05-629S �c i3 � �'T�.Q.'�
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RESOLUTION
PAUL, MINNESOTA
Presented By
Referred To
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Council File # 05- � a 9
Cneen Sheet # 30�`7 aS�
DETERMINING TO ISSUE VARIABLE RATE DEMAND BONDS
IN'I"HE FUTURE AND AUTHORIZING THE EXECUTION IN 2005 OF A
SWAP AGREEMENT WITH RESPECT THERETO
4 WHEREAS, the City of Saint Paul, Minnesota (the "City"), has outstanding bonds of its
5 Taxable Sales T� Revenue Bonds, Series 1999A (RiverCentre Arena Project) (the "1999
6 Bonds"), which beaz interest at high rates of interest (for instance, 7.09% for the bonds maturing
7 in 2025); and
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WHEREAS, interest rates would be lower now if the 1999 Bonds were refunded, but they
cannot be optionally redeemed until May 1, 2009, and an advance refunding now would not
produce sufficient savings; and
WHEREAS, the City can achieve significant savings by determining now to issue taxable
variable rate demand refunding bonds (the °Refunding Bonds"), any time before May 1, 2009, as
current or advance refunding bonds, and by entering into a swap agreement (the "Swap") under
which a counterparty promises to pay the City interest at such variable rate on the amount of the
Refunding Bonds in return for the City's payment to the counterparty of interest on such amount
at a fixed rate; and
WHEREAS, such "synthetic fixed rate" may be in the range of 5%; and
18 WHEREAS, Minnesota Statutes, Section 475.54, Subdivision 16, permits a municipality
19 to enter into an agreement for an exchange of interest rates if the agreement either is with or is
20 guazanteed by a party whose equivalent obIigations are rated A+ or better by a nationally
21 recognized rating agency, if the municipality has determined to issue obligations; and
22 WHEREAS, the City may agree with the counterparty to pay sums equal to interest at a
23 fixed rate on an amount not exceeding the outstanding principal amount of the obligations at the
24 time of payment, in exchange for an agreement by the counterparty to pay sums equal to interest
25 on a like amount at a variable rate; and
26 WHEREAS, such agreement is not an"obligation" as defined in Minnesota Statutes,
27 Chapter 475, and a municipality may pledge to the payment of amounts due or to become due
28 under the swap agreement, including termination payments, sources of payment pledged ar
29 available to pay debt service on the obligations or from any other available source of the
30 municipaiity; and
31 WHEREAS, the City anticipates reconstituting for the Refunding Bonds and the Swap
32 the same sources pledged by the City, RiverCentre Authority and Housing and Redevelopment
33 Authoriry of the City of Saint Paul to the 1999 Bonds, except the tax increment revenues which
1786095v3
1 aze no longer necessary, with the same parity such pledged sources have with respect to the
2 City's Sales Tas Revenue Refunding Bonds (Civic Center Project), Series 1996 (the "1996
3 Bonds"); and
4 WI�REAS, the City has solicited quotations for such exchange of interest rates, and the
5 Request for Interest Rate Swap (the "Request for Interest Rate Swap") has described the swap
6 agreement and its required terms in detail, and the Request for Interest Rate Swap is attached
7 hereto as Exhibit A and is hereby incorporated herein by reference:
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul,
Minnesota, as follows:
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1. Determination to Issue Refundin Bonds. The City hereby determines to issue
the Refunding Bonds on or before May 1, 2009, to refund the 1999 Bonds, in the initial
aggregate principal amount of $ CO6� 3oa,000 , or such greater or lesser amount as shall be
sufFicient to refund the 1999 Bonds, pay costs of issuance and insurance premiums, and establish
a reserve. The Refunding Bonds shall be variable rate demand bonds on which the interest rate
varies weekly equal to 100% of the London Inter-Bank Offering Rate ("LIBOR") on obligations
maturing in a month and is paid on the first day of each month. The Refunding Bonds may have
liquidity support from a bank and may haue credit support from a bank or bond insurer. For
purposes of the notional amount of the Swap, the Refunding Bonds shall mature on November 1
of the years and in the amounts set forth on Exhibit B attached hereto and hereby made a part
hereof; actual maturity years and amounts are dependent upon facts appiicable at the time the
Refunding Bonds aze issued.
2. Aporoval of Agreement. An agreement for the exchange of interest rates
substantially in the form required by the Request for Interest Rate Swap is hereby approved, and
the Mayor or executive assistant to the Mayor and the Director, Office of Financial Services, are
hezeby authorized and directed to enter into an agreement for the exchange of interest rates with
a counterparty selected as set forth in paragraph 3, with such changes thereto or completions
thereof as such officers shall approve.
28 3. Deleeation of Authoritv_. The Mayor and Director, Office of Financial Services,
29 may select a swap provider that meets the selection criteria identified in the Request for Interest
30 Rate Swap, and set the synthetic fixed rate at the rate quoted by such swap provider, provided
31 that the synthetic fixed rate on the Refunding Bonds identified on the quotation may not exceed
32 S • 2S %.
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4. Pled eg of Pavment Sources; Deleeation. Payxnents on the swap agreement, ,
including any termination payments, shall be made from the City's general resources; provided
that the Mayor and Director, Office of Financial Services, may provide in the agreement that the
payment of a termination payment due on or before May 1, 2009, is limited as to source to a
pledge of sales tax revenues on a basis subordinate to the 1999 Bonds and the 1996 Bonds; and
provided fiu that the Mayor and Directar, Office of Financial Services, may provide in the
agreement that payxnents, including termination payments, due after May 1, 2009, are limited as
to source to a pledge of the same sources of revenue that are pledged to the 1999 Bonds on the
same basis of parity with the 1996 Bonds as for the 1999 Bonds, if and when such pledges on
such basis are arranged. The City hereby pledges to the payment of the Refunding Bonds and to
the payment of amounts, including tersnination payments, under the agreement, its general
resources or, if the
1786095v3
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1 Mayor and Director, Office of Financial Services, have provided in the agreement for limited
2 payment sources, only those limited payment sources.
Yeas Na s Absent
Benanau ✓
Bostrom ✓
Aarris ,
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Montgomery ,�
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Adopted by Council: Date J���I �3 , aU O S
Adoption Certified by Council Secretary
Requested by Department of:
OFFICE OF FINANCIAL SERVICES
By: �
Form Approved by City Attorney
By: �/�d �l � ��
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� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
Fs F;��;� s�«s
Contact Person & Phone:
Todd Hudey/Matt Smith
266-8796
Must Be on Council /�qerv
13JUL-05
ContraMType:
O6JUL-05
� '
/lssign
Number
For
Routing
Order
E2-0THER AGREEMENTICAMRACT
Total # of Signature Pages _(Clip All Locations for Signalure)
Green Sheet NO: 3027253
0 mancial
Execurion of attached resolution determing to issue variable rate bonds in 2009 and authorizing the execurion in 2005 of a swap
agreement. �
idations: Appro�e (A) or Reject (R):
Planning Commission
CIB Committee
CiHI Sertice Commissidn �
Personal Service Contracts Must Mswerthe Following Questions:
1. Has this persoNfirtn eeer vroilced under a contract for this department?
Yes No
2. Has this persoNfirtn e�er been a cily employee?
Yes No
3. Does this persoNfirtn possess a skill not nortnally possessed by any
current city employee?
Yes No
Explain all yes answers on separate sheet and akach W green sheet
Initiating Probtem, Issues, Opportunity (Who, What, When, Where, Why�:
The City has identified an opportunity to to acheive significant sa�ings by determining now to issue variable rate bonds in 2009 to
refund the 1999 Arena Bonds, and by entering now into a swap agreement.
Advantages If Approved:
The Ciry will acheive significant debt service savings in 2009-2025 on the 1999 Arena Bonds.
Disadvantages If Approved:
Certain risks associated with swap agreements
Disadvanfaqes If NotApproved:
The City witl not acheive significant savings on the 1999 Arena Bonds.
Total Amount of
Trensaction:
Fundinq Source:
Financial information:
(Explain)
July 6, 2005 5:01 PM
$66,300,000 CosURevenue Budgeted:
Activiiy Number.
Page 1
oS - ba9
Exhi6it A
REQUEST FOR INTEREST RATE SWAP
T0: Eligible Bidders
FROM: Springsted Incorporated and
City Treasurer
City of Saint Paul, Minnesota
DATE: June 29,2005
SUBJECT: Request for Interest Rate Swap Quotation
City of Saint Paul, Minnesota
Relating to the Proposed Tauable Variable Rate Sales Tau Revenue Bonds
(RiverCentre Arena Project)
Series 2009 (the `2009 Bonds')
The City of Saint Paul (the 'City') is seeking quotations on a variable-to-fixed interest rate swap (the 'Swap') from qualified
bidders. The Swap relates to a variable rate issue refunding proposal to be issued in 2009 to refund the City's outstanding
1999A Bonds, which are currently outstanding as taxable fixed-interest rate obligations. The City intends to refund the 1999A
Bonds by issuing taxable variable rate demand obligations (the 'Refunding Bonds' or "the 2009 Bonds") at the 1999A Bonds
first optional prepayment date, May 1, 2009, for principal maturing November 1, 2009 and later. The 1999A Bonds have a
final principal payment in 2025. The 1999A Bonds funded in part the construction of the RiverCentre Arena, which is called
the Xcel Arena and the home of the Minnesota Wild National Hockey League team. The 1999A Bonds, together with certain
other obligations, are secured by the following primary revenue sources; a) a dedicated City sales tax; b) Team Lease
Payments; and c) to the extent available beginning in 2016 revenues of a related ta�c increment financing district. The 1999A
Bonds are insured by FSA. The 2009 Bonds may or may not be insured. The 1999A Bonds are not secured by a general
property tax revenues nor appropriations of general revenues of the City; neither will the 2009 Bonds.
The City has engaged Springsted lncorporated as swap advisor (the `Swap Advisor"). AI► questions and
correspondence are to be directed to Dave MacGillivray, Chairman or Barry FicK, Senior Vice President, of
Springsted, at 651.223.3000.
Bidders are advised that the City expects to release certain supplementaf information within the next few days.
The City has engaged Briggs & Morgan as its legal counsel (the `Legal Counsel'J. All questions regarding legal
aspects of this Request should be addressed to Paul Tietr, Briggs & Morgan, 612.977.8420.
A description of the characteristics and process follow:
Variable-to-Fixed Snrap
Description:
Trade Date:
Effective Date:
Termination Date:
Variable-to-Fixed LIBOR Swap
July 13, 2005
May1,2009
November1.2025
Notional Amount: $66,300,000(Preliminary, subject to change)
Amortization: As perAppendix A
Fixed Rate Payer City
Fixed Rate %: TBD
Fixed Rate Day Count
Fraction:
Fixed Rate Payer Payment
Dates:
Payments:
Floating Rate Payer
Floating Rate/index:
Floating-Rate Day Count Frection
Designated Maturity:
Floating Rate Payer
Payment Dates:
30/360
Monthly on the 1st business day of the month, commencing June 1, 2009 to and including
the Termination Date, subject to adjustment in accordance with the Following Business
Day Convention and there will be no adjustment to the Calculation Period.
Monthly
Interest Rate Swap Dealer (the "Counterparty")
III �i77
Actual/Actual
�fi� �R.Ti1ii1
Monthly on the 1st day of the month starting June 1, 2009 to and including the
Termination Date, subject to adjustment in accordance with the Following Business Day
Convention and there will be no adjustment to the Calculation Period.
Floating Rate Reset Dates Each Wednesday effective for Thursday.
Floating Rate Method ofAveraging: Inapplicable
Payments Monthly
Compounding Inapplicable
* Preliminary, subject to change.
Business Days
Business Day Convention
New York
Following
Termination Provisions: The City shali have the right to terminate this Transaction (provided that no Event
of Default or Termination Event has occurred), at any time following the Swap
execution date, by providing (i) at least one (1) Business Days' prior written notice
to fhe Counterparty of its election to tertninate this Transaction and (ii) evidence
reasonably satisfactory to the Counterparty that any and all amounts owed to the
Counterparty in connection with such early termination shall be paid on the due
date thereof. On the Optional Tertnination Date set forth in such notice, an amount,
determined by the Counterparty, shall be payable by the Counterparty or the City,
as the case may be, in respect of such termination. If such amount is not
acceptable to the City, then the Counterparty shall determine such amount in
accordance with Section 6 of the Master Agreement, assuming Market Quotation
and Second Method apply and the City is the sole Affected Party.
Transfer: The City may transfer all its rights and obligations under the agreement to another
entity provided that the Transferee: (i) has a credit rating no lower that A3 or A- by
Moodys, Standard and Poor's or Fitch; (ii) has executed ISDA documents with
Counterparty and Counterparty has established credit limits with Transferee; (iii)
such transfer will not result in the violations of any law, legal limitation or other
restriction.
Additional Termination Events:
Collateral Criteria:
The foilowing shall be Additional Termination Events:
(i) With the City as the Affected Party, the loss of bond insurance by an
insurer with AA/AA/Aa ratings; or
(ii) With Counterparty as the Affected Party, the downgrade of
Counterparty's (or its guarantor's) long-term unsecured debt
obligations below A3 or A- as determined by Moody's, S&P or Fitch
or a suspension or withdrawal of an such rati�g if within thirty (30)
days after such downgrade, suspension or withdrawal, Counterparty
has failed to transfer the Swap to a third party or a suitable guarantor
which shall be acceptable to the City.
(1) Appendix B of this document specifies terms to be included in the Credit
Support Annex.
(2) The collateral shall be delivered to a third party agent acceptable to the
City and the Counterparty.
* Preliminary, subject to change.
Use of Posted Collateral: Posted Collateral may be sold, pledged, transferred, rehypothecated or otherwise
disposed.
CalculationNaluation Agent: Counterparly shali serve as the CalculationNaluation Agent, unless the
Counterparty is a Defaulting Party, in which case the City, or its agent, may
become the CalculationNaluation Agent, or independently verify the
Counterpart�s valuation.
Fees
At the direction of the City, the successful Bidder will be required to pay upon execution of B
the Swap documentation, on behalf of the City, the following fees:
1. An arrangement fee of $30,000 to Springsted Incorporated;
2. Legal fees of $30,000 to Briggs & Morgan;
3. Initial Swap Maintenance Fee of $5,000 to City of St. Paul.
The Bids shall be submitted inclusive of all fees and expenses.
Security and Source of Regularly scheduled payment obligations of the City under the swap and any termination
Payments: payment owed by the City are intended to be paid from pledged revenues of the 1999A
Bonds or any Refunding Bonds.
Additional Information:
Bidders may obtain additional information, including a copy of the 1999A Bonds
Official Statement for information about payment sources and their priority, from the
Swap Advisor.
Documentationl The Swap will be documented pursuant to the Intemational Swap and Derivatives
Representation: Association, Inc. ("ISDA") Master Agreement (Copyright 2005), as amended by a
Schedule and Credit Support Annex, to be negotiated in good faith between the City
and the winning bidder. In addition to the swap documentation, the counterparty will be
required to sign certain certificates provided by bond counsel in connection with its
rendering of its bond opinion. A form of such certificate is attached hereto as Appendix
D.
Confirmation:
The Counterparty will provide an executable Confirmation incorporating the terms and
conditions of this Request for Interest Rate Swap by the estimated Swap Execution
Date of July 21, 2005.
Legal Opinions: The Counterparty and the City agree to deliver legal opinions related to the due
authorization and enforceability of the interest rate swap documents and any
guarantee. AII final documents must be delivered by July 21, 2005.
Goveming Law:
State of New York, except that the capacity of the City to enter into the agreement
shali be govemed by and construed in accordance with the laws of the State of
Minnesota.
* Prelixriivary, subject to change.
Bid Parameters: The bids will specify the Fixed Rate to be paid by the City. Bids shall be inclusive of
all fees and expenses. If more than one party submits the same bid, the City retains
the right to award the swap through the use of a coin toss. The City expects to award
the Swap to the Counterparty bidding the lowest Fixed Rate in combination with the
leastrestrictivetertns and exceptions.
Solicited Bidders
All bidders will represent that their bid is submitted with the intent of acting as
principal in the S1�vap and that they have not solicited other brokers/dealers
regarding this transaction (except in connection with the provision of a
contingent swap counterparty to act as such for the bidder) and that the bid was
determined without regard to any other formal or informal agreement that the
bidder may have with the City or any other person.
The City reserves the right to reject any and all bids and to waive any irregularity in the
bid process. The City also reserves the right to negotiate the terms of the Swap and
Schedulethereto withthe Counterparty.
Ambac; Bank of America; Citigroup; J.P. Morgan; Lehman Brothers; Morgan Stanley;
Piper Jaffray; UBS Financial Services Inc.; Wachovia Bank, N.A.; RBC Dain
Rauscher; Dougherty & Company; US Bank, NA; Harris Bank; Wells Fargo Bank
Credit Rating of Swap Provider or Minnesota State law requires that the City's Agreement be with or guaranteed by a
Guarantor party whose equivalent obligations are rated A+ or higher. Guaranty can be traditional
corporate guaranty or take the form of replacement Counterparty agreement.
Terminating Subsidiary Structure: Would be allowed, provided that any transfer limitations allowed provided limited
changes to the Master Agreement.
Bid Submittal: All Bids using the attached Letter of Acceptance or by telephone should be directed to
the Swap Advisor at 1:00 P.M. Central Daylight time, on July 13, 2005. . The bids
will be deemed firm for not more than ten (10) minutes or such shorter time as the City
shall notify bidders at least one Business Day prior to the receipt of bids. Based on
the expectation of good faith negotiations between the City and the Counterparty using
the industry standard ISDA documents, on terms consistent with specifics in this
Request for Swap, The Swap is expected to be approved and delegation to award
made at the City Council meeting scheduled for 3:30 P.M. Central Daylight Time,
on Wednesday, July 13, 2005.
Disclosure:
This Request for Interest Rate Swap and the submission of a bid by any party does
not obligate the City in any manner whatsoever.
The City reserves the right to amend, modify or withdraw this Request for Interest
Rate Swap; to waive or revise any requirement of this Request for Interest Rate Swap;
to acquire any supplemental information from any responding party; to accept or reject
any or all bids; or to re-negotiate or hold discussions with any responding party in
order to negotiate the terms of the Swap.
* Preluninary, subject to change.
Conformance with State and City Investment statute and policy
The City has an adopted Investment Policy which incorporates the State statutory provisions, (Minnesota Statutes,118A) of the
investment of public funds. The City's Investrnent Policy and Minnesota Statutes, 118A are inciuded as attachments with this
document. This Request requires the Bidder to affirmatively acknowledge their bid is in conformance with the City's
Investment Policy.
The balance of this page is intentionally left blank.
* Preluninary, subject to change.
APPENDIX A
Notional Principai Amortization Schedule'
Notional
Amount Revised Notional
Reduction Date Reduction* Amount
$66,300,000
11/1/2009 $1,700,000 $64,600,000
11/1/2010 $2,400,000 $62,200,000
11/1/2011 $2,500,000 $59,700,000
11/1/2012 $2,600,000 $57,100,000
11/1/2013 $2,700,000 $54,400,000
11/1/2014 $2,800,000 $51,600,000
11/1/2015 $3,000,000 $48,600,000
11/1/2016 $3,200,000 $45,400,000
11/1/2017 $3,300,000 $42,100,000
11/1/2018 $3,500,000 $38,600,000
11/1/2019 $3,600,000 $35,000,000
11/1/2020 $3,800,000 $31,200,000
11/1/2021 $4,000,000 $27,200,000
11/1/2022 $4,200,000 $23,000,000
11/1/2023 $4,400,000 $18,60,000
11/1/2024 $9,100,000 $9,500,000
11/1/2025 $9,500,000 $0
' Preliminary,
subject to
change
* Preliminary, subject to change.
APPENDIX B
COLLATERAL PROVISIONS
The 1994 ISDA Credit Support Annex (the "CSA'� is hereby incorporated by reference in its entirety. The following provisions
shall apply with respect to Paragraph 13 to the CSA.
(a) Cred'R Support Obligations.
(i) "Credit Support AmounY' has the meaning specfied in Paragraph 3, except that the Credit Support Amount
for Counterparty shall never be less than the Independent Amount.
(ii) Eligible Collateral. The following items will qualify as "Eligible Collateral" for each pafij.
(iii)
Schedule I
1 Collateral T e 2 Valuation Percenta e
Cash 100%
Negotiable debt obligations issued by 100%
the U.S. Treasury Department having a
remaining tertn to maturity of not more
than one year
Negotiable debt obligations issued by 98%
the U.S. Treasury Department having a
remaining term to maturity of more than
one year but not more than 10 years
Negotiable debt obligations issued by 95%
the U.S. Treasury Department having a
remaining term to maturity of more than
10 years
Negotiable debt obligations issued by 95%
the Federal Home Loan Mortgage
Association ("Freddie Mac") orthe
Federal National Mortgage Association
("Fannie Mae") or mortgage-backed
securities issued by Freddie Mac or
Fannie Mae but excluding interest only
or principal only stripped securities,
securities representing residual interests
in mortgage poois, or securities that are
not listed on a national securities
exchange or regularly quoted in a
national quotation service.
* Preliminary, subject to change.
(iii) Thresholds.
(A) "Independent AmounY' means zero.
(B) "Threshold" means: the U.S. Dollar amount specified in the following table under the heading "Threshold"
opposite such party's curzent Credit Rating; provided, that 'rf an Event of Default has occurred and is
continuing with respect to a party, the Threshokl with respect to such party shall be zero:
Schedule II
Moodv's S&P Threshold Minimum Transfer
Amount
Aaa AAA $ Infinite $100,000
Aa1 to Aa3 AA+ to AA- $100,000,000 $100,000
A1 to A3 A+to A- $10,000,000 $100,000
at or below Baa1 at or below BBB+ $0 $100,000
"Credit Rating" means the most recent publicly announced rating by Moody's, and S&P for (i) in the case
of the Counterparty, its financial program rating or counterparty risk rating, as applicable, and (ii) in the case
of City, the Bonds (without giving effect to any credit enhancement). If the relevant ratings of Moody's and
S&P would result in different Thresholds, the rating that results in the smaller Threshold shall control for
purposes of this definition. If a party is rated by only one of the above agencies and such agency ceases to
assign a rating to the party, then for so long as such Credit Rating is not assigned the Threshold and
Minimum Transfer Amount applicable to such party shall be zero.
(C) "Minimum Transfer AmounY' as of any date shall be the amount set forth in Schedule II hereto; rop vided
that if an Event of Default has occurred and is continuing with respect to a party, the Minimum Transfer
Amount with respect to such party shall be zero.
(D) Rounding. The Delivery Amount and Retum Amount will be rounded up and down, respectively, to the
nearest integral multiple of $10,000.
(b) Valuation and Timing
(i) "Valuation Date" shall be the first Business Day of the month or any other Business Day, which either party
designates as such.
(ii) "Valuation Time" shall be the close of business on the Business Day before the Valuation Date.
* Preliminary, subject to change.
APPENDIX C
CERTIFICATE OF SWAP PROVIDER
This Certificate is being fumished by (the "Swap Provider") with respect to an agreement to
provide an interest rate swap (the "Swap Agreement") between the City of Saint Paul (the "City') and the Swap
Provider relating to a series of taxable bonds anticipated to be by the City issued on or before 2009
(the "Bonds"). The undersigned HEREBY CERTIFIES as follows:
(1) On , 2005, the City and the Swap Provider entered into the Swap Agreement.
Pursuant to the terms of the Swap Agreement, the City will pay to the Swap Provider a fixed rate of
f�]% per annum as the fixed rate payor and the City will receive from the Swap Provider a variable
rate of [LIBOR] per annum.
(2) Except as set forth in the Swap Agreement, no other payments are contemplated to be paid or
received by the Swap Provider. This fixed rate is no higher than the rate that the Swap Provider would
have quoted to other persons to enter into a reasonably comparable interest rate swap arrangement taking
into full account the terms and conditions of the Swap Agreement, and with a counterparty similarly situated
to the City, including taxable business corporations and tax-exempt issuers, taking into full account the
security and sources of payment provided for payments to the Swap Provider, the amortization of the
notional principal amounts under the Swap Agreement, the risk profile of such counterparty, structuring,
and other terms inherent under the Swap Agreement.
(3) Changes in value of the Swap Agreement are based primarily on interest rate changes.
(4) No payments under the Swap Agreement represent compensation to the Swap Provider for
services or other items other than modification of interest rate risk and Swap Provider overhead.
(5) The Swap Agreement requires only periodic payments and no up-front payments were made by
the Swap Provider and the City.
(6) The Swap Provider is not paying, and does not expect to pay, any administrative costs to third
parties including any brokerage or selling commissions, legal and accounting fees, other than the normal
and customary fees its counsel in connection with supplying the Swap Agreement except for the fees of the
swap advisor to the City in the amount of $ ; the fees of legal counsel to the City in the amount
of $ ; and a Fee for swap monitoring to the City in the amount of $5,000.
(7) The Swap Agreement was subject to a competitive bidding procedure that reflected an arm's-
length transaction.
The Swap Provider understands that the representations contained herein may be relied upon by the City in making
certain of the representations contained in the Certificates Regarding Identification of Swap Contract to be executed
by the City and a ta�c compliance certificate, if any, to be executed by the City in connection with the issuance of the
bonds, and further understands that the City and its counsel will rely upon this ceRificate.
Dated: , 2005
By: Authorized Representative
* Prelinnuary, subject to change.
City of Saint Paul, Minnesota
Taxable Sales Tax Revenue Bonds
(RiverCentre Arena Project)
Series 2009
Interest Rate Swap
LETTER OF ACCEPTANCE
We hereby certify that we are an Eligible Bidder as defined in the Request and submit our bid and commit to provide
the Interest Rate Swap subject to all the tertns and conditions stated in the foregoing Request for Interest Rate Swap.
The submission of this Bid is a representation that the bidder, with the intent of acting as principal in the Swap, did not
consult with any other potential provider about this bid (except in connection with the provision of a Contingent Swap
Counterparty to act as such for the bidder) and that the bid was detertnined without regard to any other formal or informal
agreement that the bidder may have with the City or any other person (whether or not in connection with the subject bond
issues).
Fixed Rate
Incfuded in the fixed rate is an initial fee of $ for the Swap Provider, which is expressed in basis points
as
Exceptions to Request for Interest Rate Swap:
Bv executinq this Letter of Acceptance we acknowledqe our bid is in conformance with the Citv's Investment Policv.
Accepted by the City:
�
Authorized Representative
Name:
Title:
Firm:
Date:
* Preliminary, subject to change.
Exhibit B
APPENDIX A
Notional Principal Amortization Schedule*
Reduction Date
11/1/2009
11/1/2010
11/1/2011
11/1/2012
11/1/2013
11/1/2014
11/1/2015
11/1/2016
11/1/2017
11/1/2018
11/1/2019
11/1/2020
11/1/2021
11/1/2022
11/1/2023
11/1/2024
11/1/2025
Notional
Amount
Reduction�
$1,700,000
$2,400,000
$2,500,000
$2,600,000
$2,700,000
$2,800,000
$3,000,000
$3,200,000
$3,300,000
$3,500,000
$3,600,000
$3,800,000
$4,000,000
$4,200,000
$4,400,000
$9,100,000
$9,500,000
* Preliminary,
subject to
change
Revised Notional
Amount
$66,300,000
$64,600,000
$62,200,000
$59,700,000
$57,100,000
$54,400,000
$51,600,000
$48,600,000
$45,400,000
$42,100,000
$38,600,000
$35,000,000
$31,200,000
$27,200,000
$23,000,000
$18,60,000
$9,500,000
$0
* Preliminary, subject to change.
Exhibit A
REQUEST FOR INTEREST RATE SWAP
T0: Eligible Bidders
FROM: Springsted Incorporated and
City Treasurer
City of Saint Paul, Minnesota
DATE: June 29, 2005
SUBJECT: Request for interest Rate Swap Quotation
City of Saint Paul, Minnesota
Relating to the Proposed Taxable Variable Rate Sales Tax Revenue Bonds
(RiverCentre Arena Project)
Series 2009 (the `2009 Bonds')
The City of Saint Paul (the 'City') is seeking quotations on a variable-to-fixed interest rate swap (the `Swap') ftom qualified
bidders. The Swap relates to a variable rate issue refunding proposal to be issued in 2009 to refund the City's outstanding
1999A Bonds, which are currently outstanding as taxable fixed-interest rate obligations. The City intends to refund the 1999A
Bonds by issuing taxable variable rate demand obligations (the 'Refunding Bonds' or "the 2009 Bonds") at the 1999A Bonds
first optional prepayment date, May 1, 2009, for principal maturing November 1, 2009 and later. The 1999A Bonds have a
final principal payment in 2025. The 1999A Bonds funded in part the construction of the RiverCentre Arena, which is called
the Xcel Arena and the home of the Minnesota Wild National Hockey League team. The 1999A Bonds, together with certain
other obligations, are secured by the following primary revenue sources; a) a dedicated City sales tax; b) Team Lease
Payments; and c) to the extent available beginning in 2016 revenues of a related tax increment financing district. The 1999A
Bonds are insured by FSA. The 2009 Bonds may or may not be insured. The 1999A Bonds are not secured by a general
property tax revenues nor appropriations of general revenues of the City; neither will the 2009 Bonds.
The City has engaged Springsted Incorporated as swap advisor (the `Swap Advisor"). AII ques6ons and
conespondence are fo be directed to Dave MacGilfivray, Chairman or Barry Fick, Senior Vice Presidenf, of
Springsfed, at 651.223.3000.
Bidders are advised that the City expects to release certain supplemenfal information within the next few days.
The City has engaged Briggs & Morgan as ifs legal counsel (the `Legal Counsel'). All questions regarding legal
aspecfs of this Requesf should 6e addressed to Paui Tietr, Briggs & Morgan, 612.977.8420.
A description of fhe characteristics and process folfow:
Variable-to-Fixed S1n�ap
Description:
Trade Date:
Effecfive Date:
Termination Date:
Notional Amount:
Amortization:
Fixed Rate Payer
Fixed Rate %:
Fixed Rate Day Count
Fraction:
Fixed Rate Payer Payment
Dates:
Payments:
Floating Rate Payer
�loating Ratelindez:
Variable—to—Faed LIBOR Swap
July 13, 2005
May 7, 2009
November1,2025
$66,300,000(Preliminary, subject to change)
As per Appendix A
City
TBD
30/360
Monthly on the 1 st business day of the month, commencing June 1, 2009 to and including
the Termination Date, subject to adjustment in accordance with the Following Business
Day Convention and there will be no adjustment to the Calculation Period.
Monthly
Interest Rate Swap Dealer (the "Counterparty°)
�13i]:�
Floating-Rate Day Count Fraction: Actual/Actual
Designated Maturity: 1 Month
Floating Rate Payer Monthly on the 1st day of the month starting June 1, 2009 to and including the
Payment Dates: Termination Date, subject to adjustment in accordance with the Following Business Day
Convention and there will be no adjustment to the Calculation Period.
Floating Rate Reset Dates Each Wednesday effective for Thursday.
Floating Rate Method of Averaging: Inapplicable
Payments Monthly
Compounding Inapplicable
* Preliminary, subject to change.
Business Days
Business Day Convention:
New York
Following
Termination Provisions: The City shall have the right to tertninate this Transaction (provided that no Event
of Default or Termination Event has occurred), at any time following the Swap
execution date, by providing (i) at least one (1) Business Days' prior written notice
to the Counterparty of its election to terminate this Transaction and (ii} evidence
reasonably satisfactory to the Counterparty that any and all amounts owed to the
Counterparty in connection with such early termination shall be paid on the due
date thereof. On the Optional Termination Date set forth in such notice, an amount,
detertnined by the Counterparty, shal� be payable by the Counterparty or the City,
as the case may be, in respect of such termination. If such amount is not
acceptable to the City, then the Counterparty shall determine such amount in
accordance with Section 6 of the Master Agreement, assuming Market Quotation
and Second Method apply and the City is the sole Affected Party.
Transfer: The City may transfer all its rights and obligations under the agreement to another
entity provided that the Transferee: (i) has a credit rating no lower that A3 or A- by
Moody's, Standard and Poor's or Fitch; (ii) has executed ISDA documents with
Counterparty and Counterparry has established credit limits with Transferee; (iii)
such transfer will not result in the viotations of any law, legal limitation or other
restriction.
Additional Termination Events:
Collateral Criteria:
The following shall be Additional Termination Events:
(i) With the City as the Affected Party, the loss of bond insurance by an
insurer with AA/AA/Aa ratings; or
(ii) With Counterparty as the Affected Party, the downgrade of
Counterparty's (or its guarantor's) long-term unsecured debt
obligations below A3 or A- as determined by Moody's, S&P or Fitch
or a suspension or withdrawal of an such rating if within thirty (30)
days after such downgrade, suspension or withdrawal, Counterparty
has failed to transfer the Swap to a third party or a suitable guarantor
which shall be acceptable to the City.
(1) Appendix B of this document spec�es terms to be included in the Credit
Support Annex.
(2) The collateral shall be delivered to a third party agent acceptable to the
City and the Counterparty.
* Preluninary, subject to change.
Use of Posted Collaterai: Posted Collateral may be sold, pledged, transferred, rehypothecated or otherwise
disposed.
CalculationNaluation Agent: Counterparty shall serve as the CaiculationNaluation Agent, unless the
Counterparty is a Defaulting Party, in which case the City, or its agent, may
become the CalculationNaluation Agent, or independently verify the
Counterpaity's valuation.
Fees At the direction of the City, the successful Bidder will be required to pay upon execu6on of B
the Swap documentation, on behalf of the City, the following fees:
1. An arrangement fee of $30,000 to Springsted Incorporated;
2. Legal fees of $30,000 to Briggs & Morgan;
3. Initial Swap Maintenance Fee of $5,000 to City of St. Paul.
The Bids shall be submitted inclusive of all fees and expenses.
Security and Source of Regularly scheduled payment obligations of the City under the swap and any termination
Payments: payment owed by the City are intended to be paid from pledged revenues of the 1999A
Bonds or any Refunding Bonds.
Additional Information: Bitlders may obtain additional information, including a copy of the 1999A Bonds
Official Statement for information about payment sourees and their priority, from the
Swap Advisor.
Documentation/ The Swap will be documented pursuant to the Intemational Swap and Derivatives
Representation: Association, Inc. ("ISDA°) Master Agreement (Copyright 2005), as amendetl by a
Schedule and Credit Support Annex, to be negotiated in good faith between the City
and the winning bidder. In addition to the swap documentation, the counterparty will be
required to sign certain certificates provided by bond counsel in connection with its
rendering of its bond opinion. A form of such certificate is attached hereto as Appendix
D.
Confirmation: The Counterparty will provide an executable Confirmation incorporating the terms and
conditions of this Request for Interest Rate Swap by the estimated Swap Execution
Date of July 21, 2005.
Legal Opinions: The Counterparty and the City agree to deliver legal opinions related to the due
authorization and enforceability of the interest rate swap documents and any
guarantee. All final documents must be delivered by July 21, 2005.
Goveming Law: State of New York, except that the capacity of the City to enter into the agreement
shall be govemed by and construed in accordance with the laws of the State of
Minnesota.
* Prelimivazy, subject to change.
Bid Parameters: The bids will specify the fixed Rate to be paid by the City. Bids shall be inclusive of
all fees and expenses. If more than one party submits the same bid, the City retains
the right to award the swap through the use of a coin toss. The City expects to award
the Swap to the Counterparty bidding the lowest Fixed Rate in combination with the
least restrictive terms and exceptions.
All bidders will represent that their bid is submitted with the intent of acting as
principal in the S1�vap and that they have not solicited other brokers/dealers
regarding this transaction (except in connection with the provision of a
contingent swap counterparty to act as such for the bidder) and that the bid was
determined without regard to any other formal or informal agreement that the
bidder may have with the City or any other person.
The City reserves the right to reject any and all bids and to waive any irregularity in the
bid process. The City also reserves the right to negotiate the terms of the Swap and
Schedule thereto with the Counterparty.
Solicited Bidders Ambac; Bank of America; Citigroup; J.P. Morgan; Lehman Brothers; Morgan Stanley;
. Piper Jaffray; UBS Financial Services Inc.; Wachovia Bank, N.A.; RBC Dain
Rauscher; Dougherty & Company; US Bank, NA; Harris Bank; Wells Fargo Bank
Credit Rating of Swap Provider or Minnesota State Iaw requires that the City's Agreement be with or guara�teed by a
Guarantor party whose equivalent obligations are rated A+ or higher. Guaranty can be traditional
corporate guaranty or take the form of replacement Counterparty agreement.
Terminating Subsidiary Structure: Would be allowed, provided that any transfer limitations allowed provided limited
changes to the Master Agreement.
Bid Submittal: All Bids using the attached Letter of Acceptance or by telephone should be directetl to
the Swap Advisor at 1:00 P.M. Central Daylight time, on July 13, 2005. . The bids
will be deemed firm for not more than ten (10) minutes or such shorter time as the City
shall notify bidders at least one Business Day prior to the receipt of bids. Based on
the expectation of good faith negotiations betwee� the City and the Counterparty using
the industry standard ISDA documents, on terms consistent with specifics in this
Request for Swap, The Swap is expected to be approved and delegation to award
made at the City Council meeting scheduled for 3:30 P.M. Central Daylight Time,
on Wednesday, July 13, 2005.
Disclosure: This Request for Interest Rate Swap and the submission of a bid by any party does
not obligate the City in any manner whatsoever.
The City reserves the right to amend, modify or withdraw this Request for Interest
Rate Swap; to waive or revise any requirement of this Request for Interest Rate Swap;
to acquire any supplementai information from any responding party; to accept or reject
any or all bids; or to re-negotiate or hold discussions with any responding party in
order to negotiate the terms of the Swap.
* Preliminary, subject to change.
Conformance with State and City Investment statute and policy
The City has an adopted Investment Policy which incorporates the State statutory provisions, (Minnesota Statutes,118A) of the
investrnent of public funds. The City's Investrnent Policy and Minnesota Statutes, 118A are included as attachments wifh this
document. This Request requires the Bidder to affirtnatively acknowledge their bid is in conformance with the City's
Investrnent Policy,
The balance of this page is intentionally left blank.
* Preluninary,subjectto change.
APPENDIX A
Notional Principal Amortization Schedule*
Notional
Amount Revised Notional
Reduction Date Reduction* Amount
$66,300,000
11/1/2009 $1,700,000 $64,600,000
11/1/2010 $2,400,000 $62,200,000
11/1/2011 $2,500,000 $59,700,000
11/1/2012 $2,600,000 $57,100,000
11/1/2013 $2,700,000 $54,400,000
11/1/2014 $2,800,000 $51,600,000
11/1/2015 $3,000,000 $48,600,000
11/1/2016 $3,200,000 $45,400,000
11/1/2017 $3,300,000 $42,100,000
11/1/2018 $3,500,000 $38,600,000
11/1/2019 $3,600,000 $35,000,000
11/1/2020 $3,800,000 $31,200,000
11/1/2021 $4,000,000 $27,200,000
11/1/2022 $4,200,000 $23,000,000
11/1/2023 $4,400,000 $18,60,000
11/1/2024 $9,100,000 $9,500,000
11/1/2025 $9,500,000 $0
` Preliminary,
subject to
change
* Preliminary, subject to change.
APPENDIX B
COLLATERAL PROVISIONS
The 1994 ISDA Credit Support Annex (the "CSA'� is hereby incorporated by reference in its entirety. The following provisions
shall apply with respect to Paragraph 13 to the CSA.
(a) Credit Support Obligations.
(i) "Credit Support Amount" has the meaning specfied in Paragraph 3, except that the Credit Support Amount
for Counterparty shall never be less than the Independent Amount.
(ii) Eligible Collateral. The following items will qualify as "Eligible Collateral" for each party.
(iii)
Schedule I
1 Collateral T e 2 Valuation Percenta e
Cash 100%
Negotiable debt obligations issued by 100°/a
the U.S. Treasury Department having a
remaining term to maturity of not more
than one year
Negotiable debt obligations issued by 98%
the U.S. Treasury Department having a
remaining term to maturity of more than
one year but not more than 10 years
Negotiable debt obligations issued by 95%
the U.S. Treasury Department having a
remaining term to maturity of more than
10 years
Negotiable debt obligations issued by 95%
the Federal Home Loan Mortgage
Association ("Freddie Mac") or the
Federal National Mortgage Association
(`Fannie Mae") or mortgage-backed
securities issued by Freddie Mac or
Fannie Mae but excluding interest only
or principai only stripped securities,
securities representing residual interests
in mortgage pools, or securities that are
not listed on a national securities
exchange or regulariy quoted in a
national quotation service.
* Preliminary, subject to change.
(iii) Thresholds.
(A) "Independent AmounY' means zero.
(B) "Threshold" means: the U.S. Dollar amount specified in the following table under the heading "Threshold"
opposite such party's current Credit Rating; rovided that rf an Event of Default has occurred and is
continuing with respect to a party, the Threshold with respect to such party shall be zero:
Schedule II
Mood s S&P Threshold Minimum Transfer
Amount
Aaa AAA $ Infinite $100,000
Aa1 to Aa3 AA+to AA- $100,000,000 $100,000
A1 to A3 A+ to A- $10,000,000 $100,000
at or below Baa1 at or below BBB+ $0 $100,000
"Credit Rating" means the most recent publicly announced rating by Moody's, and S&P for (i) in the case
of the Counterparty, its financial program rating or counterparty risk rating, as applicable, and (ii) in the case
of City, the Bonds (without giving effect to any credit enhancement). If the relevant ratings of Moody's antl
S&P would result in different Thresholds, the rating that results in the smaller Threshold shall control for
purposes of this definition. If a party is rated by only one of the above agencies and such agency ceases to
assign a rating to the party, then for so long as such Credit Rating is not assigned the Threshold and
Minimum Transfer Amount applicable to such party shall be zero. �
(C) "Minimum Transfer AmounY' as of any date shall be the amount set forth in Schedule II hereto; rop vided
that if an Event of Default has occurred and is continuing with respect to a party, the Minimum Transfer
Amount with respect to such party shall be zero.
(D) Rounding. The Delivery Amount and Retum Amount will be rounded up and down, respectively, to the
nearest integral multiple of $10,000.
(b) Valuation and Timing
(i) `Naluation Date" shall be the first Business Day of the month or any other Business Day, which either party
designates as such.
(ii) "Valuation Time" shall be the close of business on the Business Day before the Valuation Date.
* Preliminary, subject to change.
APPENDIX C
CERTIFICATE Of SWAP PROVIDER
This Certificate is being fumished by (the "Swap Provider") with respect to an agreement to
provide an interest rate swap (the "Swap Agreement") beiween the City of Saint Paul (the "Cit�'J and the Swap
Provider rela6ng to a series of taxable bonds anticipated to be by the City issued on or before 2009
(the "Bonds"). The undersigned HEREBY CERTIFIES as follows:
(7) On , 2005, the City and the Swap Provider entered into the Swap Agreement.
Pursuant to the terms of the Swap Agreement, the City will pay to the Swap Provider a fixed rate of
�)% per annum as the fixed rate payor and the City will receive from the Swap Provider a variable
rate of [LIBOR] per annum.
(2) Except as set forth in the Swap Agreement, no other payments are contemplated to be paid or
received by the Swap Provider. This fixed rate is no higher than the rate that the Swap Provider would
have quoted to other persons to enter into a reasonably comparable interest rate swap arrangement taking
into full account the terms and conditions of the Swap Agreement, and with a counterparry similarly situated
to the City, including taxable business corporations and tax-exempt issuers, taking into full account the
security and sources of payment provided for paymenfs to the Swap Provider, the amortization of the
notional principal amounts under the Swap Agreement, the risk profile of such counterparty, structuring,
and other terms inherent under the Swap Agreement.
(3) Changes in value of the Swap Agreement are based primarily on interest rate changes.
(4) No payments under the Swap Agreement represent compensation to the Swap Provider for
services or other items other than modification of interest rate risk and Swap Provider overhead.
(5) The Swap Agreement requires only periodic payments and no up-front payments were made by
the Swap Provider and the Ci1y.
(6) The Swap Provider is not paying, and does not expect to pay, any administrative costs to third
parties including any brokerage or selling commissions, legal and accounting fees, other than the normal
and customary fees its counsel in connection with supplying the Swap Agreement except for the fees of the
swap advisor to the City in the amount of $ ; the fees of legal counsel to the City in the amount
of $ ; and a Fee for swap monitoring to the City in the amount of $5,000.
(7) The Swap Agreement was subject to a competitive bidding procedure that reflected an arm's-
length transaction.
The Swap Provider understands that the representations contained herein may be relied upon by the City in making
certain of the representations contained in the Certificates Regarding Identification of Swap Contract to be executed
by the City and a tax compliance certificate, if any, to be executed by the City in connection with the issuance of the
bonds, and further understands that the City and its counsel will rely upon this certificate.
Dated: , 2005
By: Authorized Representative
* Preliminary, subject to change.
City of Saint Paul, Minnesota
Ta�cable Sales Tax Revenue Bonds
(RiverCentre Arena Project)
Series 2009
Interest Rate Swap
LETTER OF ACCEPTANCE
We hereby certify that we are an Eligible Bidder as defined in the Request and submit our bid and commit to provide
the Interest Rate Swap subject to all the terms and conditions stated in the foregoing Request for Interest Rate Swap.
The submission of this Bid is a representation that fhe bidder, with the intent of acting as principal in the Swap, did not
consult with any other potential provider about this bid (except in connection with the provision of a Contingent Swap
Counterparty to act as such for the bidder) and that the bid was determined without regard to any other formal or informal
agreement that the bidder may have with the City or any other person (whether or not in connecTion with the subject bond
issues).
Fixed Rate
Included in the fixed rate is an initial fee of $ for the Swap Provider, which is expressed in basis points
as
Exceptions to Request for Interest Rate Swap:
Bv executinq this Letter of Acceotance we acknowledqe our bid is in conformance with the Citv's Investment Policv
Accepted by the City:
�
Authorized Representa#ive
Name:
Title:
Firm:
Date:
* Preluninary, subject to change.
Exhibit B
APPENDIX A
Notionai Principal Amortization Schedule*
Notional
Amount Revised Notionat
Reduction Date Reduction* Amount
$66,300,000
11/1/2009 $1,700,000 $64,600,000
11/1/2010 $2,400,000 $62,200,000
11/1/2011 $2,500,000 $59,700,000
11/1/2012 $2,600,000 $57,700,000
11/1/2013 $2,700,000 $54,400,000
11/1/2014 $2,800,000 $51,600,000
11/1/2015 $3,000,000 $48,600,000
1111/2016 $3,200,000 $45,400,060
11/1/2017 $3,300,000 $42,100,000
11/1/2018 $3,500,000 $38,600,000
11/1/2019 $3,600,000 $35,000,000
11/1/2020 $3,800,000 $31,200,000
11/1/2021 $4,000,000 $27,200,000
11/1/2022 $4,200,000 $23,000,000
11/1/2023 $4,400,000 $18,60,000
11/1/2024 $9,100,000 $9,500,000
11/1/2025 $9,500,000 $0
* Preliminary,
subjectto
change
* Prelimivary, subject to change.
Council File # �S'� �� �
Green Sheet # 30�� 01�.3
RESOLUTION
PAUL, MIlVNESOTA
Presented By
Referred To
1 DETERMINING TO ISSUE VARIABLE RATE DEMAND BONDS
2 IN 2009 AND AiITHORIZING THE EXECUTION IN 2005 OF A
[:l�J/_\7[�i:7�I�iLI�l�Y1��J/i�Y:/:7mf.�i�L .�1 Y'1�1:7_�11C�7
4 WHEREAS, the City of Saint Paul, Minnesota (the "City"), has outstanding bonds of its
5 Taacable Sales Tasc Revenue Bonds, Series 1999A (RiverCentre Arena Project) (the "1999
6 Bonds"), which bear interest at high rates of interest (for instance, 7.09% for the bonds maturing
7 in 2025); and
8 WHEREAS, interest rates would be lower now if the 1999 Bonds were refunded, but they
9 cannot be optionally redeemed unril May 1, 2009, and an advance refixnding now would not
10 produce sufficient savings; and
11 WHEREAS, the City can achieve significant sauings by determining now to issue taacable
12 variable rate demand refunding bonds in 2009 (the "2009 Bonds"), and by entering into a swap
13 agreement (the "Swap") under which a counterparty promises to pay the City interest at such
14 variable rate on the amount of the 2009 Bonds in rehun for the City's payxnent to the
15 counterparty of interest on such amount at a fixed rate; and
16 WHEREAS, such "synthetic fixed rate" may be in the range of 5%; and
17 WHEREAS, Minnesota Statutes, Section 475.54, Subdivision 16, permits a municipality
18 to enter into an agreement for an exchange of interest rates if the agreement either is with or is
19 guaranteed by a party whose equivalent obligations are rated A+ or better by a nationally
20 recognized rating agency, if the municipality has determined to issue obligations; and
21 WIIEREAS, the City may agree with the counterpariy to pay sums equal to interest at a
22 fixed rate on an amount not exceeding the outstanding principal amount of the obligations at the
23 time of payment, in exchange for an agreement by the counterparty to pay sums equal to interest
24 on a like amount at a variable rate; and
25 WFIEREAS, such agreement is not an"obligation" as defined in Minnesota Statutes,
26 Chapter 475, and a municipality may pledge to the payment of amounts due ar to become due
27 under the swap agreement, including terniination payments, sources of payment pledged or
28 available to pay debt service on the obligations or from any other available source of the
29 municipality; and
30 WHEREAS, the City anticipates reconstituting for the 2009 Bonds and the Swap the
31 same sources pledged by the City, RiverCentre Authority and Housing and Redevelopment
1786095v2
o s- ��9
1 Authority of the City of Saint Paul to the 1999 Bonds, with the same parity such pledged sources
2 have with respect to the City's Sales Taac Revenue Refunding Bonds (Civic Center Project),
3 Series 1996 (the "1996 Bonds"); and
4 WHEREAS, the City has solicited quotations for such exchange of interest rates, and the
5 Request for Interest Rate Swap (the "Request for Interest Rate Swap") has described the swap
6 agreement and its required terms in detail, and the Request for Interest Rate Swap is attached
7 hereto as E�ibit A and is hereby incorporated herein by reference:
8 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Saint Paul,
9 Miuuesota, as follows:
10 l. Determination to Issue 2009 Bonds. The City hereby determines to issue the
11 2009 Bonds in 2009 on or before May 1, 2009, to refund the 1999 Bonds, in the initial aggregate
12 principal amount of $66,300,000, or such greater or lesser amount as shall be sufficient to refund
13 the 1999 Bonds, pay costs of issuance and insurance premiums, and establish a reserve. The
14 2009 Bonds shall be variable rate demand bonds on which the interest rate varies weekly equal to
15 100% of the L,ondon Inter-Bank Offering Rate ("LIBOR") on obligations maturing in a month
16 and is paid on the first day of each month. The 2009 Bonds may haue liquidity support from a
17 bank and may have credit support from a bank or bond insurer. The 2009 Bonds shall mature on
18 November 1 of the years and in the amounts set forth on Eachibit B attached hereto and hereby
19 made a part hereof.
20 2. Approval of A�reement. An agreement for the exchange of interest rates
21 substantially in the form required by the Request for Interest Rate Swap is hereby approved, and
22 the Mayor or execurive assistant to the Mayor and the Director, Office of Financial Services, are
23 hereby authorized and directed to enter into an agreement for the exchange of interest rates with
24 a counterparty selected as set forth in paragraph 3, with such changes thereto or completions
25 thereof as such officers shall approve.
26 3. Deleaation of Authoritv. The Mayor and Directar, Office of Financial Services,
27 may select a swap provider that meets the selecrion criteria idenrified in the Request for Interest
28 Rate Swap, and set the synthetic fixed rate at the rate quoted by such swap provider, provided
29 that the synthetic fixed rate on the 2009 Bonds identified on the quotation may not exceed
30 5.25%.
31 4. Pled�e of Payxnent Sources; Deleeation. Payxnents on the swap agreement,
32 including any termination payments, shall be made from the City's general resources; provided
33 that the Mayor and Director, Office of Financial Services, may provide in the agreement that the
34 payment of a ternunation payxnent due on or before May 1, 2009, is limited as to source to a
35 pledge of sales tas revenues on a basis subordinate to the 1999 Bonds and the 1996 Bonds; and
36 provided fm�ther that the Mayor and Director, Office of Financial Services, may provide in the
37 agreement that payments, including termination payments, due after May 1, 2009, are limited as
38 to source to a pledge of the same sources of revenue that are pledged to the 1999 Bonds on the
39 same basis of parity with the 1996 Bonds as for the 1999 Bonds, if and when such pledges on
40 such basis are arranged. The City hereby pledges to the payxnent of the 2009 Bonds and to the
41 payxnent of amounts, including termination payments, under the agreement, its general resources
42 or, if the
1786095dZ
� ,
1 Mayor and Director, Office of Financial Services, have provided in the a�eement for limited
2 payment sources, only those limited payment sources.
Yeas Na s Absent
Benanav
Bostrom
Harris
Helgen
Lantr
Mont�omery
Thune
Adopted by Council: Date
Adoption Certified by Council Secretary
�
Approved by Mayor: Date
�
Requested by Department of:
OFFICE OF FINANCIAL SERVICES
By: �
Form Approved by City Attomey
By: C!�/�-( l'JI U�
vsw���z