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20 <br /> COLLATERAL: In this type of County installment financing, the County secures its obligations to <br /> the bondholders by mortgage-type interest in some or all the property being acquired or improved <br /> through the financing. The County plans to secure this 2025 financing through a pledge of several <br /> County and school properties. County facilities expected to be included in the collateral package <br /> include the Whitted Building, the Orange County Library in Hillsborough, and Blackwood Farm <br /> Park. These are the same properties that the County has used for three previous Spring <br /> installment financings. <br /> County staff is working with both school boards to finalize the list of schools to be used as <br /> collateral. The following schools are expected to be used: Ephesus Elementary, Culbreth Middle <br /> (from Chapel Hill—Carrboro City schools), and (from the Orange County schools) Orange Middle, <br /> New Hope, Pathways, and Orange High. <br /> Bondholders generally require that the County offer collateral equal to at least 50% of the loan <br /> amount (for example, at least $5 million of collateral for a $10 million loan). The prospective <br /> collateral package has an approximate value of $160 million. The collateral package secures <br /> approximately$40 million of outstanding bonds. Adding the proposed $78 million financing takes <br /> the total amount secured to $118 million, which means the collateral package value will be <br /> approximately 136% of the outstanding amount. Using this level of collateral enhances the appeal <br /> of the County's securities to investors, provides flexibility to the County for future borrowings, and <br /> allows the County to release individual schools or County facilities from the collateral package if <br /> that becomes necessary. <br /> TARIFF ISSUE <br /> The municipal bond market has experienced volatility due to rising concerns over new tariffs and <br /> international trade tensions. These tariffs are causing uncertainty in the broader economy and <br /> leading a few investors to re-evaluate their investment strategies. This has resulted in short-term <br /> fluctuations in bond yields (interest rates). Staff is working with the County's financial advisors to <br /> ensure the County remains well positioned for a successful June bond issuance. The financing <br /> team will closely monitor this situation and will update accordingly if borrowing costs become a <br /> material concern. Recent North Carolina bond financings appear to indicate a return to stability. <br /> Gary Donaldson, Chief Finance Officer, made the following presentation: <br /> Slide #1 <br /> �-1 <br /> ORANGE COUNTY <br /> NORTH CAROLINA <br /> Series 2025 Limited Obligation Bonds <br /> Spring Final Financing Resolution <br /> Gary D—ld—,chief Fine !d IOffer <br /> May 20, 2025 <br />