THE BOARD OF GOVERNORS OF THE COLORADO STATE UNIVERSITY SYSTEM REQUEST FOR PROPOSAL FOR UNDERWRITING SERVICES

Transcription

1 THE BOARD OF GOVERNORS OF THE COLORADO STATE UNIVERSITY SYSTEM REQUEST FOR PROPOSAL FOR UNDERWRITING SERVICES RFP # 1 May 12, 2015

2 SECTION I BACKGROUND, OVERVIEW AND GOALS The Board of Governors of the Colorado State University System acting on behalf of and for the benefit of the State of Colorado and its constituent institutions, Colorado State University Fort Collins, Colorado State University Pueblo, and Colorado State University Global Campus (the Board and its institutions are collectively referred to herein as the Board ) hereby request proposals from qualified firms to provide Underwriting Services to the Board. The Board wishes to obtain the services of a qualified firm(s) who have experience in the following areas: 1. Consolidated master system credits. 2. Development of a financing plan integrating a multi-year capital financing program. 3. Development of innovative project financing techniques. 4. Development of bond rating and credit enhancement strategies. 5. Understanding of all relevant statutory and regulatory issues. 5. Marketing and selling the System credit to a broad investor base. 6. Distribution capabilities both nationally and within the State of Colorado. Further information about the Board and its constituent campuses can be found at:

3 SECTION II ADMINISTRATIVE INFORMATION A. ISSUING OFFICE: This Request for Proposal is issued for the State of Colorado, Board of Governors of the Colorado State University System, by the Colorado State University System office. B. PURPOSE: This Request for Proposal provides prospective Bidders with information to enable them to prepare and submit proposals. Definitions: In the following Request for Proposal (RFP) the term Board shall be understood to mean The Board of Governors of the Colorado State University System and related staff acting on behalf of Colorado State University Fort Collins, Colorado State University Pueblo and Colorado State University Global Campus. The term Bidder, as used herein, shall be understood to mean the individual, company, corporation, or firm formally submitting a response to this RFP. The term Response, as used herein, shall be understood to mean a written offer to provide services in accordance with the general conditions, instructions, and specifications stated herein with exceptions clearly stated, and may be used interchangeably with the terms Proposal and Bid. C. SCOPE: This Request for Proposal contains the instructions governing the proposals to be submitted and the material to be included therein, mandatory requirements which must be met to be eligible for consideration, and other requirements to be met by each proposal. D. SCHEDULE OF ACTIVITIES: 1. RFP posted May 12, Prospective Bidders written inquiry deadline May 20, 2015 at 5:00 pm (MST) (No questions accepted after this date & time) 3. Proposal submission deadline May 27, 2015 at 3:00 pm (MST) 4. Short list established May 29, Short list presentations (if necessary) June 3-4, Recommendation finalized June 5, 2015 E. INQUIRIES: Prospective Bidders may make written inquiries by only concerning this Request for Proposal to obtain clarification of requirements. No inquiries will be accepted after May 20, 2015 at 5:00 pm (MST) or will any inquiries be received other than by . Inquiries should be directed to the following addresses: bridget.mullen@colostate.edu and steph@northslopecapital.com.

4 F. ADDENDUM OR SUPPLEMENT TO RFP: In the event it becomes necessary to revise any part of this Request for Proposal, an Addendum to this RFP will be provided to each Bidder known to have received the original RFP. G. PROPOSAL SUBMISSION: The proposal package must be received by or hard copy ( preferred) on or before 3:00 pm (MST) on May 27, It is the responsibility of the Bidder to ensure that the proposal package arrives at the designated or physical address shown below by this time. Colorado State University System th St., Suite 1550 Denver, CO Attn: Bridget Mullen (Phone: ) Secondary UNDER NO CIRCUMSTANCE WILL A TELEPHONE OR FAX BID BE ACCEPTED. FAILURE OF A COURIER, OVERNIGHT EXPRESS OR SIMILAR SERVICE OF THE BIDDER TO DELIVER THE BID PACKAGE ON TIME SHALL NOT BE GROUNDS TO CONSIDER A LATE BID. The Board reserves the right to reject any and all proposals and to waive informalities and minor irregularities in proposals received and to accept any or all portion of a proposal if deemed in the best interest of the Board to do so. Any restrictions on the disclosure or use of data and materials contained within a proposal must be clearly stated in the proposal itself with the indication of enclosed proprietary information clearly noted as stated in this paragraph. If proprietary information is submitted, it must be placed in a separate PDF or package. Due to the Colorado State University System s evaluation system for Requests for Proposals, the Board cannot sign non-disclosure agreements with any Bidder. H. RESPONSE MATERIAL OWNERSHIP: All material submitted regarding this RFP becomes the property of the Board and will only be returned to the Bidder at the Board s option. I. INCURRING COSTS: Notwithstanding any other statement, representation, or information acquired by a Bidder, the Board shall not be liable for any cost incurred by Bidders prior to the award of a contract. J. ADDITIONAL INFORMATION: No additional information should be submitted other than what is requested by this RFP. Additional information will not be considered in the evaluation of proposals. K. EVALUATION AND AWARD: All proposals submitted in response to this RFP will be evaluated by a committee of Board personnel and the Board s financial advisor, North Slope Capital. The CSU System plans to pre-qualify up to ten firms and will use a competitive RFP process on a deal-by-deal basis to determine its senior managing underwriter and other

5 underwriters, if any. This RFP submission will be used, in addition to pre-qualifying firms to serve in an underwriting pool, to select the underwriting team for the System s next offering, Series 2015E, expected to be issued mid-summer in the approximate amount of $165 million. The award will be made to Bidders whose final proposal, conforming to this RFP, will be the most advantageous to the Board, price and other factors considered. Due to the evaluation procedure for the Request for Proposal, lowest dollar price MAY or MAY NOT indicate the successful awardee. Price constitutes only one of several evaluation criteria. The CSU System is exempt from the State of Colorado procurement system. The Evaluation Committee will judge the merit of proposals received in accordance with the following criteria: A history and experience in the underwriting of tax-exempt and taxable transactions, and higher education transactions in particular Indication of a well suited marketing, sales and distribution network, with a preference for those with a Colorado Office Demonstrated ability to develop well thought out structuring alternatives Overall resources of the firm Experience of the personnel assigned to serve the System Proposed underwriting fees The Bidders selected will be the Bidders whose proposals are the most advantageous to the Board. Failure of the Bidders to provide in his/her proposal any information requested in this RFP may result in disqualification of his/her proposal and shall be the responsibility of the bidding individual or firm. L. STANDARD CONTRACT: The successful Bidders will enter into a contract with the Board and may be required to accept the provisions for doing business with the State of Colorado, labeled Special Provisions. Failure to accept the Board s standard contract provisions may result in cancellation of the award. Any contracts resulting from this RFP may be terminated in part or in whole by either party at any time without cause subject to 60 days written notification. M. PAYMENT TERMS: Complete payment by the Board will be made ONLY at the successful completion and closing of the bond transaction. N. TERM: Contracts will be year to year, except that a contract may be renewed without additional procurement annually for up to five years. The Board, in its sole discretion, may ask certain of the responding firms for supplemental information for the selection of an underwriter(s) for future transactions. Nothing herein precludes the Board from issuing any of its future debt issuances on a competitive basis.

6 O. ORAL PRESENTATIONS: Bidders may be asked to make an oral presentation to certain members of the Evaluation Committee. Such presentations, travel included, will be at the Bidder s expense. Such presentations may occur by phone or video conference at the Boards discretion. The Board reserves the right to hold discussions with Bidders who have been found to be in the competitive range. Such discussions may result in the Board conducting Best and Final Offers. P. SELECTION OF PROPOSAL: Notice of Award letter will be sent to successful Bidders. Q. AWARD OF CONTRACT: The award will be made to the responsible Bidders whose proposal, conforming to this RFP, will be the most advantageous to the State of Colorado and Colorado State University System, after consideration and evaluation of the criteria presented in this RFP. A contract must be completed and signed by all parties concerned. In the event the parties are unable to enter into a contract, the State and the Board may elect to cancel the Notice of Award and make award to the next most responsible Bidder. Selection does not ensure each successful bidder will be included in a particular bond deal. Inclusion will be based on qualifying bids for each deal. R. RFP CANCELLATION: Colorado State University System reserves the right to cancel this Request for Proposal at any time, without penalty.

7 SECTION III SPECIFICATIONS MINIMUM QUALIFICATIONS Proposals will be considered only from firms meeting the following minimum qualifications: 1. The firm has at least five years experience in public finance with demonstrated experience in higher education finance, preferably with state university systems. 2. The individual assigned as the principal representative of the firm has demonstrated experience in higher education finance, preferably with state university systems. 3. The firm has both the personnel resources and the capital base available for the transactions contemplated and to commence work immediately and in the timeframe required. 4. The firm is listed in the directory of Municipal Bond Dealers and Underwriters of the United States in the Fall 2014, The Bond Buyer s Municipal Marketplace. GENERAL REQUIREMENTS The selected underwriter will be expected to work with the Board, its representatives, the Board s financial advisor (North Slope Capital) and Bond Counsel (Kutak Rock). An unsuccessful working relationship with any member of the financing team will be cause for cancellation of the contract. The Board retains the right to cancel the contract in the event of changes of assigned personnel with the firm, or to transfer the services with the assigned personnel at its sole discretion. No payment for services will be made until the bond issue transaction is completed. EXPECTATIONS OF THE UNDERWRITER The firm(s) selected as underwriter will be required to provide a principal representative who will be involved in: 1. Assisting in the formalization of the financing plan with respect to the structure of a proposed debt offering; 2. Assisting in the development of a strategy of interacting with the rating agencies for the purpose of maintaining or improving CSU System s current rating; 3. Participating in the review of all legal and financial documents of the debt transaction; 4. Recommending a marketing strategy to sell CSU System s debt, including identification of prospective investors, preparation of presentation materials, investor meetings and conference calls, and other related activities; 5. Assisting in the identification of any financing risks and other issues that need to be brought to the Board s attention. 6. Providing timely advice regarding developments in the securities market; 7. Providing current information on innovative project financing techniques and their application to the Board s debt issuance.

8 SECTION IV INFORMATION REQUIRED FROM RESPONDENTS Cover Letter Proposals should be accompanied by a one page cover letter of transmittal. Please provide responses to the following questions in the order they are presented. Concise answers are desired. Please adhere to the designated page limit for each section. Information presented in the exhibits does not need to be counted toward the page limits. General (2 page limit) 1. Please provide a brief introduction to your firm. 2. Indicate your firm s strengths. State your firm s total capital, equity capital and excess net capital as of the close of your most three recent fiscal years. Discuss your firm s willingness and ability to commit capital to underwrite issues of significant size. Describe your firm s maximum underwriting commitment for any single issue in the last year. 3. Please provide quarterly data for 2014 on your firm s trading volume and inventory of taxexempt securities. If possible, break out the firm s position in Colorado paper separately. 4. Any exclusion to this RFP must be identified in this section. Personnel and Organization (2 page limit) 1. Describe the individuals in your firm who will work with the Board on its financing. Include their relevant professional experience and their respective responsibilities in the financing. 2. State the person who will be responsible for the day-to-day management of the financing, and his or her contact information. 3. Provide at least three higher education client references (including name, title, and telephone number) for the day-to-day contact person. 4. Describe any staffing, organizational or ownership changes which the firm and, in particular, the public finance department has undergone in the past 12 months, if any. Disclose any changes that are expected to occur within the next six months that would affect the level of commitment of your firm to the public finance business. Financing Experience (4 page limit) 1. Provide a summary table of higher education transactions (indicate negotiated or competitive sale) completed by your firm as underwriter since January 1, Please include total number of issues and aggregate par transacted in each year as senior manager and co-manager. 2. Supply three case studies for recent, innovative higher education financings underwritten by your firm that may be of interest to CSUS. 3. Offer any observations or recommendations regarding the System s debt portfolio including structure, mix of fixed and variable, refunding opportunities or other creative financing ideas. Marketing, Sales and Distribution (3 page limit) 1. Describe what you see as an appropriate mix of buyers (retail and first, second, third tier institutional investors) for a 30 year fixed rate $165 million issue rated Aa3 / A+ ( Aa2 / AA- State Intercept Rating). Provide a brief summary of how your firm would pre-market such an issue to the target market.

9 2. Discuss current municipal bond market conditions, including your firm s approach to pricing in volatile markets and where you believe the System s bonds would price today, relative to the MMD index and relative to its financing earlier this year. Proposed Fees (1 page limit) 1. Indicate your proposed fee structure for a $165 million fixed rate financing (assume an 80% tax exempt and a 20% taxable mix and a 30-year final maturity) including takedown for tax-exempt and taxable bonds, management fee (if any) and expenses. Please indicate where the underwriting desk that would price future System financings is located. 2. Please note that no compensation will be due or payable to the selected underwriter(s) until such time as the bonds close. If the bonds do not close for any reason, there will be no payment due to the selected underwriter. Please confirm in your proposal that you understand and agree to these terms. Conflict of Interest and Regulatory Investigations (no page limit) 1. Describe any material relationships that your firm or any firm employee has with any party or firm that may create a conflict of interest, or the appearance of a conflict of interest, if your firm is selected as senior manager or co-manager. 2. Describe (a) any investigations, cases or actions against the firm by the United States Securities and Exchange Commission or other federal or state regulatory body regarding the conduct of your firm or its management since January 2009, including its status or disposition, and (b) any litigation since January 2009 against your firm or individuals associated with the firm relating to its management or its investment banking or public finance activities. Did your firm file MCDC submissions with the Security and Exchange Commission? Could any of these directly or indirectly affect your role as senior manager or co-manage