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HomeMy WebLinkAboutSupplemental Attachments - 9:30am - 9/23/19urSpeer Financial, .Inc. INDEPENDENT MUNICIPAL ADVISORS ESTABLISHED 1954 KEVIN NIcCANNA ('hairman DANIEL FORBES President RAPHALIATA McKENZIE .Senior L7' The Honorable Quentin M. Hart, Mayor and Members of the City Council City of Waterloo 715 Mulberry Street Waterloo, IA 50703 Dear Mayor Hart and Council Members: MAGGIE BURGER Senior VI' September 23, 2019 ANTHONY MICELI Senior FT LARRY BURGER Vice President MARK JERETINA Vice President Bids were received today for the $2,815,000 General Obligation Refunding Bonds, Series 2019C. There were six bids received, which are listed at the bottom of this letter. Upon examination, it is our opinion that the bid of UMB Bank, n.a., Kansas City, Missouri, is the best bid received, and it is further our opinion that the bid is favorable to the City and should be accepted. After the sale, in order to accomplish the refunding, the par amount of the Tax -Exempt Refunding Bonds was reduced to $2,770,000. By the City choosing to currently refund the Series 2011A Bonds, the City will realize a gross savings of $191,698.33 and the net present value savings of $182,334.00 or 6.716% of the principal amount of the refunded bonds. We therefore recommend that the Tax -Exempt Refunding Bonds be awarded to that bidder at a price of $2,796,112.95, being at a true interest rate of 1.7232%. Account Managers UMB Bank, n.a., Kansas City, Missouri First Bankers' Banc Securities, St. Louis, Missouri INTL-FC Stone, Atlanta, Georgia Robert W. Baird & Co., Inc., Milwaukee, Wisconsin D.A. Davidson Company, Denver, Colorado Bernardi Securities, Inc., Chicago, Illinois LB/mr Enclosures Respectfully submitted, SPEER FINANCIAL, INC. 7 True Interest Rate 1.7242% (Original) 1.7232% (Revised) 1.7760% 1.8006% 1.8190% 1.9470% 2.0485% Larry P. Burger, Vice President SUITE 4100. ONE NORTH LASALLE STREET • CHICAGO. ILLINOIS 60602 • (312) 346-3700 • FAX (312) 346-8833 SUITE 608 • 531 COMMERCIAL STREET • WATERLOO, IOWA 50701 • (319) 291-2077 • FAX (319) 291-8628 MOODY'S INVESTORS SERVICE Rating Action: Moody's assigns Aa2 to Waterloo, IA's GOULT Bonds 18 Sep 2019 New York, September 18, 2019 — Moody's Investors Service assigns Aa2 to City of Waterloo, IA's $2.8 million General Obligation Refunding Bonds, Series 2019C and $3.6 million Taxable General Obligation Refunding Bonds, Series 2019D. Moody's maintains a Aa2 rating on the city's outstanding general obligation unlimited tax general obligation (GOULT) debt. Following the sales, the city will have $98 million on GOULT debt outstanding. RATINGS RATIONALE The Aa2 rating reflects the city's role as an employment and population hub in eastern Iowa (Aaa stable) that supports its stable tax base and sound financial profile. The rating also reflects the city's above average debt and pension burden. RATING OUTLOOK Moody's does not typically assign outlooks to local governments with this amount of debt. FACTORS THAT COULD LEAD TO AN UPGRADE - Reduction in the city's debt and pension burdens - Significant and sustained improvement in financial reserves - Expansion of the city's tax base and strengthening in resident income levels FACTORS THAT COULD LEAD TO A DOWNGRADE - Growth in the city's debt and pension burden - Declines in financial reserves - Contraction of the city's tax base or weakening of resident income levels LEGAL SECURITY The city's outstanding GOULT debt, including the Series 2019C and 2019D bonds, is secured by a dedicated property tax levy that is unlimited as to rate or amount to pay debt service. USE OF PROCEEDS The Series 2019C and Series 2019D bond proceeds will refund all of the city's General Obligation Bonds, Series 2011A and General Obligation Bonds, Taxable Series 2011B for interest cost savings. PROFILE The City of Waterloo is located in northeastern Iowa, approximately 50 miles northwest of Cedar Rapids. The city provides municipal services to a population of approximately 68,000 residents and is the county seat of Black Hawk County (Aa2). METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in December 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. REGULATORY DISCLOSURES For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com. Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review. Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating. Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Daniel Simpson Lead Analyst Regional PFG Chicago Moody's Investors Service, Inc. 100 N Riverside Plaza Suite 2220 Chicago 60606 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Coley Anderson Additional Contact Regional PFG Chicago JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 MOODY'S INVESTORS SERVICE © 2019 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. 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Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements. INDEPENDENT MUNICIPAL ADVISORS • ESTABLISHED 1954 if Speer Financial, Inc. SUITE 608 • 531 COMMERCIAL STREET • WATERLOO, IOWA 50701 • (319) 291-2077 • FAX (319) 291-8628 Bidders* UMB Bank, n.a. Kansas City, Missouri Investment Rating: Moody's Investors Service ... Aa2 CITY OF WATERLOO Black Hawk County, Iowa $2,770,000 General Obligation Refunding Bonds, Series 2019C Price 100.949% $2,841,717.80 (Original) 100.942% $2,796,112.95 (Revised) Date of Sale: September 23, 2019 Average Life: 3.558 Years (Based on TIC) Maturities 2020 2021 2022 2023 2024 2025 2026 Bidders* Price First Bankers' Banc Securities 100.976% St. Louis, Missouri $2,842,481.90 INTL-FC Stone 104.118% Atlanta, Georgia $2,930,933.25 Bid Par $ 420,000 395,000 400,000 395,000 400,000 400,000 405,000 $2,815,000 Revised True Par Rates Interest* * $ 420,000 2.000% 1.7242% 395,000 2.000% $175,731 400,000 2.000% (Original) 395,000 2.000% 395,000 2.000% 1.7232% 380,000 2.000% $170,989 385,000 2.000% (Revised) $2,770,000 True Maturities Rates Interest* * 2020 - 2024 2.000% 1.7760% 2025 - 2026 2.125% $181,117 2020 - 2026 3.000% 1.8006% $187,741 Robert W. Baird & Co., Inc. 100.621% 2020 - 2026 2.000% 1.8190% Milwaukee, Wisconsin $2,832,497.70 $184,951 D.A. Davidson Company 103.602% 2020 - 2026 3.000% 1.9470% Denver, Colorado $2,916,413.75 $202,260 Bernardi Securities, Inc. 103.247% 2020 - 2026 3.000% 2.0485% Chicago, Illinois $2,906,408.30 $212,265 *Syndicate information is provided by the underwriter. The information contained in this report is the most current available. **The winning bid was adjusted to reflect the new amount of $2,770,000. All other bids were based on the pre -sale amount of$2,815,000. * *The true interest rate reflects the time value of money where dollars spent in early years have a greater weight than dollars spent in later years. jr1 Speer Financial, Inc. INDEPENDENT MUNICIPAL ADVISORS City of Waterloo, Iowa $8,985,000 General Obligation Bonds, Series 2011A *** FINAL - for Current Refunding 2019 *** Total Refunded Debt Service Date Principal 06/01/2020 365,000.00 06/01/2021 370,000.00 06/01/2022 380,000.00 06/01/2023 385,000.00 06/01/2024 395,000.00 06/01/2025 405,000.00 06/01/2026 415,000.00 Total $2,715,000.00 Coupon 4.000% 4.000% 4.000% 4.000% 4.000% 4.000% 4.000% Interest Total P+I 108,600.00 94,000.00 79,200.00 64,000.00 48,600.00 32,800.00 16,600.00 $443,800.00 473,600.00 464,000.00 459,200.00 449,000.00 443,600.00 437,800.00 431,600.00 $3,158,800.00 11A WIoo 8.985 GO for C R I SINGLE PURPOSE 1 9/23/2019 1 12:07 PM Speer Financial, Inc. Registered Municipal Advisor jr'Speer Financial, Inc. �/ INDEPENDENT MUNICIPAL ADVISORS City of Waterloo, Iowa $2,770,000 General Obligation Refunding Bonds, Series 2019C *** FINAL *** Debt Service Schedule Date Principal 06/01/2020 420,000.00 06/01/2021 395,000.00 06/01/2022 400,000.00 06/01/2023 395,000.00 Call 06/01/2024 395,000.00 06/01/2025 380,000.00 06/01/2026 385,000.00 Total $2,770,000.00 Coupon Yield Statistics Interest Total P+I 2.000% 33,701.67 453,701.67 2.000% 47,000.00 442,000.00 2.000% 39,100.00 439,100.00 2.000% 31,100.00 426,100.00 2.000% 23,200.00 418,200.00 2.000% 15,300.00 395,300.00 2.000% 7,700.00 392,700.00 $197,101.67 $2,967,101.67 Bond Year Dollars Average Life $9,855.08 Average Coupon Net Interest Cost (NIC) 3.558 Years 2.0000000% True Interest Cost (TIC) Bond Yield for Arbitrage Purposes All Inclusive Cost (AIC) IRS Form 8038 1.7350307% 1.7232962% 1.5583126% 2.0567775% Net Interest Cost 1.5968537% Weighted Average Maturity 3.567 Years 19C Wloo 2.770 GO TE Ref1 1 SINGLE PURPOSE 1 9/23/2019 1 12:07 PM Speer Financial, Inc. Registered Municipal Advisor Speer Financial, Inc. INDEPENDENT MUNICIPAL ADVISORS City of Waterloo, Iowa $2,770,000 General Obligation Refunding Bonds, Series 2019C *** FINAL *** Debt Service Comparison Date Total P+l Net New DM Old Net D/S Savings 06/01/2020 453,701.67 453,701.67 473,600.00 19,898.33 06/01/2021 442,000.00 442,000.00 464,000.00 22,000.00 06/01/2022 439,100.00 439,100.00 459,200.00 20,100.00 06/01/2023 426,100.00 426,100.00 449,000.00 22,900.00 06/01/2024 418,200.00 418,200.00 443,600.00 25,400.00 06/01/2025 395,300.00 395,300.00 437,800.00 42,500.00 06/01/2026 392,700.00 392,700.00 431,600.00 38,900.00 Total $2,967,101.67 $2,967,101.67 $3,158,800.00 5191,698.33 PV Analysis Summary (Net to Net) Gross PV Debt Service Savings 177,567.62 Net PV Cashflow Savings @ 2.057%(AIC) 177,567.62 Contingency or Rounding Amount 4,766.38 Net Present Value Benefit 5182,334.00 Net PV Benefit / $2,715,000 Refunded Principal 6.716% Net PV Benefit / $2,770,000 Refunding Principal 6.582% Refunding Bond Information Refunding Dated Date 10/22/2019 Refunding Delivery Date 19C Wloo 2.770 GO TE Ref1 1 SINGLE PURPOSE 1 9/23/2019 1 12:07 PM Speer Financial, Inc. Registered Municipal Advisor 10/22/2019