DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Approving the Financial Underwriter Syndicates
SUMMARY:
This Ordinance authorizes and approves the Financial Underwriter Syndicates selected from the Financial Underwriting Pool for financings of: (1) General Improvement Bonds, Series 2018; Combination Tax and Revenue Certificates of Obligation, Series 2018; Combination Tax and Revenue Certificates of Obligation, Taxable Series 2018; and Tax Notes, Series 2018; and (2) General Improvement Refunding Bonds (HUD 108 Loan Refunding).
BACKGROUND INFORMATION:
The City established a Financial Underwriting Pool (“Underwriting Pool”) comprised of firms to be utilized for the selection of underwriting syndicates for financial transactions effectuated by the City over the term of the Underwriting Pool. Once a potential bond financing transaction is identified, an underwriting syndicate is selected from firms within the Underwriting Pool. Their roles will be determined based on performance and innovative ideas presented to the City and to the City’s Co-Financial Advisors in addition to other considerations including capital position and sales and distribution capabilities. Firms included in the Underwriting Pool can potentially serve in the capacity of Senior, Co-Senior, or Co-Managing Underwriter.
On May 1, 2018, staff of the Finance Department and the City’s Co-Financial Advisors met to review and finalize recommendations for the Financial Underwriter Syndicates for financings planned for Fiscal Year 2018 and early Fiscal year 2019, which include the following: (1) General Improvement Bonds, Series 2018; Combination Tax and Revenue Certificates of Obligation, Series 2018; Combination Tax and Revenue Certificates of Obligation, Taxable Series 2018; and Tax Notes, Series 2018; and (2) General Improvement Refunding Bonds (HUD 108 Loan Refunding).
The Proposed Financial Underwriter Syndicates are included in Exhibit I. In the development of the proposed syndicates for these transactions, consideration was given to the following:
1. Background and expertise of firm, lead banker, and lead underwriter.
2. Performance on past City financing transactions.
3. Customer service and innovative ideas presented to the City and the City’s Co-Financial Advisors.
4. Capitalization and the firm’s willingness to commit capital in recent transactions.
5. Expertise and experience in specific types of transactions.
6. Sales and distribution capabilities.
ISSUE:
The selection of the Proposed Financial Underwriter Syndicates is consistent with the City’s previous actions to employ underwriting syndicates to market and underwrite the City’s debt obligations as well as to assist in the design and structuring of such obligations.
ALTERNATIVES:
The City could choose to delay the selection of the Financial Underwriter Syndicates; however, that decision would delay the various potential financing transactions which are anticipated to occur in Fiscal Year 2018 and early Fiscal Year 2019.
FISCAL IMPACT:
Fees for financial underwriting services pertaining to the issuance of debt obligations are paid from the proceeds derived from the issuance and sale of such obligations. Therefore, there is no impact on the City’s Operating Budget.
RECOMMENDATION:
Staff recommends approval of this ordinance approving the Financial Underwriter Syndicates selected from the Financial Underwriting Pool for financings planned for Fiscal Year 2018 and early Fiscal Year 2019.