HomeMy WebLinkAboutDNT Asset Trust/JP Morgan - $5.5MM Rate Lock Letter Agreement - 7.15.2024RATE LOCK LETTER AGREEMENT
July 16, 2024
City of Waterloo
Dear:
Defined Terms:
Rate Lock Date: July 16, 2024
Rate Lock Funding Date: August 19, 2024
Rate Lock Breakage Date: Date on which the rate lock is broken on or before the Rate Lock
Funding date.
Rate Lock Amount: $5,500,000
Annual Interest Rate (%): 3.77% (Must be executed by an Authorized Signer of the City of
Waterloo, Iowa 7:00 EST July 16th or subject to change)
Designated Tenor: Final maturity — June 1, 2039
This letter is to confirm that, pursuant to your request, DNT Asset Trust with JPMorgan Chase Bank,
N.A. (the "Bank") as Purchaser Representative has reserved for City of Waterloo, Iowa(`Borrower")
$5,500,000 in fixed rate funds effective on the Rate Lock Date, in anticipation of the Borrower's
financing need on or before Rate Lock Funding Date, as further evidenced by the Bank's commitment
letter of even date, accepted by the City of Waterloo, Iowa.
The interest rate for the 15 year period (the "Designated Tenor") of the above -described financing
will be at an annual rate equal to 3.77% (Must be executed by 7:00 EST July 16' 2024 or the rate is
subject to change with market conditions).
Nothing in this letter shall evidence the commitment of the Bank to engage in the proposed
transaction. However, in order to lock the interest rate for this transaction, Borrower agrees that, if
for any reason, the full Rate Lock Amount is not funded in accordance with the terms of the financing
documents by the Rate Lock Funding Date, then the City of Waterloo, Iowa shall pay a Reinvestment
Premium to the Bank within 5 business days of the Bank's written request, as further described below.
I. A Reinvestment Premium shall be due and payable if (i) exceeds (ii) where (i) equals total
scheduled interest payments due on the Rate Lock Amount calculated at the Swap Rate (defined
below) for the Designated Tenor on the Rate Lock Date plus 5 basis points, and (ii) equals the
total scheduled interest payments due on the Rate Lock Amount calculated at the Swap Rate for
the Designated Tenor on the Rate Lock Breakage Date. For purposes of calculating the
Reinvestment Premium, "Swap Rate" means, for a specified date and maturity, the most recently
available rate as of that date for a U.S. Dollar SOFR interest rate swap (annual payments of fixed
rate versus compounded daily SOFR) of that maturity (the "U.S. Dollar SOFR ICE Swap Rate")
Confidential
as listed in USD Rates SOFR 1100 Report as administered by ICE Benchmark Administration
Limited (IBA) at or about 11:15 a.m., New York City, New York time, and published by
Bloomberg Professional Services (the "Service") or other information vendors acceptable to the
Bank or the following alternatives, as applicable: (a) if the Service does not publish a USD Rates
SOFR 1100 Report on either the Rate Lock Date or the Rate Lock Breakage Date, the most recent
U.S. Dollar SOFR ICE Swap Rate published by the Service or administered by the IBA as of the
Rate Lock Date or Rate Lock Breakage Date, as applicable shall be utilized, unless such U.S.
Dollar SOFR ICE Swap Rate was published more than two business days prior to either the Rate
Lock Date or the Rate Lock Breakage Date, as applicable, in which event, the Bank may,
notwithstanding any other considerations, calculate the Swap Rate using either alternative (b) or
(c); (b) if the Service no longer publishes a USD Rates SOFR 1100 Report, if the IBA no longer
administers a USD Rates SOFR 1100 Report, or if the most recent U.S. Dollar SOFR ICE Swap
Rate was published more than two business days prior to either the Rate Lock Date or the Rate
Lock Breakage Date, as applicable, the Bank may utilize other sources for determining the value
of the U.S. Dollar SOFR ICE Swap Rate or may, in lieu of the U.S. Dollar SOFR ICE Swap Rate,
utilize other U.S. dollar interest rate swap rates obtained from other sources that it determines, in
its sole discretion, provide current market -based information as to mid -price U.S. dollar interest
rate swap rates; or (c) if there is no Swap Rate for the Designated Tenor, the applicable Swap Rate
will be based upon the linear interpolation between the Swap Rates reported by the Service,
administered by the IBA, or otherwise made available by alternative sources for the closest tenors
above and below the Designated Tenor. The Bank's determination of the interpolated rate shall
be deemed conclusive.
II. If (ii) above is equal to or greater than (i) above, then no Reinvestment Premium is due.
III. The Reinvestment Premium payable to the Bank shall be equal to the present value of the
difference in scheduled interest payments of (i) above less (ii) above for each scheduled interest
period, discounted at the applicable Swap Rate as of the Rate Lock Breakage Date, as determined
above.
If the City of Waterloo, Iowa is in agreement with the above, please indicate such acceptance by
providing signatures as set forth below, and returning this letter to my attention. This rate lock letter
is only effective if the Commitment Letter, as issued by the Bank, has been timely executed by the
City of Waterloo, Iowa.
JPMorgan is delighted to be of assistance in this matter and looks forward to working with you to
complete this transaction.
Yours truly,
DNT Asset Trust with J.P. MORGAN CHASE BANK, N.A. as Purchaser Representative:
By:Angela J Blackmer (Underwriter) and Rachelle Beals (Business Development Executive)
Its: Authorized Officers
J.P.Morgan 2
Confidential
Agreed to and accepted by:
City of Waterloo, Iowa
Que it art I4 ,
SIGNED
By:
Name:
Quentin Hart
Mayor
Its:
Date: July 15 20 24
J.P. Morgan
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