HomeMy WebLinkAbout2000 08 14 Regular (3)
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PRAGER, MCCARTHY & SEALY, LLC
INVESTMENT BANKERS
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February 17, 1999
Mr. Harry Martin
Finance Director
City Of Winter Springs
1126 East State Road 434
Winter Springs, FL 32708
Re: Request for Proposals for Underwriting Services
City of Winter Springs
Dear Mr. Martin:
On behalf of Prager, McCarthy & Sealy ("PM&S"), it is a pleasure to present you with this
response to the City's RFP. I believe as you review our credentials, you will find that we
are indeed a unique firm that stresses client relationships with a refreshing emphasis on
integrity, innovation and insight. We are a firm committed to redefining investment
banking by offering broad, strategic advice coupled with expert market execution.
Our experience and accomplishments include the following:
· During 1998, PM&S served as Senior Manager on 39 Florida tax-exempt issues
totaling $651 million which ranked us as number 2 in the State in number of issues.
· PM&S has served as Senior Manager to nine (9) local governments in Florida in
their successful efforts to enter the water and wastewater business.
· Our focus is on smaller issues with many of our issues in the $5 to $10 million
range.
· We are the largest underwriter of special assessment bonds in the State and almost
single-handedly have created the lender base for non-rated issues.
· PM&S has been responsible for obtaining bond insurance on unique credits.
We look forward to answering any questions you may have.
Sincerely,
PRAGER, MCCARTHY & SEALY
~~
Douglas J. Sealy
Managing Director
200 SOUTH ORANGE AVENUE SUITE 1900 ORLANDO FLORIDA 32801 TEL 407 481 9182 FAX 407 849 1496
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PROPOSAL FOR
UNDERWRITING SERVICES
FOR
CITY OF WINTER SPRINGS
FEBRUARY 17, 1999
200 SOUfH ORANGE AVENUE, SUITE 1900, ORLANDO, FLORIDA 32801
489 FIFfHAVENUE, 34TH FLOOR, NEW YORK, NEW YORK 10017
ONE MARITIME PLAZA, 10TH FLOOR, SAN FRANCISCO, CALIFORNIA 94111
9907 GEORGETOWN PIKE, SUITE 203, GREAT FALLS, VA 22066
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TABLE OF CONTENTS
Firm History and Organizational Structure ...................... Section 1
Personnel Qualifications and Experience .......................... Section 2
City of Winter Springs Prior Experience........................... Section 3
Senior Managed/Co-Managed Florida Financings ........... Section 4
Rating Strategy .......... ...................................................... Section 5
Fees and Expenses ........................................................... Section 6
Marketing Approach/Credit Approval Process................. Section 7
Litigation..... ................. ...... ............................................ Section 8
MSRB Rule G-38 ............................................................ Section 9
Conflict of Interest..................... ..:... ............................... Section 10
References....................................................................... Section 11
Why Prager, McCarthy & Sealy ....................................... Section 12
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PRAGER, MCCARTHY & SEALY
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Q;testion 1. Provide a brief history and organizational structure of your firm:
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Background
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Extensive Senior-Managed
Banking Experience
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Capital Position and Structure
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Affiliation with a Number of
Financial Services Organizations
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Prager,
McCarthy &
Sealy
Arthur Rock &
Company
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PMLAdvisors
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Prager, McCarthy & Sealy was established in November 1987 as
a full-service national public finance banking and trading firm.
The firm currently employs twenty four investment banking
professionals, fifteen underwriting, sales and trading
professionals and ten support personnel in offices located in San
Francisco, New York, Orlando, and Great Falls, Virginia.
Virtually every senior investment banker within the firm has had
significant prior senior-level experience at other major Wall
Street firms. The firm's banking staff offers expertise in all
major areas of tax-exempt and taxable municipal finance,
including public power, water, transportation, resource recovery
and solid waste disposal, higher education, housing and
redevelopment, real estate finance and derivative products.
In the years since its inception in 1987, the firm has served as
senior manager in connection with tax-exempt and taxable
municipal financings exceeding $6 billion. However, including
experience accumulated while at other firms, the investment
banking professionals at Prager, McCarthy & Sealy have senior-
managed transactions totaling well over $100 billion over the
last fifteen years. We count among our major clients such
issuers as Stanford University, the California Institute of
Technology, Dartmouth College, the University of Southern
California, The Walt Disney Company, Champion Paper
Company and U.S. Home Corporation.
The capital structure of Prager, McCarthy & Sealy provides
access to the firm's limited partners' equity holdings which are
in excess of $2 billion. A portion of this capital can be dedicated
exclusively to the firm on an as-needed basis to support
transactions in which we are involved. A1> a consequence of this
financial backing, the firm is able to senior-manage bond issues
in the hundreds of millions of dollars. In fact, given our net
capital position and funding arrangement with our limited
partners, there virtually is no limit to the bond issue size that
Prager, McCarthy & Sealy would be willing and legally able to
underwrite as either book-running senior manager or as co-
manager.
The firm also is affiliated with several other financial service
firms in which the same limited partners have a major financial
interest, as follows:
Arthur Rock
Warren Hellman
Tully Friedman
Osterweiss
Capital
Management
Volpe, Welty &
Company
Farallon Capital
Partners
Hellman &
Friedman
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Arthur Rock & Co.
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Farallon Capital Partners, L.P.
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Hellman & Friedman
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Osterweis Capital
Management, Inc.
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Volpe, Brown & Whelan, LLC
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Limited Partners
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PRAGER, MCCARTHY & SEALY
Boutique venture capital firm established to provide financial
backing and ongoing managerial expertise to high-technology
firms in Northern California.
Formed in January, 1990 as a limited partnership to invest in
the securities of companies which are undergoing extraordinary
corporate transactions or reorganizations.
Founded in 1984 by F. Warren Hellman and Tully M. Friedman
to make investments that offer superior risk-adjusted rates of
return in companies characterized by talented management and
to provide top-quality merger and acquisition and other
financial advisory services to a select group of clients.
Founded in April, 1983 by John S. Osterweis to provide
portfolio management services, the firm focuses on undervalued
equity opportunities.
An investment banking firm which provides financial advice as
well as equity and bond underwriting services for a highly select
group of emerging entrepreneurial companies.
Set forth below are brief biographies of the firm's limited
partners.
Arthur Rock
A founder and director of Apple, Intel and Teledyne, as well as
other private and public companies. Mr. Rock is widely
recognized as one of the founding fathers of the modern
venture capital industry.
F. Warren Hellman
General Partner of Hellman & Friedman, a private investment
firm headquartered in San Francisco; Former President of
Lehman Brothers; Former Chairman of Shearson Lehman
Hutton/American Express.
Tully M. Friedman
General Partner of Hellman & Friedman, a private investment
firm headquartered in San Francisco; Former Managing
Director and Director of Corporate Finance Department,
Salomon Brothers Inc.
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PRAGER, MCCARTHY & SEALY
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Question 2. Name, qualifications, experience and location of those persons who will be
assigned to work with the City Staff, Financial Advisor and Legal Counsel:
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Douglas ]. Sealy
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Kevin P. Mulshine
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~dia ]. Brown
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Douglas J. Sealy joined Prager, McCarthy & Sealy as Managing Director in 1991
and manages the New York and Orlando investment banking operations. Mr.
Sealy has specialized in all facets of corporate-related and real estate transactions
during the course of his 25-year career in municipal finance. Prior to joining the
firm, Mr. Sealy was a Senior Vice President and Principal of Donaldson, Lufkin &
Jenrette, specializing in special district infrastructure finance and economic
development. Prior to his six years at Donaldson, Lufkin & Jenrette, Mr. Sealy
was with Goldman, Sachs and Company for 16 years where he headed the firm's
corporate-related business. Mr. Sealy's special tax district experience spans twenty
years and includes special district financing in Colorado, Arizona, California,
Florida and Georgia.
Mr. Sealy is a 1970 graduate of Washington University (St. Louis) with a B.A.
degree in Economics.
Since becoming an Investment Banker in 1986, Mr. Mulshine has served as
Investment Banker and Financial Advisor on numerous bond issues, with
emphasis on utility acquisition and expansion bond financings. As a C.P.A. and
C.M.A., Mr. Mulshine is uniquely qualified to analyze the financial position of
his clients. His analytical abilities, which have been enhanced by his educational
background as a student and teacher, have enabled him to provide local
governments with the most cost effective solutions to structuring bond issues.
His clients have included the Counties of St. Lucie, Martin, Collier and
Hillsborough; the Cities of Tallahassee, Miramar, Pembroke Pines, West Palm
Beach, North Miami, Pompano Beach and Fort Pierce, the Seacoast Utility
Authority, the Florida Municipal Power Agency, the Sebring Utility Authority
and the Metropolitan Water District of Southern California. .
Prior to joining Pra~er, McCarthy & Sealy in January 1996, Mr. Mulshine
worked as a Senior VIce President at William R. Hough & Co. and was a senior
accountant with Ernst & Whinney. For two years, Mr. Mulshine served as a
teacher of accounting and economics at the University of Michigan Business
School. Mr. Mulshine holds a B.B.A. in Accounting from the University of South
Florida and a M.B.A. with honors from the University of Michigan. Mr.
Mulshine is a Certified Public Accountant, a Certified Management Accountant
and a NASD Registered Principal and General Securities Representative.
Ms. Brown, Vice President in Prager, McCarthy & Sealy's Orlando office, joined
the firm this year, and has been working on infrastructure financings for special
districts, including assessment and utility financings. Prior to joining the firm,
Ms. Brown was the Fiscal Administrator for Orange County Government,
Orlando, Florida. As the County's Fiscal Administrator, Ms. Brown was
responsible for mana~ing all debt-related transactions and working on other fiscal
projects such as mumcipal annexation, tax increment financing and special district
financing. Prior to Ms. Brown's tenure with the County, she worked for Public
Financial Management, Inc. ("PFM"), the Nation's largest independent financial
advisory firm focusing solely on state and local government financings. During
her four years with PFM, Ms. Brown worked with Florida counties, cities, school
districts and transportation authorities. Ms. Brown was financial advisor to several
Central Florida issuers including Orange County, the Greater Orlando Aviation
Authority, the Orlando-Orange County Expressway Authority and the Central
Florida Regional Transportation Authority
Ms. Brown received a B.A. degree from Florida State University and holds an
MBA degree with an emphasis in finance and entrepreneurship from the
University of Florida.
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PRAGER, MCCARTHY & SEALY
Question 3. Has your firm, or members of your firm, had any prior experience as
senior manager or co-manager on previous City of Winter Springs issues? If so,
please describe:
Prager, McCarthy & Sealy has had no prior experience as Senior Manager or Co-
Manager on previous Winter Springs issues. In 1989, Douglas J. Sealy, a Managing
Director of Prager, McCarthy & Sealy, while a Senior Vice President of Donaldson,
Lufkin & Jenrette, acted as sole manager of a water and sewer revenue bond issue
issued by the City to acquire the utility assets of General Development Corporation.
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PRAGER, MCCARTHY & SEALY
Question 4. Please list the Florida financings your firm has serviced as a Senior
Manager or Co-Manager over the past three (3) years, the type of revenue source,
size of transaction, T.!. C. and underwriting cost for each issue:
Please see following chart.
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Special District Finance Experience
1987 to Present
!~afli!i,~:f
12/30/98
12/30/98
12/29/98
12/22/98
12/22/98
12/21/98
12/17/98
12/10/98
12/9/98
12/8/98
11/24/98
11/10/98
10/29/98
10/14/98
10/01/98
09/18/98
09/01/98
08/18/98
08/10/98
08/06/98
07/30/98
07/16/98
07/01/98
06/29/98
06/18/98
04/16/98
04/14/98
03/11/98
02/26/98
01/06/98
01/06/98
12/29/97
12/29/97
12/23/97
12/11/97
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PRAGER, MCCARTHY & SEALY
North Springs Improvement District
North Springs Improvement District
Heritage Isles Community Development District
Stoneybrook Community Development District
Stoneybrook Community Development District
ChampionsGate Community Development District
Heritage Springs Community Development District
Heritage Palms Community Development District
City of Orlando, Florida (Conroy Road Interchange
Project)
Westchase East Community Development District
Heritage Oak Park Community Development District
Overoaks Community Development District
Heritage Pines Community Development District
St. Lucie West Services District (Cascades Project)
Village Center Community Development District
Lexington Oaks Community Development District
Meadow Pointe II Community Development District
Heritage Oak Park Community Development District
River Ridge Community Development District
St. Lucie County, Florida
Town of Jupiter Island, Florida
Village Community Development District No.3
Brooks of Bonita Springs Community Development District
Reserve Community Development District
Arbor Greene Community Development District
Heritage Isles Community Development District
Oakridge Community Development District
Sumter County Industrial Development Authority
Village Community Development District No.2
Village Center Community Development District
Village Center Community Development District
Heritage Harbor Community Development District
Heritage Harbor Community Development District
Heritage Pines Community Development District
Turtle Run Community Development District
Water Management Bonds, Series 1998
Water and Sewer Revenue Bonds, Series 1998
Special Assesment Revenue Bonds, Series 1998B
Capital Improvement Revenue Bonds, Series 1998A&B
Golf Course Revenue Bonds, Series 1998
Capital Improvement Revenue Bonds, Series 1998A&B
Bond Anticipation Notes, Series 1998
Capital Improvement Revenue Bonds, Series 1998
Special Assessment Revenue Bonds, Series 1998A&B
Capital Improvement Revenue Bonds, Series 1998
Special Assessment Revenue Bonds, Series 1998A&B
Capital Improvement Revenue Bonds, Series 1998 A&B
Capital Improvement Revenue Bonds, Series 1998A&B
Capital Improvement Revenue Bonds, Series 1998
Utility Revenue Refunding Bonds, Series 1998A; Subordinate Utility
Revenue Bonds, Series 1998B
Special Assessment Revenue Bonds, Series 1998A&B
Capital Improvement Revenue Bonds, Series 1998A&B
Bond Anticipation Notes, Series 1998
Capital Improvement Revenue Bonds, Series 1998
Special Assessment Bonds, Series 1998A (South Hutchinson Island-
North District Wastewater System)
Utility System Revenue Bonds, Series 1998
Special Assessment Revenue Bonds, Series 1998
Capital Improvement Revenue Bonds, Series 1998A&B
Utility Revenue Refunding Bonds, Series 1998A&B
Special Assessment Revenue Bonds, Series 1998
Special Assessment Revenue Bonds, Series 1998A
Special Assessment Bonds, Series 1998
Industrial Development Revenue Bonds, Series 1998 (Little Sumter
Utility Company Project)
Special Assessment Revenlle Bonds, Series 1998
Stlbordinate Recreational Revenue Bonds, Series 1998C
Recreational Revenue Refunding Bonds, Series 1998A
Special Assessment Revenue Bonds, Series 1997A&B
Recreational Revenue Bonds, Series 1997
Bond Anticipation Notes, Series 1997
Water Management Benefit Special Assessment Refunding Bonds, Series
1997
"" ,'~' . ..,.. ..iu;
<:;Y:~;3t~:~,,'
5.07 13.50
5.13 13.00
6.04 15.00
5.93 15.00
7.00 15.00
6.24 20.00
6.15 8.75
5.50 15.00
5.65 9.11
6.33 6.10 20.00
8.90 6.56 20.00
6.9 6.40 20.00
13.1 5.82. 15.00
2.56 17.50
31.20 4.95 8.00
13.7 5.83 17.50
14.24 5.61 14.00
1.0 6.53 20.00
17.83 5.90 15.00
.91 6.98 17.50
46.85 5.03 9.00
12.63 5.43 14.00
28.63 6.14 17.50
5.00 6.62 20.25
10.93 6.22 20.00
12.45 5.99' 15.00
3.60 5.34 24.00
6.00 6.74 14.00
6.67 5.38 14.00
5.34 7.37 9.75
60.18 5.28 14.00
12.88 6.15 15.00
7.90 7.91 15.00
4.40 6.26 2.95
6.84 4.97 12.50
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Special District Finance Experience
1987 to Present (continued)
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PRAGER, MCCARTHY & SEALY
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12/11/97
11/19/97
11/19/97
11/13/97
11/13/97
11/06/97
10/30/97
10/14/97
09/17/97
08/27/97
07/15/97
07/08/97
06/05/97
06/05/97
05/15/97
04/30/97
04/30/97
04/24/97
04/09/97
03/26/97
01/30/97
12/31/96
12/19/96
12/17/96
12/12/96
11/21/96
08/28/96
08/16/96
07/31/96
07/30/96
07/17/96
06/27/96
06/27/96
06/12/96
06/25/96
05/09/96
04/04/96
Parkway Center Community Development District
Tampa Palms Open Space and Transportation CDD
North Springs Improvement District
North Springs Improvement District
Remington Community Development District
Piney-Z Community Development District
Sumter County Industrial Development Authority
Bobcat Trail Community Development District
Grand Haven Community Development District
Village Center Community Development District
Celebration Community Development District
Grand Haven Community Development District
Westchase East Community Development District
Northwood Community Development District
Cory Lakes Community Development District
Cheval West Community Development District
Tampa Palms Open Space and Transportation CDD
Grand Haven Community Development District
Meadow Pointe II Community Development District
West Lake Community Development District
Fishhawk Community Development District
Arbor Greene Community Development District
Tampa Palms Open Space and Transportation CDD
Naples Heritage Community Development District
Cory Lakes Community Development District
Meadow Pointe II Community Development District
Julington Creek Community Development District
Village Community Development District No.2
Deer Island Community Development District
Westchase Community Development District
Village Center Community Development District
Overoaks Community Development District
Tampa Palms Open Space and Transportation CDD
Lake Bernadette Community Development District
Village Center Community Development District
Eastlake Oaks Community Development District
Capita Improvement Revenue Bonds, Series 1997 (Lake Charles
Project)
Special Assessment Revenue Refunding Bonds, Series 1997
Special Assessment Revenue Bonds, Series 1997 (Area 3 Project)
Special Assessment Bonds, Series 1997 (Heron Bay Project)
Special Assessment Bonds, Series 1997A&B (Parkland Isles Project)
Special Assessment Bonds, Series 1997A&B
Capital Improvement Revenue Bonds, Series 1997A&B
Industrial Development Reventle Bonds, Series 1997 (Little Sumter
Utility Company Project)
Capital Improvement Revenue Bonds, Series 1997A&B
Special Assessment Bonds, Series 1997B
Subordinate Recreational Revenue Bonds, Series 1996B
Special Assessment Bonds, Series 1997A and 1997B
Special Assessment Bonds, Series 1997A
Capital Improvement Revenue Bonds, Series 1997
Special Assessment Revenue Bonds, Series 1997
Special Assessment Revenue Refunding Bonds, Series 1997
Special Assessment Refunding Bonds, Series 1997
Capital Improvement Revenue Bonds, Series 1997 (Area 7 Phase 2)
Bond Anticipation Notes, Series 1997
Capital Improvement Revenue Bonds, Series 1997
Special Assessment Bonds, Series 1997
Special Assessment Revenue Bonds, Series 1996
Special Assessment Revenue Bonds, Series 1996
Capital Improvement Revenue Bonds, Series 1996
Capital Improvement Revenue Bonds, Series 1996
Special Assessment Revenue Bonds, Series 1996
Capital Improvement Revenue Bonds, Series 1996
Special Assessment Bonds, Series 1996A
Special Assessment Revenue Bonds, Series 1996
Capital Improvement Revenue Refunding Bonds, Series 1996
Special Assessment Refunding Revenue Bonds, Series 1996
Recreational Revenue Bond Anticipation Notes, Series 1996
Capital Improvement Revenue Bonds, Series 1996
Special Assessment Revenue Bonds, Series 1996
Special Assessment Revenue Bonds, Series 1996A
Recreational Revenue Bonds, Series 1996A&B
Special Assessment Revenue Bonds, Series 1996
." --.
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6.50 17.50
21.10 8.50 N/A
5.40 8.00 15.00
7.95 7.00 15.00
22.63 6.58 15.00
17.20 8.09 20.00
12.87 6.96 20.00
8.54 7.25 14.00
10.60 7.24 25.00
9.10 7.03 20.00
5.77 6.50 14.00
19.37 5.50 12.50
32.60 6.50 20.00
4.02 7.30 15.00
3.30 6.50 15.00
12.34 8.37 20.00
4.23 6.99 20.00
4.40 7.69 15.00
15.00 7.25 15.00
3.62 6.30 14.00
3.23 5.87 29.25
8.17 7.62 20.00
167.28 7.38 20.00
3.87 7.50 15.00
16.42 6.23 15.00
6.40 8.37 20.00
2.59 6.25 14.00
11.22 8.25 20.49
6.15 7.62 14.00
15.65 9.00 3.20
8.78 6.01 14.00
11.36 6.50 10.00
13.56 8.25 20.00
3.92 8.50 23.90
4.08 8.16 18.00
25.00 6.50 19.24
1.56 7.93 15.00
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PRAGER, MCCARTHY & SEALY
Question 5. Assuming the issues would qualify for bond insurance, what rating
strategy for marketing the bonds would you recommend?
We would strongly suggest that the City pursue underlying ratings from Moody's,
Standard & Poor's, and/or Fitch ICBA, since it will influence the bond insurers' fee
proposals. In addition, the bonds can be more widely distributed if underlying
rating accompany bond insurance which should result in lower interest costs.
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PRAGER, MCCARTHY & SEALY
Question 6. Provide an estimate of total fees and expenses your firm would charge
assuming bond insurance for the following sized bond issues:
$1 Million - $5 Million
$5 Million - $10 Million
Total Fees and Expenses
$1-5 Million
$5-10 Million,
$10.00/Bond
$7.50/Bond
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PRAGER, MCCARTHY & SEALY
Question 7. Please describe your approach to marketing, both rated and non-rated
issues, type of investor you would seek and geographical location of where the bonds
would be marketed from. Should the issue be non-rated, does your firm have a
credit approval process? If so, what is that process?
Obviously, there is a major difference in the investor base between rated and non-
rated issues. Almost all rated bonds are issued in denominations of $5,000 and very
widely distributed, in most instances nationwide, but with full emphasis on Florida
retail distribution. All of our rated issues are marketed from our sales and trading
desk in New York.
As you will see from Question 3, Prager, McCarthy & Sealy is the largest
underwriter of non-rated debt in the State of Florida. Our non-rated issues are sold
in denominations of $100,000 and marketed by our investment bankers in Orlando
in conjunction with our sales and trading desks in New York and San Francisco.
Our non-rated issues are sold solely to insitutional investors nationwide. During the
past 5 years, we have been responsible for developing the non-rated lender base for
Florida issues and count some 45 institutional investors nationwide as offerees of
Florida non-rated debt.
The Firm's credit committee is chaired by Douglas J. Sealy, Managing Director of
the Orlando office, who has full authority of credit approval.
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PRAGER, MCCARTHY & SEALY
Question 8. Identify fully the extent to which your firm or individual partners or
employees are the subject of any ongoing municipal securities investigation, are a
party to any municipal securities litigation or arbitration, or are the subject of a
subpoena in connection with a municipal securities investigation. In addition,
include any such investigations which concluded in an enforcement or disciplinary
action ordered or imposed in the last three years.
Neither the Firm or its individual partners, nor any of its employees, are the subject
of any ongoing municipal securities investigation, are a party to any municipal
securities litigation or arbitration, or are the subject of a subpoena in connection
with a municipal securities investigation. Additionally, there has been no
enforcement or disciplinary action ordered or imposed in the last three years.
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PRAGER, MCCARTHY & SEALY
Q;testion 9. MSRB Rule G-38: Please indicate whether your firm has retained
the services of a consultant who is not regularly employed by the firm who witt
represent the firm)s interest with respect to this RFP. Provide the name of the
consultant and the compensation. If the consultant is covered by the firm)s most
recent G-38 report) you may attach and reference the report. If the consultant is not
included in the most recent report) provide the requested information. Please
provide a statement of positive assurance indication that your firm and all of its
representatives are not presently being investigated or in violation of Rule G-38, or
attach a statement describing the current status of such investigations or violations:
The Firm has not retained the services of a consultant who is not regularly employed
by the Firm who will represent the Firm's interest with respect to this RFP.
The Firm and all of its representatives are not presently being investigated or in
violation of Rule G-38.
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PRAGER, MCCARTHY & SEALY
Q;testion 10. Will the selection of 'your firm result in any current or potential
conflict of interest? If so, your firm's response must specify the party with which the
conflict exists or might arise, the nature of the conflict and whether your firm would
step aside or resign from the engagement or representation creating the conflict.
Please include Conflict of Interest Statement.
The selection of our Firm would not result in any current or potential conflict of
interest.
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PRAGER, MCCARTHY & SEALY
QJtestion 11. Provide a list of five (5) references with a contact name, telephone
number and fax number for similar issues who may be contacted by the City.
G. Michael" Mickey" Miller
Director of Finance
City of Orlando
400 South Orange Avenue
Orlando, Florida 32801
0: 407-246-2341
F: 407-246-2707
Robert B. Inzer
City Treasurer Clerk
City of Tallahassee
City Hall, 2nd Floor
300 South Adams Street
Tallahassee, FL 32301
0: 850-891-8131
F: 850-891-8210
Jim Spurgeon
Town Manager
Jupiter Island
P.O.-Box 7
HobeSound,FL 33475
0: 561-546-5011
F: 561-546-6228
Gary Moyer, P.A.
District Offices
10300 NW 11th Manor
Coral Springs, FL 33071
0: 954-753-0380
F: 954-755-6701
Pete Wahl
Village Center Community Development District
1133 Main Street
The Villages, FL 32159
0: 352-753-4508
F: 352-753-6430
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PRAGER, MCCARTHY & SEALY
Question 12. In two (2) pages or less, please describe why your firm should be
selected as either the Senior Manager or Co-Manager to the City:
The CityJs investment banker must be able to analyze the underlying credit and
communicate this analysis to potential municipal bond insurers and bond investors -
Prager, McCarthy & Sealy has unmatched experience in analyzing unique credits,
and in fact our firm was responsible for the first refinancing of a community
development district in the State of Florida, when that district was only between 65
and 75% developed (in terms of percentage of the annual assessment being paid by
actual end users/residents versus developers). This district, Tampa Palms
Community Development District, also had significant undeveloped and developed
commercial acreage which presented a challenge in terms of the communication of
its credit strengths and its ability to service its debt, despite a large concentration of
assessments being paid by a limited number of payers. In our first community
development district refinancing (Tampa Palms), and with the other nine (9)
refinancings that we have structured over the past three (3) years, we have struggled
to interpret unique credit strengths and have learned to provide creative forms of
additional security in cases where the development status of an issue fell short of
bond insurers, MBIA Insurance Corporation and Asset Guaranty Insurance
Corporation, will credit our firm with their education and understanding of
community development district finance in the State of Florida.
In cases where an issue has not yet met the development thresholds needed to
secure a municipal bank insurance commitment, we have structured strong non-
rated refinancings and have analyzed senior/subordinate structures where a
significant portion of the debt is insured with the remainder uninsured. In certain
cases, the blended interest rate from the two different debt components has allowed
an issuer to accomplish its goals. In these cases we have utilized our expertise and
strong relationships with institutional purchasers of community development district
debt in order to attractively price the non-rated portions of debt.
We Are The Preeminent Florida Special Assessment Investment Banker
Our vast experience has taught us that special assessment and tax increment bonds
issues involve aspects of real estate finance that transcend the traditional boundaries
of public finance, and require an investment banker to develop a specialized
knowledge of real estate finance. T4e financing plan for a real estate-related bond
issue must be structured to enhance the project, and must not set parameters which
cannot be reasonably attained by the Developer. In addition, from our experience
nationwide, we can testify that special assessment law is unique to each state and the
unsurpassed Florida special assessment experience that we possess will be vital to the
success of the City's financings.
From our experience, we have learned not only how to market bonds already
structured, but from the ground up, how: (1) to develop an assessment
methodology; (2) to derive the assessment so as to be able to modify it over time to
account for change~ in land use; (3) to review the assessment liens upfront to judge
the creditworthiness of the project in its initial existence as well as over time as the
project is built and developed; and (4) to physically put the assessments on a county
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PRAGER, MCCARTHY 6- SEALY
tax roll or help the issuer to levy the assessment itself. While much of the assessment
process has been delineated and thoughtfully structured, these issues are critical to
the marketing and pricing of a bond issue, and must be adequately analyzed and
communicated to bond insurers, rating agencies, and potential bond holders. These
issues are frequently overlooked by those not involved in a day-to-day basis with
these types of bond issues, and we know from experience that they are crucial to the
ultimate success of special assessment bonds.
We Get the Best Price
PM&S has an excellent track record in the marketing of tax-exempt securities. Our
performance in the marketing of AAA/ Aaa tax-exempt bonds for sophisticated
Florida issuers, such as Disney's special districts and the Town of Jupiter Island, is
endorsed by our long-term relationships. PM&S has the ability to provide
aggressive pricing due to our relationships with the major institutional investors.
This is a claim made by many firms, so it is important for the City to understand the
basis of our institutional relationships. PM&S is the national leader in the
underwriting of higher yielding, non-rated, tax-exempt bonds. In fact, in Florida,
our firm underwrites more non-rated, tax exempt bonds than all of our competitors
combined. AAA/ Aaa rated securities are more of a commodity that is purchased by
institutions literally over the phone, without site visits or personal contact. Non-
rated securities, which are attractive to institutions due to a higher yield, require a
much higher level of research, site visits and due diligence. The institution's level of
comfort with the underwriter is paramount in the marketing of non-rated bonds.
When PM&S has served as Senior Manager on AAA/ Aaa rated bond issues,
institutions have accepted aggressive pricing as part of a long-term relationship with
our firm.