Title
Replacement of Liquidity Agreements for the Variable Rate Utilities System Revenue Bonds, 2008 Series B and 2012 Series B, approval of Reoffering Memorandums related thereto, and extension of Credit Agreement for Utilities System Commercial Paper Notes Series D. (B)
**This item was presented to the UAB on 5-17-17.**
Explanation
On January 28, 2008 the City adopted Resolution No. 070862 authorizing the issuance of $90,000,000 of 2008 Series B Variable Rate Utilities System Bonds. In conjunction with the issuance of the bonds, a Standby Purchase Agreement (SBPA) was entered into providing liquidity support for the issue.
The current version of the SBPA expires July 7, 2017. The provider of the agreement, Bank of Montreal, has decided to exit this line of business in its entirety. To replace this agreement the City, through its Financial Advisor, Public Financial Management (PFM), solicited proposals for an alternate Credit Facility. Nine banks responded to the Request For Information (RFI):
Bank of America
U.S. Bank
Barclays Bank PLC
State Street
Sumitomo Mitsui Banking Corporation
JP Morgan
RBC
Citi Bank, and
Wells Fargo
Based on a review of evaluative criteria including but not limited to facility fees, proposed term, long- term and short- term bank ratings, trading history and performance of the bank and other fees and expenses, Barclays Bank PLC was selected as the best responder.
Over the next nine months GRU has two additional liquidity facilities set to expire: a Letter of Credit Agreement provided by State Street Bank on our Utilities System Commercial Paper Notes, Series D that expires on August 28, 2017 and a Standby Letter of Credit Agreement provided by Sumitomo Mitsui Banking Corporation, acting through its New York Branch on our Variable Rate Utilities System Revenue Bonds, Series 2012 B that expires by its terms on January 12, 2018. Given the favorable pricing numbers we received through the Series 2008 Series B...
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