Creating Solutions For Your Financing Needs. Everyday. PUBLIC FINANCE

Transcription

1 Creating Solutions For Your Financing Needs Everyday. PUBLIC FINANCE

2 Leading the WAy in Public Finance Since 1890 At Stifel, Nicolaus & Company, Incorporated, our clients receive all the advantages of a fullservice brokerage and investment banking firm with a long history of success. Established in 1890, we are committed to helping you achieve your goals and making sure that you receive the full benefit of our extensive experience. Our clients reflect a diverse number of public and non-profit entities, including municipalities, hospitals, long-term care facilities, educational institutions, school districts, public agencies, housing authorities, and other state and local governmental bodies. We have been providing investment services nationally for over 120 years, and we are one of the few remaining independent, full-service, securities-related financial services firms in the country. Whether a borrower has a one-time project or a long list of needs, each client is important to us. At Stifel Nicolaus, it s about building relationships.

3 Stifel Nicolaus Our History Established in 1890 as a partnership of two individuals, Stifel Nicolaus has grown to one of the largest brokerage firms in the country (in regard to the number of financial advisors). The philosophy of safeguarding the money of others as if it was your own has not changed the same can be said for our determination and focus on creating and fostering long term relationships with each of our clients. While maintaining an active retail brokerage for individual investors, the firm also became a pioneer in municipal underwriting and became a member of the New York Stock Exchange in Through the historical challenges of the industry, such as the Great Depression, the late 1960s paper jam for the security firm industry, and the financial crisis of , Stifel Nicolaus has not only survived, but also thrived. Instead of merging with our competitors to stay afloat, or being forced to drop out of the industry, Stifel has positioned itself to successfully handle challenging times by maintaining a robust capital position approaching $2.0 billion, enabling us to provide our clients with a partner that can underwrite $5 billion of unsold securities at any point. Stifel Nicolaus has worked for many large issuers across the country for the last 120 years, including notable initial financings for the Michigan Mackinac Bridge and Chicago O Hare International Airport. More recently, Stifel Nicolaus has completed numerous important infrastructure projects for borrowers including Colorado Department of Transportation, the City of St. Louis, the University of Colorado, Cuyahoga County, Ohio, the Michigan Finance Authority, and the State of Texas, to name a few. Our dedication to our clients includes a long-lasting relationship that starts before the transaction and lasts beyond the closing date. At Stifel Nicolaus, we pride ourselves in standing out from our competition by offering our clients the versatility of tailored transactions that meet their unique needs, and the ability to ensure the lowest cost to the issuer every day. Putting the welfare of the clients and community first, we strive to be the banker of choice in our industry. Over 120 years of heading in the right direction towards success s s s 1990s 2000 present 1890 Birth of the company in St. Louis, Missouri 1920s Stifel provides financings for St. Louis leading companies and gains recognition and popularity 1958 Stifel Nicolaus joins the New York Stock Exchange 1960 Hanifen Imhoff founded in Denver, Colorado 1965 Celebration of 75th Anniversary 1970s Stifel grows from 13 offices to 23 while other firms reduce in size or went out of business 1983 Stifel Financial Corp. stock goes public (NYSE: SF ) 1990 Stifel s 100th anniversary 1996 Creation of enabling clients to access their own accounts 1998 Recognition of implementing industry-leading computer technology, providing clients with immediate market data 2005 Acquisition of Legg Mason Capital Markets; Stifel doubles capital markets operations 2006 Acquisition of Miller Johnson Steichen Kinnard, Inc. s private client group 2007 Acquisition of Ryan Beck and First Service Bank (renamed Stifel Bank & Trust) 2008 Acquisition of Butler Wick 2009 Stifel acquires 56 national offices from UBS Financial Services, Inc Fortune magazine names Stifel #25 on Fastest-Growing Companies list (#65 overall) Merger with investment banking firm Thomas Weisel Partners

4 Public Finance issuers Nationwide Coverage for Our Clients Stifel Nicolaus combines the national resources and distribution capabilities of one of the largest independent broker/dealers and investment banks in the country with the focused customer attention of a regional boutique. With public finance, research, and retail offices stretching from coast-to-coast, the firm feels the pulse of each region. The firm s bankers and traders understand the unique opportunities and challenges facing issuers. Stifel Nicolaus consistently ranks in the top 10% of over 300 companies providing underwriting services in the United States (Thomson Reuters, since 2005). Stifel Nicolaus maintains institutional sales offices in both national and regional financial centers around the country, including Denver, Atlanta, Boston, Chicago, Detroit, Houston, Kansas City, Los Angeles, Minneapolis, Brookfield, New Orleans, New York City, St. Louis, and San Francisco. Our broad geographic coverage allows Stifel Nicolaus brokers to focus not only on the large mutual bond funds, but on smaller and more active regional institutional buyers. With more than 300 offices across the United States, our unmatched presence provides issuers with access to local markets and buyers. Stifel Nicolaus provides public finance services to a variety of clients, including states, cities, counties, school districts, special purpose districts, housing authorities, utilities, and 501(c)(3) organizations. Above all else, Stifel Nicolaus is committed to finding the lowest cost of capital for our clients. Whether we represent a small rural school district or a large state agency, Stifel Nicolaus can creatively tailor financing solutions for your capital needs. Our bankers pride themselves on providing our clients the best in innovation, outstanding customer service, creative problem solving, and reliability and continued commitment every day. PUBLIC FINANCE OFFICES St. Louis, Missouri (800) Cleveland, Ohio (866) Columbus, Ohio (866) Denver, Colorado (800) New York City, New York (866) Okemos, Michigan (866) San Antonio, Texas (866) Wichita, Kansas (800) Brookfield, Wisconsin (877) Edwardsville, Illinois (888) As one of the nation s premier investment banks, Stifel Nicolaus combines the experience of seasoned and innovative public finance bankers with exceptional local and regional municipal bond distribution capabilities. Stifel Nicolaus maintains one of the strongest, most comprehensive distribution networks in the industry, coupled by coast-to-coast retail brokerage services for individual investors. The firm is one of the few major investment banks maintaining significant relationships with all market segments of bond purchasers, from local banks and individual investors to national and international firms with well over $1 billion in assets. The depth of our relationships and our ability to create a secondary market allows us to generate greater demand for your bonds, increase the liquidity of the investment, and reduce interest rates. Marketing Your Bonds Ranked as one of the largest brokerage firms in the United States and growing.

5 Notable Transactions Across the Country MICHIGAN Michigan Municipal Bond Authority Local Government Loan Program $38,245,000 The Michigan Municipal Bond Authority ( MMBA ) and its financing team led by Stifel Nicolaus created the first Michigan pooled financing of Qualified School Construction Bonds ( QSCBs ) and Qualified Zone Academy Bonds ( QZABs ). Pooling of these bonds required complex tax analysis due to Federal requirements. The transaction was completed based solely on the credit of a State Aid Intercept through the Local Government Loan Program School Program with an A+ rating and required no credit analysis of the individual school district participants. This differs significantly from the credit of most other QSCBs sold to date in Michigan that benefited from the enhanced AA- rating of the Michigan School Bond Loan Fund Qualification ( MSBLFQ ). This financing pooled six different school district borrowers and produced a True Interest Cost, inclusive of all costs, of 0.67% after the interest subsidy. The MMBA issue was the first of its kind and pioneered a new avenue to provide issuers alternative ways of financing their debt, especially through the unique programs offered through the American Recovery and Reinvestment Act (ARRA). NEW YORK Onondaga County, New York Property Tax Receivable Trust Taxable Certificates of Participation $13,300,000 Onondaga County, New York, selected Stifel Nicolaus to serve as Placement Agent for the sale of $13.3 million Taxable Certificates of Participation. This transaction helped the County monetize its tax liens for the years 2007 through Using historical and projected collection data, Stifel Nicolaus was able to structure a three-year bullet maturity for the Certificates. This structure allowed the County to use excess proceeds from delinquent real property tax payments, including interest and penalties, to pre-pay on the outstanding balance of the certificates; thereby, reducing the overall cost of borrowing. The County agreed to purchase any outstanding, unredeemed certificates at final maturity. Stifel Nicolaus worked closely with the County to secure a Fitch AA rating on the certificates. Ultimately, this aided in achieving the exceptionally low taxable rate of 3.50%. Stifel Nicolaus came up with a uniquely structured transaction that allowed the County to achieve its goal of monetizing the tax liens, while at the same time providing a structure that reduced the overall cost of borrowing. OHIO City of Columbus, Ohio Various Purpose General Obligation Bonds $413,200,000 Stifel Nicolaus was selected as the senior manager for the City s new money and refunding transaction, after serving as senior manager for the City of Columbus $251 million borrowing. The $413 million bond issue included 5 separate series for 28 different purposes; both limited and unlimited tax tax-exempt bonds, limited and unlimited tax Build America Bonds (BABs), a series of taxable bonds, as well as a term bond of $15 million designated as Recovery Zone Economic Development Bonds. Included in the tax-exempt series were approximately $57 million of refunding bonds. For the refunding portion, Stifel continually monitored eight outstanding series of bonds for refunding opportunities and provided weekly feedback on the amount of negative arbitrage present in the escrow. While the present value savings percentage on several series exceeded the 3 to 4% threshold, we did not recommend including any refunding series until the negative arbitrage, as a percentage of the savings amount, was below 50%. At the time of pricing, the refunding bonds generated almost 7% in present value savings and negative arbitrage of less than 25%. Stifel Nicolaus suggested that the City structure the BABs financing with as many serial maturities as possible and sell the bonds in a manner more typical for tax-exempt bonds with a par optional call, as well as an extraordinary redemption provision at par. By serializing the issue, as opposed to selling one or two term bonds, we shortened the break even maturity by five years, selling serial maturities from and receiving little investor pushback on the extraordinary par call. We managed a retail order period for the nine firm syndicate and sold more than $65 million to retail accounts. The aggressive retail pricing allowed us to take orders from institutions later in the day, and we successfully sold the balance of the bonds in the same day. We received orders from 52 institutional accounts, including 36 orders from second and third tier accounts. More than 60% of the BABs were sold to second and third tier accounts. This allowed Stifel Nicolaus to achieve spreads that were very aggressive to comparable Aaa/AAA/AAA transactions, as well as historical spreads achieved by the City. TEXAS Bexar County Hospital District Certificates of Obligation $246,395,000 Bexar County Hospital District (University Hospital) sold $246 million Certificates of Obligation Taxable Series (Direct Subsidy Build America Bonds). The recent sustainability and strength of the Build America Bond program prompted the Bexar County Hospital District to utilize this structure, which has saved issuers millions in interest cost since its inception. The bonds were sold through a seven-member syndicate, which Stifel Nicolaus was an 8% co-manager ($19.7 million liability). During the order period, Stifel Nicolaus placed orders for $62 million (more than 3 times our liability per the Agreement Among Underwriters) and received allocations of $56 million, almost 23% of the par amount of the bonds. Bexar County Hospital District sold its Build America Bonds in maturities from 2018 to 2039, with serial maturities from 2018 to 2013 and term maturities in 2028 and Stifel Nicolaus strong performance demonstrates the sales effort that its 195 person fixed income sales and trading team can provide our clients. COLORADO Colorado Educational and Cultural Facilities Authority Revenue and Revenue Refunding Bonds University Corporation For Atmospheric Research Project $27,485,000 The University Corporation for Atmospheric Research (UCAR) is a Colorado not-for profit corporation. It was organized in 1946 and has 75 member institutions, each of which grants doctoral degrees in the atmospheric and related sciences. The major activity of UCAR is the management and operation of the National Center for Atmospheric Research (NCAR) under an agreement with the National Science Foundation. NCAR is one of the premier atmospheric sciences research laboratories in the world. NCAR s research is designed to improve the understanding of the behavior of the atmosphere and its interaction with the sun and oceans, including climate change, severe weather events, and air pollution. The bonds were unsecured obligations of the Corporation and are not secured by any specific payment stream or assets of the Corporation. About half of UCAR s funding comes from the National Science Foundation. The bonds were rated A+/A2 and did not have a reserve fund. Due to the unusual nature of the borrower, Stifel Nicolaus felt that is was important to give our sales force and potential investors a chance to be briefed by representatives of UCAR on the organization and the project through a conference call and presentation. The uniqueness of the credit led to a slow initial order period and at the end of the period, Stifel Nicolaus underwrote an unsold balance of bonds of over 50%. We were confident that we had priced the bonds appropriately and that UCAR should benefit from these rates. We knew that with more time our sales force could distribute the bonds throughout the system. MISSOURI St. Louis Municipal Library District Recovery Zone Facility Bonds and Build America Bonds $65,000,000 The Library District serves the City of St. Louis, Missouri and currently consists of the Central Library (built in 1912), 15 branch locations of various sizes, and two administrative buildings. The Library District is consistently ranked among the top library systems in the nation. The Library placed second in 2009 in studies conducted by the Center for Public Policy and Social Research at Central Connecticut State University. The Library s core collections are comprised of approximately 870,000 volumes, more than a million federal, state and city documents, 950,000 vertical files, 650,000 microfilms, 15,000 CDs, 130,000 maps, artwork and original furniture dating from The Series 2010 A and B Bonds funded an approximately $75 million extensive rehabilitation designed to maintain the historical nature of the Central Library building in anticipation of its 100 year anniversary in The Central Library will be completely renovated and will feature a new auditorium with seating for approximately 240 people, new technology and a new entry lobby and atrium on the facility s north side. New mechanical, electrical, HVAC and other systems will be installed throughout the Central Library facility, and the building s wood work, stained glass and other original features will be restored. The Series A Bonds ($50,000,000) were publicly offered on June 23, 2010 and carry AA- ratings from both Standard & Poor s and Fitch. Simultaneously, the Series B Bonds ($15,000,000) were privately placed. The Library District was able to take advantage of two programs under the 2009 Stimulus Act and issued more than half of the Series A Bonds as Recovery Zone Facility Bonds and approximately one quarter of the Series A Bonds as Build America Bonds. A portion of the Bonds will be repaid primarily from receipts of the Library s $20 million capital campaign. Stifel Nicolaus served as the sole underwriter for the Series A Bonds and as the sole placement agent for the Series B Bonds.

6 We offer our clients dedicated and personalized service to reach their financial goals everyday. Stifel Nicolaus List of Client Services Financing Programs Certificates of Participation Fixed Rate Bonds General Obligation Bonds Lease Purchase Revenue Bonds Variable Rate Programs Key Business Activities Bond Underwriting Derivative Advice Research Financial Advisors Investment Banking Placement Agents Reinvestment Advice Capital Planning Election Services (applicable states only) Stifel, Nicolaus & Company, Incorporated member sipc and nyse