ESD Bond Finance Committee 11/14/2014 11:00 AM

11/17/2014: Meeting of the Bond Finance Committee of the New York State Urban Development Corporation d/b/a Empire State Development.

I like to call to order this meeting of the bond finance committee of the empire state development today we’re seeking authorization to submit an application to the public authorities control board we are also requesting the committee’s approval of the appointment of bond counsel in connection with the proposed issuance of the state income tax revenue bonds series

2014 the bonds are authorized by multiple project tax as amended and supplemented related appropriation acts as amended and supplemented and tax and the tax revenue act pursuant to the project at utc is authorized to assist in financing certain correctional facilities economic development projects housing transportation projects various capital and equipment projects

In addition you can see may issue bonds to refund previously issued bonds by the corporation and other state entities in accordance with state finance law you to see intends to issue one or more series of revenue bonds pursuant to a general resolution of the corporation entitled state personal income tax revenue bonds general purpose general resolution the bonds

Will be issued as fixed rate debt an amount not to exceed one point five five billion dollars including bonds to pay the cost of issuance in connection with the sale it is anticipated the bonds will be issued on a competitive basis during the first week of december the bonds will be sabet special obligations of the corporation and will be payable from and secured

By amounts payable to the corporation by the state acting by and through the division of budget pursuant to a financing agreement between the corporation in the state we are also requesting approval for the appointment of harris beach pllc to serve as bond counsel and that lewis the monday llc be appointed as co bond counsel harris beach has not served upon as

Bond counsel since 2010 this is a large transaction financing numerous projects requiring experienced counsel and extensive tax due diligence harris beach has substantial pit bond experience and lewis a monday llc is a certified mwbe the appointment of the firm’s represents an equitable distribution of the work among esd’s rotating slate of firms to handle the

Corporation’s appropriation debt in terms of size of the transaction fees received length of time since our last engagement and total number of transactions right now we’re looking to issue the bonds competitively on thursday december fourth the forward issuance calendar right now is getting full with other state issue is we have slotted out that week and we’re

Pretty confident that you know there’s no one else that’s going to come to market we’re also you know being very cognizant of any other states or any other entities that might come but right now we feel december fourth is a good time for us when you say other state funny is that alabama and yeah it could be sometimes we get distracted by california’s all these

Other states with industry know within the state we know exactly who’s coming okay and we’ve already worked the calendar so that we have the week of the first week of december when i can have any competition with other state issuers so we’re on a very tight schedule here you know we have a lot to do to make the obligation the tax diligence has already started

And and brendan healy and jared waka wits from oil loans and grants area is handling the due diligence on the economic development projects and once we have that information which we’re hoping to get this week we’ll know exactly the components of the taxable and the tax exempt of the bonds i’m going to finance what we plan to do is on december fourth we’re going

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To go out we’re going to combine that the new money tax exempt peace with the refunding piece and sell that as one series and then we’re going to sell the taxable piece as another series the neumeier’s why is one of the total is 1.55 yeah but its split between taxable and nontaxable and example what are the tax exempt it is x and the tax taxable is why right yes

Now yeah when idea what the numbers are yet we do on the last yeah back in the last page okay thanks and that that with all the projects that were we plan to issue for what we don’t know right now is you know what’s going to be the tax ball in the tax exempt that due diligence is happening this week and once that is done so we’ll know what the size of the taxable

Will pity what is it safe to say i just too i know if they’ll need more details rob before coming but you know it’s possible that an issuance on behalf of the buffalo bills right could be taxable direct you know oga state buildings are like would it be tax exempt right that’s absolutely for a beneficiary of the issuance is you know in the eye and the eyes of the

Irs a taxable entity i suspected yeah the state municipal facilities program wouldn’t be tax-exempt right commercial facilities and state buildings and only that’s another attractive would be no in your genome center may be nice but not for profit so it probably is a lot of this robert is the young irs rules so it’s it’s not always a motive it looks like it’s for

Tax-exempt it does most likely it will but you know what we’re going through that do you do those is to a separate piece of system xn and to go back to the the issuance we’re going to subdivide the new money tax exempt and they’re refunding into two tranches so that you know we’re going to divide that up to buy their maturities one tranche will be maturities up to

Ten years and the other tranche will be 11 years old longer and the reason we’re doing this over on the fourth will be doing four tranches and we’re making the amount sizable that the market the investors can s them and we’ll get best bits for the best bids for the tron just three tranches and right now some indicative viewers yields some very preliminary indicative

Yields that we’re looking at the taxable is going to be 2.62 percent and the tax-exempt will be 3.3 for now the reason why the tax-exempt is a little bit higher is because the average life of the taxable is 3.4 years whereas the tax-exempt goes out longer 11.5 years what what it opens what’s the rape three-point what we’re looking at these are indicative yields

Right now the taxable will be 2.62 and the tax-exempt will be 3.34 and the maturity on the taxable robbers how much we keep that short we keep it within probably you know the average life is like five years and we do that because the coupon is high so we want to pay that off faster since this is the state supported debt issuance who the lower you just said it was

2.6 on yeah it detachable is lower the taxable is 2.6 and then attacks exam really well under where you are an e-mailed curve yeah it’s the term so yeah seen this romanian matters is the lens days filming list right now oh one other time what as jonathan said if the term was the same then obviously the tax exempt would be less expensive than the taxable but what

Robert is taking you through is a longer term okay first a shorter term one since this is state-supported debt we are using public resources advisory group as a financial advisor but that’s going to be under the contract between them and the division of budget so it will be coming back to you within a couple weeks to get authorization for the sale of the bonds or

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We’re here today is to ask for authorization to submit the application to the public authorities control board you know and i thought to make a decision about council and yet you’re absolutely right to make decision about council so those are really the two things we do that’s what you’re i have an observation rob and then a question the observation is i think we

Should pause and recognize that over the weekend we had the news of jim laban tall’s passing were not for mister laban thal if someone could say there wouldn’t be the sort of general awareness and market and existence of this entire fond of you know for a form of raising public finance for public purpose projects as there isn’t a state they had the honor of meeting

Him with diana back in may and he really i mean this is over yesterday papers and you know people have pointed out he was really the father of oakland is dead mobo talking about that’s the observation we should we should recognize his great work the question is this is going to be a competitive sale who are who’s how we can identify underwriters or is that happened

Already know what’s going to happen is the week before prag who is a financial advisor will be calling all the under eyes all these seniors that we have on our proofs late right there are going to be notified that this is coming to market you know the we’re going out with a preliminary official statement that’s going to be out there the underwriters know that this

Is coming it’s already posted on the web sites that you know we’re coming to the market so we will do enough you know marketing for the bonds that call the banks on wall street know that you know if we’re coming to the market and we expect them to bid no it’s a good that that’s a good process i i asked and because you know rob i’ve asked this question before when

It is a competitive when it’s when the issuance is on a competitive basis it sometimes can be harder for our end for the smaller mw firms underwriting firms here to compete for the work again this was one of my many lessons from francis we spent a lot of time on this with do bee d of the often pushes back when we raise this issue if you don’t have put in those

Exact terms different look but but you get the general concept here the general we have the zipper view what is you know i just want to go on record saying that if this is going to be issued on a competitive basis we have to work with dob and our advisors and make we effort to get mw firms into the underwriting activity mhm we just did a huge issuance as you all

Know through goldman sachs that’s good oh these are great you know these are great firms but that is not fulfilling our economic development mission or the governor’s new state at mw years old of 30 percentage and so before our next meeting i’ll come back to you with get some more practical considerations here but i think we have to pause and say we’ve got to make

Sure we haven’t dissent only this is our only revenue bond we’ve done this year right that’s correct i mean one issuance you know and if it goes to so sort of the usual suspects right that’s not appropriate right we do have language before the bonds are priced we go out with the notice of sale we have language in the notice of sale that you know we encourage the

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Banks to partner up with mwbe firms because you know when we get the bids will see the large banks come in with their bids but behind the scene they could have partnered up with an mwbe we had ramirez come in to see us the other day and ramirez said to us that you know they’d normally do parton up with a large firm and they said citibank however you know this is

Really transparent to us and you know your point is very valid can it that you know since it’s if they want a negotiated bases ramirez could lead it yeah absolutely yes we would make sure that we would have and we discussed that with dod but they’re directionless to do this is some type of sex and i just i disagree and histories of god prices mo story mm-hmm

All right counsel you do have an mdm good that’s good mm for the deaf a financial cause a partner on walls yeah in development no but we know who makes the real money absent to have billion-dollar issuance okay just less less time committee will meet again to approve the final final documents and to delegate authority to an officer to accept whatever pricing we’re

Able to get right and if there’s a way to communicate to do be none of this is fair or not but i won’t vote to approve that unless there’s satisfactory participation of mwbe firms in this you don’t need my vote necessarily evening right all right why don’t but listen i can put our heads together about what’s the strategy for as long as the obs interesting you to

Be a competitive sale then somebody you know you’re going to have to do an awful lot outreach and make it really clear i don’t know how you do that you know again within the law but make it really clear to the bidders that at least one person here just looking i mean i know you are too but that we’re looking for that and you and i should talk about the deal be the

Broader dob issue yeah yep all right two big n’ton what good p it last question what’s the date of the pa-c beating at which you it’s wednesday this one’s okay just to remind guy everybody anthony and rob wife were really grateful to you for coming out and around the afternoon we need to do this vote now on the issues related to move forward okay so is he coming

Out regardless of this deal so thank you i’m getting soaked for several although i’m honored to be so anybody else have questions or comments for rob or the team because i know the real issue is approval to go before pa cb and approval to learn how you once your two law firms tool offers room yes there as its votes are how do you want to do that noble like i can

Just say is there a motion to adopt a resolution sarka secular so the motion is passed we didn’t grow okay i but i’ll do it ok this is what you have to do these meetings can if you know i’ll be the nursery oh ok well i want to hear anthony say he’s in favor i’m a favor woman all right you know i arrived here all right i mutt motion carries you’re drunk yeah moves

We done rob margaret we got it all ha i believe we got all done you’re only being a jerk i don’t

Transcribed from video
ESD Bond Finance Committee 11/14/2014 11:00 AM By NYSESD