REPSONSE TO: REQUEST FOR PROPOSAL for UNDERWRITING SYNDICATE CITY PUBLIC SERVICE BOARD inst SOUTHWEST COMPANY 711 Navarro, Suite 320 San Antonio, Texas 78205 March 9, 20012 FasrsoNsTCONeNN Siler Ve Print ‘March 9, 2001 Mr. Richard Williamson Director of Finance City Publie Service : 145 Navarro San Antonio, Texas 78205-2986 Dear Rick: First Southwest Company is pleased to respond to your Request For Proposal for Underwriting Syndicate for City Public Service Board (“CPSB") for the purpose of providing professional underwriting services in the issuance of the contemplated debt. First Southwest Company has extensive experience in underwriting Texas tax-exempt and taxable bonds. ‘Over the last ten years we have enjoyed our relationship with CPSB and look forward to continuing to serve CPSB in the future, As a current member of the underviting syndicate we have assisted in underwriting, ‘over $2,500,000,000 in bonds. First Southwest Company has a deep commitment to providing quality investment banking services to South ‘Texas. We have had an office in San Antonio since 1962. First Southwest Company's utilization of the team" concept also ensures that CPSB will receive comprehensive, timely, and quality service. First Southwest Company appreciates the opportunity (o present our qualifications and we look forward to ‘meeting with you, your staff, and your Financial Advisor regarding this proposal. In the meantime, if we ‘can answer any questions or be of further assistance, please feel free to call us at (210) 208-9700, Sincerely, as Raul Villasenor RVivam, nvesTMenT BANKERS SINCE 1946, ite 320 + San Antoni, Texat 78205-3501 + 210-208-9700 » Fax 210-229-1233 + rillarenor@frssacom ‘Travie Park Placa «711 Navarro +City Public Service Response to Request for Qui ‘TABLE OF CONTENTS Page ‘State whether your firm is sécking to serve in one of the senior manager positions or as a.co- 1 ‘manager. First History, Background, Experience and Team Members 1 Financing Techniques / Ideas 1s Financial Condition 7 Bond Experience 18 References 19 ‘San Antonio Presence 20 Regulatory Compliance Issues and Litigation History 2 ‘Third-Party Consultants 2 Exhibits 1 Audited Annual Report 2. Focus Reports FissionCity Public Service Response to Request for Qualifications for Underwrit First Southwest Company's Role First Southwest Company (“FSC”) is very much interested in a position as a Co-Senior Manager of the undervaiting syndicate to be selected by City Public Service (“CPS”), FSC and members of the firm’s San Antonio office have been involved in the financings of CPS for over ten years. Since 1993 the firm has been an active participant of the syndicates that have underwritten over $2,500,000,000 in tax-exempt bonds for CPS. As a co-senior managing undervriter FSC can have a more active participation in the structuring and implementation of financings for CPS. B. Firm History, Background, Experience, and Team Members FSC was founded in 1946 and has provided financial advisory and underwriting services continually for 55 years, The firm is a fully diversified investment banking firm, providing full service to its clients in the areas of ublic finance, asset management, financial advisory services, arbitrage rebate compliance, trading and underwriting of debt and equity securities, continuing disclosure and other related investment banking activities. FSC is headquartered in Dallas, Texas with 13 additional offices in four states including Texas, Arkansas, California, and Florida, FSC has been committed to public finance since the firm was founded and is recognized as one of the leading firms to public entities in the nation. FSC provides continuously updated and highly specialized knowledge of the public banking field and the sccurities industry. We have dedicated much of our resources to the development of services specifically designed to meet the needs of public entities. This assures our clients that their finances are handled economically, effectively and efficiently We arc confident that our experience qualifies FSC to provide underwriting or other investment banking. FSC is the largest privately held Texas headquartered regional investment banking firm, with employees holding, majority ownership. The firm’s principal trading and underwriting desk is located in Texas at the corporate headquarters in Dallas, Texas. Since a group led by Hill A. Fei 1991 acquired controlling interest, the firm has grown significantly in terms of capital, personnel and services offered. While many investment banking firms are currently eliminating for reducing their public finance departments, FSC’s commitment to excellence and financial strength has enabled the firm to maintain an aggressive expansion strategy. FSC currently has 253 total employees. Of this total, the firm has 120 registered representatives including 60 investment bankers working exclusively in public finance. In addition to the expansion described shove, on February 1, 1996, FSC purchased Masterson Moreland Sauer Whisman, inc, CMMSW"), a regional investment banking firm based in Houston, Texas, MMSW was the teading Houston based firm, which specialized in municipal finance. MMSW was ten years old, with more than ‘$4 million in capital, In calendar years 1993 to 1995, MMSW served as financial advisor on 174 transactions ‘equaling $4.7 biltion in par amount. Page 1 z - RT CHES CONEYCity Public Service Response to Request for Qualifications for Underwriting Service ‘A. Number and description of offices in the United States. First Southwest Company has 14 offices located throughout the United States. In addition to our {en Texas offices, we have offices lacated in Miami, Florida; Orlando, Florida; Los Angeles, California and Fayetteville, Arkansas. At this time, the firm has 120 registered representatives, ‘including 60 investment bankers working exclusively in public finance. We have 18 institutional {ales professionals, 7 high net worth individual account personnel and 14 traders/underwriters. ‘This total sales force of 51 ensures that a client’s bonds and notes get the attention needed for successful pre-markcting and distribution. In addition, we serve as clearing agent for more than. 40 brokevdealer firms throughout thc nation. These firms, which employ well over 1,000 registered representatives, have continuous access to our municipal bond inventory via the Internet and direct communications and provide additional retail distribution strength to our ‘marketing capacity. A 4 Fleet Soutnmest Company 11 Ne Hn St tea eng tia ower gd ones 40 Clearing Correspondent 5 0m pegoet Reais FrcmercuentCity Public Service Response to Request for Qualifications for Underwriting Services _ BRTEHB 402 Cypress, Suite 707 Abilene, Texas 79601-5123, Phone: (915) 672-8432 (609 Sheffield Drive Longview, Texas 75605 Phone: (903) 757-2077 TAUStin cc eS AngeIeS 98 San Jacinto Boulevard, Suite 370 Austin, Texas 78701-4039 Phone: (512) 481-2000 1700 Wilshire Bivd., Suite 215 Los Angeles, California 90048-5112 ee iiton 5 Phone: (323) 634-1544 TT 2614 Oak Ridge Drive Clifton, Texas 76634-1159 Phone: (254) 675-3552 1001 Main Street, Suite 802 Lubbock, Texas 79401-3322 Phone: (806) 749-3792 En SMGAilen: 1700 Paeife Avenue, Suite 500 Dallas, Texas 75201 Phone: (214) 953-4000 730 Nolana, Suite 229 McAllen, Texas 78504-3090 Phone: (956) 686-0991 38 West Trenton Blvd. Suite One Fayetteville, Arkansas 72701-3497 Phone: (501) 973-9138 ‘One Biscayne Tower, Suite 1890 2 South Biscayne Boulevard Miami, Florida 33131-1808 = (305) 371-8005 Short Wart 201 Main Street, Suite 1320 Fort Worth, Texas 76102-3123 Phone: (817) 332-9710 Houston 651 Bryn Mawr Street Orlando, Florida 32804-4427 333 Clay Street, Suite 4000 Houston, Texas 77002-4102 Phone: (713) 651-9850 TIL Navarro, Suite 320 San Antonio, Texas 78205-1721 Phone: (210) 208-9700 Page