365,000 151,029 516,029 (5,172) 2035
2036 340,000 183,200 523,200 375,000 142,086 517,086 (6,114) 2036
2037 350,000 169,600 519,600 385,000 132,711 517,711 (1,889) 2037
2038 365,000 155,600 520,600 395,000 121,431 516,431 (4,170) 2038
2039 380,000 141,000 521,000 405,000 109,857 514,857 (6,143) 2039
2040 395,000 125,800 520,800 420,000 97,991 517,991 (2,810) 2040
2041 410,000 110,000 520,000 430,000 85,685 515,685 (4,316) 2041
2042 425,000 93,600 518,600 445,000 73,086 518,086 (515) 2042
2043 445,000 76,600 521,600 450,000 59,157 509,157 (12,443) 2043
2044 470,000 58,800 528,800 465,000 45,072 510,072 (18,728) 2044
2045 490,000 40,000 530,000 480,000 30,518 510,518 (19,483) 2044
2046 510,000 20,400 530,400 495,000 15,494 510,494 (19,907) 2045
11,545,000
$ 5,775,913
$ 17,320,913
$ 13,250,000
$ 3,955,081
$ 17,205,081
$ (115,831)
$
Notes:
(1) Assumes tax-exempt "AAA" Current Market Rates as of 3/01/2021 with NO INTEREST RATE CUSHION.
(2) Estimated closing date of September 15, 2021 with principal and interest payments on August 15 and February 15 of each year starting in 2022.
(3) Assumes taxable "AAA" Current Market Rates as of 3/01/2021 with NO INTEREST RATE CUSHION.
(4) Estimated closing date of September 15, 2021 with principal and interest payments on August 15 and February 15 of each year starting in 2022.
PRELIMINARY - for discussion purposes only.
$11,545,000
Projected General Obligation Bond Issue
(1)(2)
Series 2021 - Tax Exempt Scale
$13,250,000
Projected General Obligation Bond Issue
(3)(4)
Series 2021 - Taxable Scale

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© 2021 Hilltop Securities Inc.
All Rights Reserved
 Interest rates are still near historical lows
 Currently, projected taxable interest rates and debt service structure result in
lower debt service than projected tax-exempt interest rates and debt service
structure
 If the City Council is interested, we can continue to provide periodic updates
of the debt service comparison
 The decision is whether to proceed with a taxable bond issuance in
August/September of 2021 or wait until at least August/September of 2022
for a tax-exempt bond issuance
 Generally, the bond issuance process is initiated approximately 90
days prior to the bond issuance/closing
 It would be optimal to have a decision by early June of 2021
regarding the City Council’s decision on the bond issuance timing
and federal tax designation
Summary
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