Texas Government Code - GOV'T § 1204.004. Computation of Net Interest Cost

(1) “Discount” means an amount equal to the principal amount at par value of an issue or series of public securities plus any accrued interest to the date of delivery minus the total sum of money paid to the public agency.

(2) “Premium” means an amount equal to the total amount of money paid to the public agency for an issue or series of public securities minus:

(1) plus, in the case of a discount, the figure obtained by multiplying the dollar amount of the discount by a fraction, the numerator of which is the aggregate number of public security years to the date of the net interest cost computation and the denominator of which is the aggregate number of public security years to the scheduled final maturity date of the floating rate public securities;  or

(2) minus, in the case of a premium, the figure obtained by multiplying the dollar amount of the premium by a fraction, the numerator of which is the aggregate number of public security years to the date of the net interest cost computation and the denominator of which is the aggregate number of public security years to the scheduled final maturity date of the floating rate public securities.

(1) the net interest cost is computed as if the face amount of public securities required to be redeemed on each earlier date were scheduled to mature on that earlier date;

(2) the net interest cost includes any redemption premium required to be paid on any mandatory redemption date;  and

(3) any other form of compensation, whether due on an optional or mandatory prepayment or redemption, may not be included in the net interest cost.