Collapse of Europe’s Dexia Bank Leads Everett Public Facilities District to Quickly Seek New Letter of Credit Provider

October 11, 2011

Everett, Everett Economy

Editor’s Note: The original story has been updated to reflect changes from “bond holder” to new “letter of credit provider” after clarification from the City of Everett.

Takeover of Dexia Bank leads Everett PFD to seek a new letter of credit provider.

In a special meeting Tuesday morning the Everett Public Facilities District, owner of Comcast Arena Everett, voted unanimously to retain an independent bond council and conduct a bond review to find a new bank to provide a standby letter of credit for its variable interest bonds. In 2007, the PFD Board financed 27 million dollars in variable interest bonds with Dexia and enjoyed very favorable rates. Things began to change this year as Dexia got into financial trouble due to the financial crisis in Greece and an interest rate that was .65 percent in May has risen to 2.75 percent and is resetting daily. Jane Towery, a representative from Piper Jaffray, told the Public Facilities Board this morning, “I am nervous.” when talking about both the stability of Dexia and how much further the interest rate may rise. Towery told the board they could save as much as $400,000.00 per year by securing a new letter of credit for the variable bonds with a different financial institution. The Board then passed a motion to pursue a bond review. The process could take anywhere from 6 – 9 weeks.

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My Everett News is a hyperlocal news website featuring breaking news and events in Everett, WA. We also cover City of Everett information and items of interest to those who live and work in Everett. It's written by Leland Dart a former Snohomish County based radio reporter born and raised in Everett.

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