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Stadium Underwriter RFP

Stadium Underwriter RFP

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Published by Tim Nelson
Minnesota seeks bond underwriter to issue stadium debt.
Minnesota seeks bond underwriter to issue stadium debt.

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Published by: Tim Nelson on Sep 23, 2013
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03/18/2014

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1
REQUEST FOR PROPOSALS FOR UNDERWRITING SERVICESSTATE OF MINNESOTAMINNESOTA MANAGEMENT AND BUDGETAPPROPRIATION BONDS
 I.
 
 Introduction
The State of Minnesota (the
State
) is seeking proposals from financial institutions to provideunderwriting services related to the issuance of bonds to secure up to approximately$498,000,000 in net proceeds to (i) provide financing of a portion of the costs of acquisition,
construction, improving and equipping of the stadium project (the “Project”
) of the Minnesota
Sports Facilities Authority (the “Authority”) as provided by Minnesota Statutes, Chapter 473J
, to be located in the City of Minneapolis, Minnesota, and (ii) to fund the payment of capitalizedinterest on such bonds and the payment of issuance costs relating to such bonds.The State is interested in receiving proposals for underwriting services related to the proposedfinancing. The financing is expected be executed in more than one transaction over a period of approximately two years. Each transaction may include tax-exempt and/or taxable bonds andmay be sold on a competitive or negotiated basis. By the issuance of this Request for Proposal
(“
RFP
”), the State is not obligating itself to issu
e the appropriation bonds. From the responsesreceived from this RFP, the State will create a pool of underwriters to assist with one or more of these transactions as or if needed.
 II.
 
Timetable
Requested information is due by Wednesday, October 9, 2013 (4:30 PM Central Time).
 III.
 
 Bond Authorization
The Commissioner 
of Management and Budget (the “Commissioner”)
is authorized under Minnesota Statutes, Section 16A.965, to issue and sell general fund appropriation bonds (the
“Bonds”)
of the State from time to time in one or more series on the terms and conditions theCommissioner determines to be in the best interest of the State, in such principal amounts, not to
 
2exceed $600,000,000 in the aggregate, that, in the opinion of the Commissioner, are necessary to provide sufficient funds (net of funds to be applied to certain costs as provided by subdivision2(b) of Minnesota Statutes, Section 16A.965), not to exceed $498,000,000 in amount for achieving the purposes authorized as provided in subdivision 2(a) of Minnesota Statutes, Section16A.965, including, in particular, to pay costs of the Project.
 IV.
 
 Bond Security
The Bonds are not public debt of the State subject to constitutional limitations on indebtedness,and the full faith, credit, and taxing powers of the State are not pledged to the payment of theBonds or to any payment that the State agrees to make under Minnesota Statutes,Section 16A.965, and this Order. The Bonds shall be payable in each fiscal year only fromamounts that the legislature may appropriate for debt service for any fiscal year, provided thatnothing in Minnesota Statutes, Section
16A.965, (the “Act”) and the Order 
shall be construed torequire the State to appropriate funds sufficient to make debt service payments with respect tothe Bonds in any fiscal year.
V.
 
 Ratings
The State maintains long term ratings on its general obligation bonds which ratings are currently
“Aa
1
” by Moody’s, “AA+” by S&P and “AA+” by Fitch.
In addition, the State has long term
ratings on its appropriation bonds which are currently “AA” by S&P and “AA” by Fitch.
 
VI.
 
Other Financing Team Members
Public Financial Management is serving as the financial advisor for this transaction (the
“Financial Advisor”)
. Kutak Rock LLP will serve as transaction/bond counsel
(the “BondCounsel”)
. As directed in Section VIII, all questions must be directed only to the FinancialAdvisor.
VII.
 
Form and Content of Proposal 
Firms may submit proposals to serve as senior manager for the Bonds, co-manager or anycombination thereof. If proposing only as a co-manager, firms need only complete Sections A,B, D and E. Proposals must address the following items in the following order.
Responses mustbe limited to a maximum of 20 one sided pages in a 12-
point font, not including the firm’s
cover letter, brief resumes and any appendices provided in response to questions B1, C1,C3 and D and E. Efforts should be made to provide clear and concise responses.A.
 
Firm Background and Staffing
1.
 
Provide a general description of the firm and its relationship to any parent company.
 
32.
 
Identify the key staff responsible for this engagement and their respective roles.Indicate who would serve as the primary contact for the transaction. Detail theexperience of each key staff member specifically as it relates to the issuance of appropriation bonds and the other transactions of the State. Brief resumes may beincluded as an appendix to the proposal.3.
 
Provide an affirmative statement indica
ting the firm’s ability to meet the State’s
timeframe for delivery of funds.4.
 
Comment on the marketing and distribution capabilities of your firm nationally and inMinnesota. Identify the number and location of your Minnesota offices, if any,noting the number of retail brokers and institutional salespersons at each location.
B.
 
Experience and Perspective
1.
 
Identify similar appropriation bonds that your firm has underwritten for other governmental clients: 1) within the last five years; and 2) over the last ten years. If key personnel previously worked at another firm where they had substantialresponsibility for underwriting appropriation bonds that experience may be included but such experience must be clearly delineated and the firm at which it was completed provided. A detailed list of such transactions may be included as an appendix.2.
 
Briefly describe your 
firm’s experience serving as book 
-running senior manager, co-senior manager and co-manager for bonds issued in Minnesota over $100 millionsince January 2009.3.
 
Describe the approach your underwriting desk would use to introduce the Bonds tothe market, including retail customers in Minnesota and nationally. Describe your firm's retail and institutional marketing network for municipal bonds. Describe thelikely distribution for the State's bonds: retail, institutional, and in-state versus out-of-state. Specifically address the marketing strategy for Minnesota retail. Further,discuss whether different takedowns should be used for retail and institutional pricing. Please recognize that these are general fund appropriation bonds of the Statewhen responding to the question.4.
 
The State encourages firms to be ac
tive in supporting the State’s competitively issued
 bonds and outstanding bonds in the secondary market, as well as keeping the Stateabreast of changing market dynamics, refunding opportunities, suggestions of financing options, etc. Please discuss your 
firm’s support of the State’s competitive
sales, as well as secondary market activity of State bonds, since January 2011. Please
also include a summary your firm’s outreach to the State or its
Financial Advisor since this time, such as providing market updates, suggesting refunding opportunitiesand strategies, informing of changes in federal stimulus programs, and other relevantinformation.
C.
 
Financing Plan and Fees
1.
 
The State is still collecting information to determine the tax status, specific size or term of the transaction and structure expected to be sold. Describe a plan of financefor this initial bond issuance assuming approximate proceeds of $250,000,000.Delineate the differences in approach for a tax-exempt issuance versus a taxableissuance including recommended call provisions. Discuss whether the plan of financewould differ for a 20-year versus 30-year transaction. Please complete Attachments

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