Over the past twelve months alone, the swaption pay-out has increased by over $11 million. Council member Lamont McClure complained that the County will be "paying ransom to Wall Street" during a Finance Committee hearing the day before, when the swaption was only $25.2 million.
The County's financial advisers have given two costly options. First, be proactive and pay it off now, by refunding the remaining bonds. This will cost the County around $7 million in addition to the $25 million breakage fee. Second, let the Bank of America exercise the swaption, and float a $17-18 million letter of credit.
"There must be other options," claimed McClure, who suggested that Council seek a second opinion from its own financial adviser.
Council president John Cusick agreed, and has requested McClure to come back with a proposal.
