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File #: 2018-779    Version: 1 Name:
Type: Resolution Status: Filed
File created: 5/22/2018 In control: Board of Directors
On agenda: 5/23/2018 Final action: 5/23/2018
Title: Pre-approved Underwriter Pool Proposal Update Request for the Potential Refunding and New Money Transactions
Sponsors: Nicolette Bateson
Indexes: Finance
Attachments: 1. 6.27.16 GLWA Board Meeting Minutes- Underwriter Selection

Title

Pre-approved Underwriter Pool Proposal Update Request for the Potential Refunding and New Money Transactions

Body

 

Agenda of:                      May 23, 2018

Item No.:                     2018-779

Amount:                     N/A                                                                                                                                                                                                                                       

 

TO:                                          The Honorable

Board of Directors

Great Lakes Water Authority

 

FROM:                     Sue F. McCormick

                                          Chief Executive Officer

                                          Great Lakes Water Authority

 

DATE:                     May 22, 2018

 

 

RE:                     Pre-approved Underwriter Pool Proposal Update Request for the Potential Refunding and New Money Transactions

 

 

MOTION

 

Upon recommendation of Nicolette Bateson, Chief Financial Officer/Treasurer, The Board of Directors (Board) of the Great Lakes Water Authority (GLWA), approves the proposed approach for the underwriter solicitation as presented and directs the Chief Financial Officer to take the necessary actions to distribute the underwriter solicitations to the 10 underwriting firms in accordance with the June 27, 2016 GLWA Board directive.

 

BACKGROUND

At its meeting on June 27, 2016 (meeting minutes included), as part of the underwriter selection process related to its inaugural 2016 bond transaction, the Great Lakes Water Authority (GLWA) Board of Directors (Board) approved the following list of ten (10) firms that were deemed qualified to act as senior managing underwriters for subsequent GLWA bond issuances:

                     Barclays Capital, Inc.

                     Citigroup Global Markets, Inc.

                     Goldman Sachs & Co.

                     JP Morgan Securities LLC

                     Morgan Stanley & Co.

                     Piper Jaffray & Co.

                     PNC Capital Markets

                     Ramirez & Co.

                     Siebert Brandford Shank

                     Wells Fargo Securities

 

Furthermore, the GLWA Board directed that in the event of a subsequent bond issuance, the Chief Procurement Officer shall:

1) Convene an evaluation panel to interview and review the qualifications of each of the ten (10) firms listed below to serve as Bookrunning Senior Managing Underwriter or Co-Senior Managing Underwriter for that issuance; or

2) Issue a Request for Proposals (RFP) to select a Senior Managing Underwriter(s) for that transaction.

 

JUSTIFICATION

GLWA is seeking updates to the proposals submitted by the underwriter pool pre-selected by the GLWA Board of Directors on June 27, 2016.  This proposal update shall provide financing recommendations and information for the potential refunding of certain GLWA water and sewer system series of outstanding bonds and new money for the sewer system of the Detroit Water and Sewer Department (DWSD). The refunding component generally contemplates the current refunding of selected GLWA series bonds that have call dates of July 1, 2018 but may also consider current taxable advance refunding of other savings candidates with 2019 (or later) call dates.

Proposed Transactions: The outstanding GLWA bonds for the water and sewer systems that are the focus of the refunding plan total approximately $178 million for the water system approximately and approximately $190 million for the sewer system.  These include the current refunding of Series 2001C second lien bonds of the Water System, the current refunding of the senior lien 1998A, 1998B, and 2001 C2 Sewer System Bonds, as well as the potential taxable advance refunding of the senior lien Series 2001 C1 Sewer System Bonds.  Additionally, GLWA has been notified by DWSD that it will need GLWA to issue approximately $75 million of new money sewer bonds on its behalf.

Proposed Process:  GLWA, through its Procurement Department, will send out the underwriter solicitations to the list of 10 qualified underwriting firms.  The firms will have almost 2 weeks to submit their responses to GLWA.  After the responses are received, PFM will provide its analysis on the responses received and the summary and responses will be scored by the evaluation panel.  Oral interviews will be conducted with all underwriting firms that submit responses to the solicitation, in accordance with the Board’s directive.  Once the oral interviews are held and the final scoring is tabulated, GLWA management, along with its registered municipal advisor, Public Financial Management (PFM), will present the recommendation of the evaluation panel to the GLWA Audit Committee for further recommendation to the GLWA Board.

Proposed Evaluation Panel: The evaluation panel will consist of 3 members from GLWA and 2 members from DWSD.

Proposed Time Schedule: Below is the proposed time schedule for the underwriter solicitation process.

 

 

 

COMMITTEE REVIEW

This matter was reviewed by the GLWA Audit Committee at its meeting on May 22, 2018. 

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SHARED SERVICES IMPACT

None