2014 Bond Preview and Market Conditions
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2014 Bond Preview and Market Conditions Presentation Transcript

  • 1. Contacts July 24, 2014 City of College Station, Texas Drew Masterson Managing Director 700 Milam Street, Suite 500 Houston, Texas 77002 713.654.8654 drew.masterson@firstsw.com 2014 Bond Preview and Market Conditions Kristin Garcia Blomquist Associate 700 Milam Street, Suite 500 Houston, Texas 77002 713.654.8675 kristin.blomquist@firstsw.com Christine Crotwell Assistant Vice President 700 Milam Street, Suite 500 Houston, Texas 77002 713.654.8636 christine.crotwell@firstsw.com
  • 2. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION Summary of Preliminary Numbers 3 Over the past month, the municipal has been volatile but has ultimately moved in our favor. Rates decreased roughly 12 basis points since our last set of preliminary numbers. Par Amount All-in TIC Average Debt Service GO New Money………………………………………………………12,025,000$ 3.467% 947,635$ GO Refunding………………………………………………………23,025,000 2.500% 2,491,540 Total GO and Refunding Bonds……………………………..35,050,000$ 3.000% 3,439,175$ Total Certificates………………………………………………………34,015,000$ 3.341% 2,580,765$ Par Amount All-in TIC Average Debt Service GO New Money………………………………………………………12,190,000$ 3.602% 958,699$ GO Refunding………………………………………………………20,435,000 2.677% 2,257,209 Total GO and Refunding Bonds……………………………..32,625,000$ 3.127% 3,215,908$ Total Certificates………………………………………………………34,485,000$ 3.479% 2,609,652$ Preliminary Statistics - Rates as of June 12, 2014 Preliminary Statistics - Rates as of July 22, 2014
  • 3. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION Summary of Refunding Statistics 4 6/12/2014 7/22/2014 Refunding Par Amount…………………………………………………………………..20,435,000$ 23,055,000$ Gross Savings (2015-2026)…………………………………………………………………..2,591,859$ 2,857,505$ Net Present Value (NPV) Savings…………………………………………………………………..2,158,950$ 2,437,431$ Average Annual Savings (2015-2026)…………………………………………………………………..129,593$ 142,875$ Net PV Savings as a % of Refunded Bonds…………………………………………………………………..9.52% 9.51% All-in True Interest Cost…………………………………………………………………..2.677% 2.500% Average Coupon of Refunded Bonds………………………… 4.927% 4.622% Negative Arbitrage…………………………………………………………………..218,428$ 221,339$ Negative Arbitrage as % of NPV Savings………………………..10.117% 9.081% GO Refunding Statistics
  • 4. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION Summary of Proposed Refunded Bonds 5 Principal Amount Maturities Interest Series to be Refunded* Refunded Call Date Rates Certificates of Obligation, Series 2006 4,660,000$ 2016-2026 2/15/2015 4.375%-4.750% General Obligation Improvement Bonds, Series 2006 4,600,000 2016-2026 2/15/2015 4.375%-4.750% Total General Obligation Debt to be Refunded 9,260,000$ Principal Amount Maturities Interest Series to be Refunded* Refunded Call Date Rates Utility System Revenue Refunding Bonds, Series 2005A 4,830,000$ 2015-2018 9/11/2014 4.000%-5.250% Utility System Revenue Bonds, Series 2006 11,535,000 2016-2026 2/1/2015 4.375%-4.750% Total Utility System Revenue Debt to be Refunded 16,365,000$ Total Outstanding Debt to be Refunded 25,625,000$ Average Rate: 4.622% General Obligation Refunding Candidates Utility System Refunding Candidates
  • 5. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION Timeline 6 Completion Date Event Responsibility Thu - Jun 12  City Council Meeting: Authorize Publication of Notice of Intent for Certificates FWG Thu - Jun 19  Publish First Notice of Intent for Certificates BC Thu - Jun 26  Publish Second Notice of Intent for Certificates BC Thu - Jul 3  Distribute Underwriter RFP FA Week of July 14  Rating Calls FWG Thu - Jul 17  Underwriter RFP Responses Due UW Thu - Jul 24  City Council Meeting: Approve sale parameters, appoint Paying Agent/Registrar and appoint Underwriters, adopt Ordinances and authorize preparation of Official Statement. City Fri - Aug 1  Receive Ratings FWG Tue - Aug 5  Due Diligence Call with UW Counsel FWG Thu - Aug 7  Post electronic POS FA Thu - Aug 14  ***Potential Pricing Date*** Pricing Officer Awards Bonds and Certificates to Underwriters City Fri - Aug 22  Print and mail OS FA Thu - Sep 11  Closing FWG, UW S M T W T F S S M T W T F S S M T W T F S S M T W T F S 1 2 3 1 2 3 4 5 6 7 1 2 3 4 5 1 2 4 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 9 11 12 13 14 15 16 17 15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 16 18 19 20 21 22 23 24 22 23 24 25 26 27 28 20 21 22 23 24 25 26 17 18 19 20 21 22 23 25 26 27 28 29 30 31 29 30 27 28 29 30 31 24 25 26 27 28 29 30 31 Council Meeting Holiday May-14 June-14 July-14 August-14
  • 6. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION City: City of College Station Financial Advisor: First Southwest Company Bond Counsel: McCall Parkhurst Underwriter: Raymond James RBC Capital Markets BOSC Inc. Robert W. Baird Underwriter’s Counsel: TBD Finance Team 7
  • 7. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION Recipients: Winners from competitive sales in 2010 and 2011 plus unsolicited proposals in 2014. Underwriter Request for Proposals Recipients 8  Competitive Sales: – BOSC – FTN Financial (no response to RFP) – JP Morgan (no response to RFP) – UBS  Unsolicited proposals: – BOSC – Piper Jaffray – RBC – RW Baird – George K. Baum
  • 8. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION  Criteria: – Takedown (Commission) (points ranked 0-8) – Number of Brokers in Texas (points ranked 0-8) – Number of Brokers in College Station area (points 4 points for representation) – Texas Experience: Texas city issues, full credit to senior managers for the most recent two years based on total par amount (points ranked 0-8) – Unsolicited Proposals (4 points) – Competitive Sales: Full credit to senior manager for 2010 and 2011 College Station issues (4 points) Underwriter Request for Proposals Criteria 9
  • 9. Member FINRA & SIPC © 2013 First Southwest Company CITYOFCOLLEGESTATION Summary of Underwriter Request for Proposal 10 Brokers in Comp. College Unsolicited Sale Station Proposals Winners(2) Average No. Amount Point Overall Firm Takedown Rank Points Rep. Rank Points Points (in millions) Rank Points Points Points Total Rank Raymond James 2.8675 1 8 531 1 8 4 1,341.77$ 1 8 28.0 1 RBC Capital Markets 2.9258 2 7 130 2 7 1,049.36 2 7 4 25.0 2 BOSC, Inc. 3.1316 7 2 57 3 6 540.92 4 5 4 4 21.0 3 Robert W. Baird 3.0086 3 6 40 5 4 777.39 3 6 4 20.0 4 Piper Jaffray and Co. 3.0175 4 5 2 8 1 485.23 5 4 4 14.0 5 Coastal Securities, Inc. 3.0498 6 3 42 4 5 148.98 7 2 10.0 6 Stifel Nicolaus & Company, Inc. 3.0350 5 4 39 6 3 433.77 6 3 10.0 6 George K. Baum and Co. 3.5067 8 1 0 9 0 3.90 9 0 4 5.0 8 Stephens Inc. 3.5097 9 0 21 7 2 70.07 8 1 3.0 9 (1) Data from Ipreo's Muni-analytics for7/18/2012 - 7/17/2014. Data on Texas Underwriting experience with full credit of par amount acting as senior book runner. (2) Competitive winners since 2010 in TexasAverage Takedown Texas Volume(1) City of College Station, Texas Underwriter RFP Results General Obligation Improvement & Refunding Bonds, Series 2014 Certificates of Obligation, Series 2014 No. of Brokers