HomeMy WebLinkAboutReso 96-150 - Approve entering into an underwriting Agreement with AG Edwards & Sons Inc for Investment Banking Services Associated with the Financing of the Civic Center Project _ ,
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RESOLUTION NO. 96- /.�4
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING APPROVING ENTERING INTO AN UNDERWRITING
AGREEMENT WITH A.G. EDWARDS & SONS, INC. FOR
INVESTMENT BANKING SERVICES ASSOCIATED WITH THE
FINANCING OF THE CIVIC CENTER PROJECT.
WHEREAS, at its regular meeting on June 18, 1996, the City Council authorized staff to issue a
request for proposals (RFP) for investment banking services associated with the financing of the Civic Center
Project; and
WHEREAS, proposals were received from seven firms and evaluated by a review committee; and
WI�REAS, the committee has recommended that the City Council select A.G. Edwards & Sons, Inc.
as the investment banker for the financing of the Civic Center Project;
NOW, TI�REFORE, BE IT RESOLVED that the City Council approves entering into the attached
Underwriting Agreement with A.G. Edwards & Sons, Inc.
BE IT FURTHER RESOLVED that the Mayor is authorized to sign the agreement and related
documentation on behalf of the City.
I HEREBY CERTIFY that the foregoing resolution was introduced, read and adopted at a regular
meeting of the City Council on the 2oth day of August , 1996, by the following vote:
AYEs: COUNCIL MEMBERS: P. Anderson, R. Anderson, Kehoe, Murray and McGeorge
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
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DAV L. McGE GE, ayor
Attest: Form Approved:
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Connie Strohmayer, Cit Clerk W. Leonard Wingate� ity Attorney
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Sample Letter of Ab eement
August 5, 1996
Ms. Carolyn J. Roberts
Purchasing Officer
The City of Redding, California
760 Parkview Avenue
Redding, CA 96001
RE: Letter of Agreement
Dear Ms. Roberts:
The City of Redding, California proposes to issue Certificates of Participation or Lease-Purchase
Revenue Bonds (the "Bonds"). In this regard, the City has requested A.G. Edwards & Sons, Inc.
("A.G. Edwards") to perform professional services in the capacity of Sole or Senior Managing
Underwriter, pursuant to the terms of this Underwriting Agreement (the "Agreement"). This
underwriting agreement is subject to a final bond purchase agreement to be executed at the time of the
award of sale.
l. General Provisions - Pursuant to our proposal, dated July 24, 1996, A.G. Edwards shall offer its
professional services and facilities as Underwriter for the proposed bond issuance and sale of the
Bonds. In that capacity, A.G. Edwards agrees to perform the following duties and such other
duties which will in the exercise of its professional skill and judgment may be necessary or
advisable, or as directed by the City.
a. A.G. Edwards will review the City's financial information and payment resources to
determine the extent of the City's borrowing capacity for the Civic Center Project.
b. A.G. Edwards will advise the City of current bond market conditions, forthcoming bond
issues and other general information and economic data which might normally be expected to
influence the interest rates or pricing conditions.
c. A.G. Edwards will assist in determining the term of amortization, call provisions, and other
factors which are relevant to marketing the Bonds.
d. A.G. Edwards will assist in preparation of the Pre.liminary and Final Official Statement and
such other marketing documents which may be required for the purpose of developing a
marketing program for the City's Bonds.
e. A.G. Edwards will recommend to the City on the matter of bond rating(s) for the proposed
issue and coordinate the preparations of such information for submission to the rating
agency(ies).
f. A.G. Edwards will manage the insurance application process and perform insurance analysis
to determine whether the City's issue should be rated, non-rated or insured. The least cost
alternative will be recommended. .
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Sample Letter of Agreement
g. A.G. Edwards will disseminate information to prospective purchasers and will work with the
City to establish a proper date for the pricing, award and closing of the Bond issue.
h. A.G. Edwards will assist the City in the preparation and verification of final closing figures
and provide suggestion for a program of temporary investment of Bond proceeds.
i. A.G. Edwards will deliver to the City and its Trustee definitive debt records, including a
schedule of annual debt service requirements on the Bonds being delivered.
j. Following the sale of one or more series of Bonds, A.G. Edwards will provide ongoing
services, including refunding analysis of the outstanding Bonds. In connection with the
refunding of one or more series of Bonds, A.G. Edwards will provide the same services as
included in this Agreement, at a fee to be agreed upon between the City and A.G. Edwards,
should the City so desire.
2. Bond Attornevs - A.G. Edwards agrees to direct and coordinate the entire bond program herein
contemplated. It is understood that the City will retain a bond counsel firm who will prepare the
documents and advise the City of the steps necessary to issue the Bonds, and who will issue an
opinion approving their legality and exemption from Federal taxation. A.G. Edwards will
maintain direct contact with bond counsel and shall assist in all aspects involved in the preparation
of appropriate legal proceedings and documents.
3. � - All fees are contingent upon the successful completion of the Bond Issue.
a. A.G. Edwards would charge an Underwriting Spread according to the credit rating of the
estimated $10 million issue.
LJNDERWRITING AAA(,Insured� Uninsured
SPREAD ($PER$1,000) ($ PER$1,000)
20 Year Financing
30 Year Financing
b. Normal out-of-pocket expenses are included in the fee provided in the above paragraph. The
Ciry agrees, however, to pay A.G. Edwards additional out-of-pocket expenses to the extent
incurred for travel outside the State of California on behalf and at the direction of the City (i.e.
travel to New York City to the rating agencies, if needed). Every attempt will be made to use
Rating Agency offices in San Francisco.
c. Expenses of issuance, including, but not limited to legal fees, underwriter's counsel fee at
$15,000, ratings fees, bond insurance fees, printing and delivery fees and other fees shall be
borne by the City. A.G. Edwards will print the Preliminary and Final Official Statements for
the City at cost, as detailed in our expense listing in the proposal of July 24, 1996, if so
directed.
d. The aforementioned fee and reimbursement expenses shall become due and payable
simulcaneously with the delivery of the 1996 series of Bonds.
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Sample Letter of Agreement ,
4. Termination - The term of the engagement shall be from the date of execution of the contract until
such time as the 1996 series of Bonds are sold and closed or a determination by the City is made
that no Bonds be issued, whichever occurs first. Either party may terminate the Agreement with a
thirty day notice of termination. In the event that the City terminates this agreement with
A.G. Edwards prior to the conclusion of the 1996 series of Bonds, the City shall be liable for fees
and expenses, as defined in this Agreement, incurred in connection with the Bonds through the
termination date. A.G. Edwards will cease work on the day of notice and make every effort to
(imit expenses.
5. Execution - This letter of Agreement is submitted in duplicate originals, when accepted by the City,
they wiIl constitute the entire agreement, subject to a Bond Purchase Contract to be executed on the
date of the award of Bonds between the City and the undersigned. The City's acceptance will be
indicated by proper signatures of its authorized officers or representatives on both copies and the
returning of one executed copy to A.G. Edwards.
Respectfully Submitted,
A.G. Edwards & Sons, Inc.
By:
Charles T. Forrest
Vice President & Manager
West Coast Public Finance
Accepted,
The Ciry of Redding, California
By:
ITS
Date
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