HomeMy WebLinkAboutexhibit8Exhibit D
City of Miami
Swap Advisory Engagement:
Letter Supplementing Pre -Existing F.A. Agreement
August 13, 2004
Scott Simpson, Finance Director
Dept. of Finance/Treasury Management Division
444 S.W. 2nd Ave., 6th Floor
Miami, FL 33130
Re: Letter of Understanding for Interest Rate Derivative Transaction Advisory Services
Dear Scott:
This letter describes the services that RBC Dain Rauscher ("RBC Dain") will provide as
advisor in connection with the interest rate derivative transaction ("IRDT") being
considered by the City of Miami ("Client"). That IRDT contemplates that Client will
enter into a swaption in a manner consistent with Client's financial plans and objectives
to monetize potential savings for its 1995 Taxable Pension Obligation Bonds. The
notional amount oldie financing is estimated to be approximately $65 million.
This letter supplements our general financial advisory agreement ("the Agreement")
dated . To the extent the terms of this letter conflict with the Agreement, the terms of this
letter govern. In all other respects, the Agreement remains in full force and effect, and
this letter is to be read together with the Agreement.
As advisor on the IRDT, RBC Dain will, at your direction, perform the following
services:
— Advise as to the possible and suggested IRDT plans;
— Assist in presenting the IRDT to appropriate boards and committees of Client;
-- Assist in presenting the IRDT to the rating agencies;
— Advise, as requested, as to selection of an IRDT counterparty and other parties
to the IRDT;
— Advise as to contractual terms and conditions of related IRDT documents;
— Advise regarding methods and timing of pricing the IRDT based upon capital
needs, legal constraints, and capital market conditions;
— Review relevant legal documents such as the ISDA master IRDT agreement,
related schedules and confirmation and the related bond documents for
purposes of the IRDT;
— Advise as to IRDT pricing and terms and assist during price negotiations with
the counterparty;
— Analyze the sensitivity of termination values and tax/basis exposure for various
market interest rate and effective tax rate scenarios;
— Review the documentation and closing process for the IRDT; and
— Prepare cash flow schedules showing possible financial results based upon
expected "stress" scenarios for the IRDT.. .
For the services described above our fee will be the present value of 0.03% in yield on
the TRDT. That fee is estimated to be approximately $50,000 per basis point or
approximately $150,000 in total based on the current structure of the IRDT. The fee will
be paid to us by the counterparty and included in the pricing of the IRDT paid -by Client.
"Out-of-pocket" expenses will be reimbursed directly by Client per the terms of the
Agreement, upon receipt of an invoice from RBC Dain. Reimbursement is not
contingent upon completion of the transaction.
Any IRDT entails certain risks and considerations that we believe it is important for the
Client to be aware of and understand. We will continue to provide information about
these risks and considerations to the Client.
Please indicate your acceptance of our services and fees by signing in the space indicated
below.
Sincerely,
RBC DAIN RAUSCHER INC.
0,0:J
By:
Name: Nate Eckloff
Title: Managing Director
Date: August 13, 2004
By:
Name: Jon. Moellenberg
Title: Managing Director
Date: August 13, 2004
ACCEPTED:
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City of Miami
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