HomeMy WebLinkAboutExhibit - ProposalMay 4, 2017
Re: City of Miami, Florida — Request for Bank Note Proposals — Non -Ad Valorem Note
On behalf of Raymond James Capital Funding, Inc., we are pleased to submit the attached loan proposal
including the terms and conditions applicable to finance the cost of park remediation and improvements
within the City. Please note that while the Lender is providing a term sheet for both the Non -Ad
Valorem Note and the Limited General Obligation Note, it will commit to providing a loan for only
one of these obligations, but not both.
Transaction Overview
Borrower: City of Miami (the "City")
Lender: Raymond James Capital Funding, Inc. — a non-bank subsidiary of Raymond
James Bank (the "Lender")
Facility: The obligation will be in the form of a loan issued to the City in an amount not
to exceed $27,000,000 (the "2017A Note"). Interest on the 2017A Note shall be
tax-exempt to the holders thereof.
Purpose: The City shall use proceeds of the 2017A Note to (i) provide funds for
remediation and improvements to park facilities within the City and (ii) pay the
related costs of issuance (the "Project").
Closing Date: On or before June 27, 2017 (the "Closing Date")
Security: The payment of the principal of and interest on the 2017A Note shall be secured
by a covenant to budget and appropriate from all general fund revenues of the
City not derived from ad valorem taxation and which are lawfully available to
be used to pay debt service on amounts due under the 2017A Note.
Term/Maturity: The 2017A Note shall mature no later than January 1, 2032 with interest
payments on the outstanding principal balance of the 2017A Note calculated
on a 30/360 -day basis and paid semiannually on January 1 and July 1, beginning
January 1, 2018. The principal amount of the 2017A Note shall be payable
annually beginning January 1, 2018 corresponding to the estimated
amortization schedule below.
° ayi°mmoind James Call,)ftal yumindiing, Illuimc.
710 C u'lilllla:mu7 PaIrkway // C't:. Peteu�ayuucy, 0 ]... 33716 // 727 56 7 8000// u„ yum:a:mu�yi um:aal� u�lk.a:orn
Interest Rate:
1/1/2018
$1,580,000
1/1/2019
$1,435,000
1/1/2020
$1,480,000
1/1/2021
$1,525,000
1/1/2022
$1,570,000
1/1/2023
$1,620,000
1/1/2024
$1,670,000
1/1/2025
$1,720,000
1/1/2026
$1,775,000
1/1/2027
$1,825,000
1/1/2028
$1,880,000
1/1/2029
$1,940,000
1/1/2030
$2,000,000
1/1/2031
$2,060,000
1/1/2032
$2,120,000
Total $26,200,000 1
The interest rate on the 2017A Note shall be fixed for the term of the financing
at a tax-exempt, non-bank qualified interest rate of 2.56%. So long as the yield
on the 10 -year constant maturity US Treasury Bond as reported on the United
States Department of the Treasury Daily Treasury Yield Curve Table website
(https://www.treasury.gov/resource-center/data-chart-center/i nterest-
rates/Pages/TextView.aspx?data=yield) is at or below 2.50% thirty (30) days
prior to the Closing Date (rate is 2.29% as of May 2), the interest rates shall not
change. If the yield on the 10 -year constant maturity Treasury Bond exceeds
2.50% thirty (30) days prior to the Closing Date, the interest rate shall be reset
as follows:
[(70% 10 -yr US Constant Maturity Treasury Yield) + 0.96%]
ayi°mmoind James CalAW yumindiuimgy Illuimc.
710 Cau'lillllon Pau„Ikway // St. Peteuayuucy, 0 ]... 33716 // 727 567 8000 // u„yum:ondiarnesbanik.a:orn
Original Issue
Discount: The Lender will make the Loan at a discount of 0.25% of the par amount of the
2017A Note treated by the Lender as an original issue discount for Federal
income tax purposes.
Lender's Counsel: The Lender shall be represented Michael Wiener with Holland & Knight LLP.
Responsibilities shall be limited to a review of documents with fees capped at
$10,000 paid from proceeds of the 2017A Note.
Prepayment: Except as provided under "Gross -Up" below, the 2017A Note may only be
prepaid in whole or in part on or after January 1, 2027, on any business day
upon 30 days prior written notice to the Lender at 100% of the then outstanding
principal amount plus any accrued interest. Prior to this date, the 2017A Note
may not be prepaid in whole or in part without consent of the Lender. Partial
prepayments shall be applied in inverse order of maturity or scheduled
amortization and shall be subject to a minimum amount of $1,000,000 and
increments of $5,000 in excess thereof.
Conditions
Precedent: The City and its agents shall deliver closing documents and make
representations customary in similar transactions and acceptable to the
Lender. While preliminary credit approval has been obtained, the final amount
and terms shall be subject to final credit approval as a condition precedent to
closing this transaction. Such approval is expected to take no more than ten
(10) business days after the notification of award. Additional information
requirements are expected to be limited to a final amortization schedule,
however the Lender reserves the right to request additional information
necessary to complete its due diligence process.
Covenants: The 2017A Note shall be issued under the same covenants included in the City's
prior obligations secured by a covenant to budget and appropriate non -ad
valorem revenues. If any indebtedness of the City secured by a covenant to
budget and appropriate non -ad valorem revenues becomes subject to
acceleration, the Lender's obligation will be accelerated on identical terms. The
City shall provide the Lender with annual audits within 240 days of the City's
fiscal year-end and budgets within 30 days of adoption. The City shall also
provide such other information as the Lender shall reasonably request.
Tax Treatment: The interest on the 2017A Note shall be excludable from gross income for
federal income tax purposes. The City shall covenant to perform all actions,
functions or requirements in order to maintain the tax-exempt status on the
2017A Note. The Lender shall be provided an opinion of tax counsel satisfactory
to the Lender and Lender's Counsel which concludes that the interest on the
° ayi°mmoind James CalYiAW yumindiuimgy Illuimc.
710 C u'lilllla:mu7 PaIrkway // C't:. Peteu�ayuucy, 0 ]... 33716 // 727 56 7 8000// u„ yum�a:mu�yi um�aal� u�lk.a:orn
Series 2017A Note (including any original issue discount properly allocable to
an owner thereof) is excludable from gross income for federal income tax
purposes. Lender shall require an opinion of counsel that the loan and loan
documents are exempt from registration and qualification under the Securities
Act of 1933 and Trust Indenture Act of 1939.
Taxability: Gross -up shall be limited to an event of taxability resulting from actions or
inactions of the City. Upon an event of taxability, the interest rate on the
2017A Note shall increase to a taxable rate of 3.94% as of the date of
taxability including a payment reflecting the difference between the tax-
exempt and taxable rate from the determination of taxability plus any
penalties and costs incurred by the Lender. Upon a determination of
taxability, at the option of the City, the 2017A Note may be prepaid at par
plus accrued interest at the taxable rate from the date of taxability to the
date of prepayment plus any penalties and costs incurred by the Lender
upon 30 days prior written notice to the Lender.
Defaults/Remedies: Upon the occurrence of an event of default, the financing documents will
provide remedies to the Lender customary for transactions of this nature,
including, without limitation, the ability to exercise rights and remedies
available under law, equity or under the terms of the financing documents and
the interest rate shall be adjusted to the Default Rate described above. The City
shall provide notice to the Lender within five business days of any default or a
default with which the passage of time or giving of notice would constitute an
Event of Default under the bond resolution or the supplemental resolution.
Waiver of
Jury Trial: The City and the Lender shall waive, to the fullest extent permitted by applicable
law, any right to have a jury participate in resolving any dispute in any way
related to the transactions contemplated hereby or any documents related
thereto.
No Advisory or
Fiduciary Role: The City acknowledges and agrees that: (i) information contained in this
document regarding the 2017A Note is for discussion purposes only in
anticipation of engaging in arm's length commercial transactions with the City
in which the Lender would be acting solely as a principal to make a loan to the
City, and not as a municipal advisor, financial advisor or fiduciary to the City or
any other person or entity regardless of whether the Lender or an affiliate has
or is currently acting as such on a separate transaction; (ii) the Lender has not
assumed any advisory or fiduciary responsibility to the City with respect to the
transaction contemplated hereby and the discussions, undertakings and
procedures leading thereto (irrespective of whether the Lender or its affiliates
have provided other services or are currently providing other services to the
Rayi°mmoind James CalAW yumindiuimgy Illuimc.
710 Cau lillllon ysu„Ikway // St. y"sPsusbuucy, 0 ]... 33716 // 727 56 7 8000 // u„yum:ondiarneslbanik.a:orn
City on other matters); (iii) the only obligations the Lender has to the City with
respect to the transaction contemplated hereby expressly are set forth in this
term sheet and the financing documents; and (iv) the City has consulted its own
legal, accounting, tax, financial and other advisors, as applicable, to the extent
it has deemed appropriate.
Disclaimer: This term sheet includes information related to a direct loan transaction
("Direct Loan"). Please be advised that Direct Loan is a product offering of the
Lender. Additionally, the Lender has financial and other interests that differ
from your interests. In its proposed capacity, Lender's sole role would be to
enter into a loan agreement to provide funds for the purpose stated above.
Lender will not have any duty or liability to any person or entity in connection
with the information provided herein. The information provided is not intended
to be and should not be construed as "advice" within the meaning of Section
15B of the Securities Exchange Act of 1934.
Confidentiality: This term sheet is confidential and proprietary, and terms herein may not be
disclosed without our prior written consent, except to your professional
advisors in connection with the 2017A Note who agree to be bound by such
confidentiality requirements, or as may be required by law. Notwithstanding
anything herein to the contrary, any party hereto may disclose to any and all
persons, without limitation of any kind, the tax treatment or tax structure of
this transaction. Furthermore, the parties to this transaction may disclose, as
required by federal or state laws, any information as required to comply with
such federal or state laws.
ayi°mmoind James CalAW yumindiuimgy Illuimc.
710 Cau lilllla:muj Pu„Ikway // St. Peteu�ayuucy, 0 ]... 33716 // 727 56 7 8000 // u„ yumondiarnesbank.aorn
This term sheet will expire and the transaction must close on or before June 27, 2017 unless extended
by Lender. Thank you for the opportunity to be of service to the City of Miami. Should you have any
questions, please don't hesitate to contact me at the number below.
Sincerely,
I
Cord D. King
Tax -Exempt Lending Manager
Raymond James Capital Funding, Inc.
710 Carillon Parkway
St. Petersburg, FL 33716
727.567.2055
cord.kin @raymoncrames.com
rewmamon
Iffil#Ei
FAW
° ayi°mmoind James CalAW yumindiuimgy Illuimc.
710 Cau lilllla:muj Pu„Ikway // St. Peteuayuucy, 0 ]... 33716 // 727 567 8000 // u„ yumondiarnesbank.aorn