HomeMy WebLinkAboutBack-Up - RFP Response�1ti► Santander
VIA ELECTRONIC MAIL
August 21, 2015
Pedro Varona
Senior Analyst
Public Financial Management, Inc.
255 Alhambra Circle, Suite 404
Coral Gables, FL 33134
14362 N. Frank Lloyd Wright Blvd.
Suite 1000
Scottsdale ■ AZ • 85260
RE: Police Vehicle Financing (RFP)
Dear Mr. Varona:
Santander Bank is pleased to submit the following proposal for your review and acceptance.
Our proposed terms and conditions are as follows:
Company Overview: Santander Bank is a market leader in providing cost-effective
financing to public entities nationwide. With just over $1 billion in financings we have the
knowledge, flexibility and financial strength that is unmatched in the finance industry.
Our public finance team of professionals has a thorough understanding of the municipal
market to ensure transactions are completed quickly, efficiently and cost effectively.
Santander Bank was founded in Northern Spain in 1857, with over $1.7 trillion in assets.
Santander is one of the world's strongest, safest and most successful banks and has grown
to become one of the five largest banks in the world by profit.
Structure: Tax-exempt Installment Financing Agreement
(Subject to annual appropriation) ("Lease")
Borrower: City of Miami, FL ("City")
Lender: Santander Bank, N.A. ("Santander")
Equipment: Approximately 1,000 Vehicles
Amount Financed: $32,000,000
Financing Term: Financing arrangement that will provide capacity for a five-year
draw period, followed by a fixed rate, level repayment structure
for 5 Years. Each draw period (Lease Schedule) will be
created on a quarterly basis (unless otherwise approved by
Santander) at which time an interest rate will be calculated and
locked for a closing within 30 days. Each Lease Schedule will
Financing Proposal
Santander Bank
August 21, 2015
Page 2 of 4
Projected Closing Date:
Interest Rates:
consist of five annual principal payments and semi-annual
interest payments beginning January 1 of the next calendar
year after Lease Commencement.
First Lease Schedule draw will close on or about October 1,
2015
Interest Rates will be indexed and locked 30 days prior to a
Lease Commencement. Each Lease Commencement will
occur on the 2nd to the last business day of the following
months (unless otherwise approved by Santander):
Month Closing
Interest Rate
Ave Life
Ave Life Libor
(as of 8/20/2015)
Index Spread
March
1.69%
3 Years
1.1750%
0.9263%
June
1.64%
3 Years
1.1750%
0.8763%
September
1.57%
2 Years
0,8870%
0.9935%
December
1.54%
2 Years
0.8870%
0.9635%
Interest Rates and Payments will be indexed according to changes
to the (2) Two or (3) Three Year Libor Rate based on the Lease
Commencement date.
For example (March Closing):
For every change in the (3) Three Year Libor, an adjustment will be
made to the Interest Rate and Payment.
Sample Calculation: Using August 20th Libor Rate, the formula for
calculating the Interest Rate will be as follows:
3 Year Libor Rate (as of August 20, 2015) = 1.1750%
(3 Year Libor Rate x 0.65%) + Indexing Spread = Interest Rate
(1.1750% x 0.65%) + 0.9263% = 1.690%
If Libor goes up 15 basis points:
Adjusted 3 Year Libor Rate = 1.3250% (1.1750% + 0.15%)
(3 Year Libor Rate x 0.65%) + Indexing Spread = Interest Rate
(1.3250% x 0.65%) + 0.9263% = 1.7876%
If Libor goes down 15 basis points:
- Adjusted 3 Year Libor Rate = 1.0250% (1.1750% - 0.15%)
14362 N. Frank Lloyd Wright Blvd. ■ Suite 1000 ■ Scottsdale ■ AZ ■ 85260
(480) 477-7896 (480) 477-7897 Fax
Financing Proposal
Santander Bank
August 21, 2015
Page 3 of 4
- (3 Year Libor Rate x 0.65%) + Indexing Spread = Interest Rate
- (1.0250% x 0.65%) + 0.9263% = 1.5926%
Prepayment Terms: After the first anniversary date of a specific Lease Schedule's
Commencement Date, the City may prepay the Lease
Schedule on any payment date with no prepayment premium.
Tax Assumption: Interest income received by Santander will be exempt from
Federal and State Income Tax.
Credit Review: Upon Credit Approval, Santander will provide the City of Miami
with a committed credit facility for a period of 12 months
subject to annual credit review and approval until the
$32,000,000 is fully utilized.
Fees/Closing Costs: None other than those listed herein, however the City will be
responsible for any fees or expenses with respect to its (i)
legal counsel, if any and (ii) title, and registration fees, if any.
Santander is willing to finance any expenses related to closing
the transaction.
Contract Specifications: Santander understands and agrees to the certifications
outlined in the RFP but is unable able to agree to any "other"
certifications that have not been disclosed at this time.
This proposal is subject to final credit approval and final documentation. Please feel free to
call me at 480-477-7896 with any questions or further clarification.
Thank you for the opportunity to present this proposal.
Sincerely,
Bruce Block
Senior Vice President
14362 N. Frank Lloyd Wright Blvd. • Suite 1000 • Scottsdale • AZ • 85260
(480) 477-7896 (480) 477-7897 Fax
Financing Proposal
Santander Bank
August 21, 2015
Page 4 of 4
Sample Amortization Schedule
Lease Commencement Date: September 29, 2015
Rate = 1.57%
Date Payment
9/28/2015
1 1/1/2016
2 7/1/2016
3 1/1/2017
4 7/1/2017
5 1/1/2018
6 7/1/2018
7 1/1/2019
8 7/1/2019
9 1 /1 /2020
Grand Totals
6,527,039.83
200,989.22
6,527, 039.83
151, 329.72
6,527,039.83
101,280.39
6,527,039.83
50,838.18
6,527,039.83
33,139,636.66
Interest
130, 761.64
200,989.22
200,989.22
151, 329.72
151,329.72
101,280.39
101,280.39
50,838.18
50,838.18
Purchase
Principal Balance Option
6,396,278.19
0.00
6,326,050.61
0.00
6,375,710.11
0.00
6,425,759.44
0.00
6,476,201,65
1,139,636.66 32,000,000.00
32,000,000.00
25,603,721.81
25,603,721.81
19,277,671.20
19,277,671.20
12,901,961.09
12,901,961.09
6,476,201.65
6,476,201,65
0.00
19,277,671.20
19,277,671.20
12,901,961.09
12,901,961.09
6,476,201.65
6,476,201.65
0.00
14362 N. Frank Lloyd Wright Blvd. ■ Suite 1000 ■ Scottsdale ■ AZ ■ 85260
(480) 477-7896 (480) 477-7897 Fax