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272623 WHITE - CITV GLERf( f PINK - FINANCE COUnC1I •^,! � CANARV - DEPARTMEN G I TY OF SA I NT PA U L ` �, /� BLUE - MAYOR File NO. �' ��_ �� At�'� _ ncil Resolution � Presented By � � Referred To Committee: Date Out of Committee By Date RESOLUTION AUTHORIZING BELOW MARKET INTEREST RATE (BMiR) HOME MORTGAGE LOAN MORTGAGE ORIGINATION AGREEMENT WHEREAS,� by its Resolution, C. F. No. 272536, adopted February 20 , 1979 , the City Council made allocations in the amount of $41,710,000 to several lending institutions and authorized execution of mortgage origination agreements; and WHEREAS, it now appears that funds in the amount of $41,945,000 will be available for mortgage� origination, and there has been presented to this meetiflg� a Mortgage Origina- tion Agreem�nt with the Guaranty State Bar1k of Saint Paul in the amount of $235,000. NOW THEREFORE, BE IT RESOLVED by the Council of the City of Saint Paul that the Mortg�ge Origination Agree�nt with the Guaranty State Bank of Saint Paul in the amount of $235,000 is hereby approved for ex�cution by the proper City officers. COUNCILMEN Requested by Department of: Yeas Nays �- � Community Development Hozza [n Favor I�t� -L� / Levine _ � __ Against BY �� Maddox Showalter Tedesco � � 2 �� Form Approved b City Attorney Adopted by Cou Date Certified asse ou il ecretZry BY � /�ppr e y .Vlavor: Date � �� Approv yor for Submiss'on to Council � BY �� BY �B�isHE� MAR 1 ? 1979 ,'• _ . , � � �'`��,�� MEMORANDUM TO FILE, 3/9/79 FROM: Gary R. Norstrem � ' SUBJ: Pricing Committee - $50, 000,000 Mortgage Revenue Bond Sale � At 5:30 p.m. last night I received a call from Terry McNellis who informed.me that Piper, Jaffray & Hopwood (PJH) had contacted him to call a meeting of the Pricing Committee to reprice the $50,000,000 Home Mortgage Revenue Sale Bonds. I asked him whether he had contacted any members of the Council or the Mayor about this yet. He said that he had talked to the Mayor and the Mayor told Tezry that he wou.ld concur wit.h t_he deci::ion of. the fin�.n�i�l a3visors in t:zi� regard. In the meantime, Terry said he would attempt to contact Dave Hozza and Ruby Hunt, the Council members of the Pricing Committee. I suggested that Terry set up a conference call between myself, Springsted and a PJH representative to review the reasons for the change in price. Shortly after .6:00 p.m., I received a call from Duke Steenberg from PJH and Ron Langness, representing Springsted, to CI1S.^t1SS T�a�H�. rQ�OI".i[!�*2G�� chan,� _:� i�7:1C3.T.�. :1y first jt3�Sti�ri tJdS tU F.on L�ngnc�s as to his opinion in regard to the recommendation by PJH. He stated that his initial reaction to the proposal which would reduce the yield by 5 basis points on 9 or 10 earl� issues, leaving about 3 of the issues the same and increasing the yield 5 to 10 basis points on the last 5 serial issues and S basis points on the term bonds, was that it was not out �f line. Z then asked Duke Steenberg, "How much exposure do you, as managers, presently - have?". He stated that there was approxima.tely $11,000,000 of bonds still out- standing, or better than 20�,of the original issue. As co-managers, Dain & PJH have approximately $4,400,000 and, in addition, PJH bought outright $1,900,000 of bonds to retail. This leaves $7,000,000 of exposure to the other underwriters. ` t. Y � � ��r�� -a- My second question to Duke was what would be the effect if we spread the bonds around to the other underwriters, giving them the $2 per bond net : for liability and maintaining the current price structure. He responded that because of the amount of bonds outstanding, it was his feeli.ng that he would lose a number of the underwriters in the group because they would not be willing to take on additional bonds at this time. Additionally, he stated that there have not been any institutional orders on the term bonds at the present rate of 7.20�s. Terry had mentioned to me in his original phone call that PJH and Dain were willing to sign a contract to buy the whole issue for their underwirting group if the City � Pricing Committee would agree to the new proposed rate structure. I again asked Ron Langness if he had any further opinions, suggestions or comments before we made a recommendation to the other members of the Pricing Committee. He stated that the new rate structure appears to be in line, as long as the co-managers sign a contract to take the whole issue at that proposed price. Finally, I stated to Duke that as part of this change in the rate structure, I wanted to let him know that the City intends to maintain its option to designate a New York co-paying agent regardless of any bond orders from the New York banks. � Duke that that he understood that. Ron Langness and I stated that we would individually get back to Terry McNellis . and let him know our recommendation, and subsequent to this contact, that Ron Langness would get back to Duke yet tonight (3/8) with the final decision of the Pricing Committee. I was able to get ahold of Terry McNellis within 5 minutes after we ended the conference call and relayed the basic information to him included in this memo. � ' "? '/.19 r 1��f_�, .'i':'i � _ , � i�F��rzot� ? h�r;1c'E: �~�`.�� 4 i�I�; '�'. �.�i':lf.�%r�' Ji:t I I�i �;��i.Q 0 Q(>U U e �J��U�'J:i �'��1�.��1 JU Y��Cl y�)Of�.��4 �.��l!��nn � , L�UT'F'U1� C'f7T:�L:: (f�:h::[F'9 C:Ul1f'v F�F�.:t:��•1=tJl_I_+yl.ltl�f�IC:L.F')'? F'Ul_1... 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' 1:.i.IS(.(]UtJi ( �-1 �OOOrUUU.UU ) (�FtU�c; i�lT ,C.31 �305r�3£37.:i0 � i�f= r INT f3'?.:�t?S•f��27.�;h '/. l . lqif,7q __ _ __ ._ _....... . __. _ ............._ _ - --._ _ _ __ ,-... . .........______. ........ ....... __.. .... ___..._ ...... _......_......... __ _......_ _........_ _ ... .._....._ ____ _ _._ __...._...__......._ .._...._ ____..._. _........__ ____ __...... . _.. ................................. _._................................_._............ ......:........_.................. -.................._..._......................................................._. ......................................._...__ ..._.__................... __ .._...... .._. . . _..._.. _._._... __ _...._... ...... ... _........._ ....... ....... _ _____...... __.. .. ..... . _._... _ ...__ ___ __ .........____... __ _ _...... __.. _........ ......... _ _... . ........ _ _.__._..._..._ ^� H(N) Mullifcxxls 13uilciin� +' 733 Marc�uctic Avcnuc ' nr � ��y Minncapolis,Minnc�ota SS�3U2 ' `� �' .�`' �~ � 612/371-611I Q�,� Piper,Jaf�'ray&Hopwood � . , iNCOnpOq�iED � Esteblished 1895 Member New York Stock Exchenge,lnc. Piarch 9, 1979 � � Mr. Terry McNellis • - Department of Planning & Economic , Development " , ' � 12th Floor " • City Hall Annex St. Paul, Minnesota 55102 ' � Re: Repricing Scale City of Saint Paul . Home Ownership Mortgage Revenue Bonds Dear Terry: Z'his is to confirm the substance of our conversation with Springsted, wherein . Piper, Jaffray & Hopwood on behalf of ourselves and the syndicate have agreed to purchase the above mentioned bonds pursuant to the terms and conditions of the Bond Purchase Agreement on Monday, March 12, 1979 at interest rates as attached hereto. Further, for purposes completing the final Official Statement and completing ' the final verified computerized cash flows for the program, it is agreed that - - the final sources and uses of funds are as follows: Sources • Comm�tment Fees $ 419,450 Principal Amount of Bonds $50,000,000 Less Underwriter.'s Discount $ 1,000,000 $49,000,000 $49,419,450 Uses Deposit to ISortgage Loan Fund $42,364,450 Debt Service Reserve Fund 6,000,000 Mortgage Reserve Fund 419,450 � , Capitalized Interest Fund 289,550 � . • Cost of Issuance 346,000 $49,419,450 Thank you. � Sincer.ely yours, PIPER, JAFFRAY & HOPWOOD INCORPO�,TED • DeLos (Duke) �'. Steenson, Senior Vice President cc: Gsmond Springsted � � ._