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RESPONSE - RFP - 7471 UNDERWRITING SERVICES FOR 2013 TAX INCREMENT REVENUE BONDS
STRICTLY Private and Confidential Fort Collins Urban Renewal Authority Request for Proposal 7471 Underwriting Services for 2013 Tax Increment Revenue Bonds Due: 3:00 p.m. MST, Friday, February 15, 2013 ii Disclaimer RBC Capital Markets, LLC (RBCCM) is providing the information contained in this document for discussion purposes only in anticipation of serving as underwriter to The Fort Collins Urban Renewal Authority (the “Authority”). The primary role of RBCCM, as an underwriter, is to purchase securities, for resale to investors, in an arm’s-length commercial transaction between the Authority and RBCCM and that RBCCM has financial and other interests that differ from those of the Authority. RBCCM is not acting as a municipal advisor, financial advisor or fiduciary to the Authority or any other person or entity. The information provided is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of 1934. The Authority should consult with its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate. If the Authority would like a municipal advisor in this transaction that has legal fiduciary duties to the Authority, then the Authority is free to engage a municipal advisor to serve in that capacity. iii Table of Contents Page No. Disclaimer Cover Letter Required Response Items: Overview of RBC Capital Markets and Our Colorado Public Finance Presence .............................................. 1 Our Colorado Urban Renewal Authority Bonds Experience ............................................................................. 3 Public Finance Team ........................................................................................................................................ 7 Distribution Capabilities..................................................................................................................................... 9 Ratings Strategy................................................................................................................................................ 9 Preliminary Financing Structure...................................................................................................................... 12 Proposed Fees................................................................................................................................................ 15 Scope of Services ........................................................................................................................................... 16 Legal and Regulatory Issues........................................................................................................................... 18 Appendix 1: Signature Form Appendix 2: Denver Urban Renewal Authority’s Series 2010B-1 Moody’s Rating Report Appendix 3: Detailed Preliminary Series 2013 Financing Schedules iv RBC Capital Markets, LLC Municipal Finance 1200 17th Street, Suite 2150 Denver, Colorado 80202 February 15, 2013 Mr. Harold Hall Investment Administrator City of Fort Collins 215 N. Mason Street Fort Collins, Colorado 80522 Dear Mr. Hall: On behalf of RBC Capital Markets, LLC (RBCCM), we are pleased to present our response to the City of Fort Collins’ (the “City”) Request for Proposal to serve as underwriter for the Fort Collins Urban Renewal Authority’s (the “Authority) proposed Series 2013 Tax Increment Revenue Bonds. RBCCM is quite familiar with the City of Fort Collins, having provided the City with refunding updates for its debt obligations as well as serving as underwriter to area clients including Colorado State University and Poudre School District. As summarized below and described herein, we believe RBCCM is extremely qualified to serve as underwriter to the Authority. Leading Colorado Underwriter. RBCCM has over a 100-year history of providing public finance services to Colorado issuers and is consistently among the leading underwriters in the state. Our long history in and commitment to the state coupled with the firm’s municipal market expertise separate us from our competition. In fact, in 2012 Thomson Financial ranked RBCCM as the number 1 senior manager of negotiated Colorado bonds. Significant Global Presence and Resources. Following a period of significant stress on financial institutions in the U.S. and elsewhere, our parent the Royal Bank of Canada (RBC) remains one of the highest rated banks (Aa3/AA-/AA), and we have maintained our Double-A category rating for more than 20 years. RBC is currently the highest rated bank and swap counterparty among the top municipal underwriters. With a market capitalization of over $79 billion and assets of $800 billion, RBC remains one of the few financial institutions that can be relied upon to deliver world class investment banking capabilities and provide access to a significant and stable capital base. Given the firm’s strong financial and credit position, RBCCM stands committed to support any size underwriting for our municipal clients. Experienced Municipal Finance Specialists. RBCCM has assembled a comprehensive team of senior professional bankers and underwriters who are well-qualified to provide investment banking services to the Authority. Tom Wendelin and Christen Villalobos will lead the banking team. Tom has significant Colorado urban renewal authority and tax increment financing experience, having served as investment banker to Denver Urban Renewal Authority, The Plaza Metropolitan District No. 1, Lowry Redevelopment Authority and several other local districts. Marc Greer will serve as the underwriter on the TIF financing. These professionals are prepared to work closely with the Authority, its financial advisor and legal counsel to (i) structure the optimal refinancing, (ii) actively assist in the preparation of bond and legal documents, (iii) prepare materials and participate in all rating agency meetings (as needed), (iv) develop and execute marketing plans to generate the widest distribution of the Authority’s bonds and ultimately provide the lowest possible cost to the Authority. Full Service Municipal Investment Bank. RBCCM’s Municipal Finance Department is the largest business unit within RBCCM in the United States and one of RBCCM’s highest priorities nationally. The firm also maintains the largest municipal platform in the country, offering our municipal clients a full complement of services, including traditional investment banking, underwriting, remarketing, derivatives counterparty, investment advisory, investment products and balance sheet solutions including letters and lines of credit, direct lending and 2012 Colorado Underwriter Ranking Negotiated transactions from 1/1/2012-12/31/2012 Underwriter Par Amt (US$ mil) Rank Mkt. Share # of direct purchases. RBCCM has consistently been ranked among top 10 senior managers nationally by par amount and the number 1 senior manager nationally in 18 of the last 20 years by number of issues, giving us the most frequent market access. Unsurpassed Distribution Capabilities. The strength of RBCCM’s multi-tiered platform for distributing municipal bonds lies in our deep, regional roots. Our 33 institutional salespeople (dedicated exclusively to selling municipal bonds) are served by 42 municipal traders and underwriters, making our institutional sales force the largest in the nation. Why such a large institutional sales force? While we cover Tier I investors as well as any other Wall Street firm, our regional office network aggressively covers Tier II and III “middle market institutions” that have long been ignored by New York-centric firms. RBCCM maintains a stable and commanding presence in municipal markets as the most active underwriter in the nation. In addition, our 1,942 Wealth Management professionals manage more than $181 billion of investments in 830,000 accounts, $31.7 billion of which are municipal assets. Our 78 Colorado financial consultants serve over 29,485 Colorado accounts with over $6 billion of assets under management, of which $1 billion are municipal assets. Moreover, RBC maintains a Wealth Management office on Boardwalk Drive in Fort Collins that employs nine financial consultants. As your underwriter, we will work closely with the local office to generate local investor interest in the Authority’s financing. We appreciate the opportunity to submit a proposal in response to the Authority, and hope that you will agree that we are well qualified to serve as the Authority’s underwriter. In the meantime, please feel free to contact any of us if you have any questions about our proposal or would like to receive any additional information. Sincerely, RBC CAPITAL MARKETS, LLC Tom Wendelin Vice President (303) 595-1211 tom.wendelin@rbccm.com Christen Villalobos Associate (303) 595-1202 christen.villalobos@rbccm.com CC: Mr. Jim O’Neill, City of Fort Collins Mr. Jim Marine, BLX Group LLC Required Response Items REQUIRED RESPONSE ITEMS 1 Overview of RBC Capital Markets and Our Colorado Public Finance Presence 1) Please describe your firm’s tax-exempt underwriting activity in the national and Colorado markets since January, 2009. 2 pages The Royal Bank of Canada (RBC) is well positioned to serve and support the Fort Collins Urban Renewal Authority (the “Authority”) for the Authority’s proposed Tax Increment Revenue Bonds, Series 2013 to repay loans to the City of Fort Collins (the “City’) for the North College Avenue Renewal project. The Authority will benefit from working with a full-service financial institution with continued financial health, strong capitalization and high ratings (Aa3/AA-/AA). Established in 1869, RBC is the parent company of RBC Capital Markets, LLC (RBCCM) and is a publicly traded corporation listed on the TSX and NYSE under the symbol “RY.” RBC has more than 74,000 employees and holds strong market positions in numerous business segments globally. In addition to investment banking, we provide personal and commercial banking, wealth and asset management services, insurance, corporate banking, and transaction processing services on a global basis. With a market capitalization of over $79 billion and assets of $800 billion, RBC remains one of the few financial institutions which can be relied upon to deliver world class investment banking capabilities and provide access to a significant and stable capital base. RBC was recognized as Canada’s most respected corporation for the past six years by KPMG and Ipsos-Reid Annual Survey of Canadian Corporations. Additionally Global Finance magazine’s 2010, 2011 and 2012 ranking of the World’s 50 Safest Banks recognized RBC as the safest bank in North America. Over the last two years, RBC Capital Markets has played a significant role to the financing programs of the large issuers by providing investment banking, lending, and credit enhancement solutions. Headquartered in New York City, RBCCM is one of the top full-service investment banks and broker-dealers with over 6,500 professionals operating from 70 offices in 15 different countries. RBCCM’s Municipal Finance group is one of the largest in the country with 245 banking professionals located in 26 offices and over 70 municipal sales professionals, traders and underwriters in 18 offices. RBCCM regularly ranks among the top 10 firms of senior managed bond issues nationally by par amount, and has been the Number #1 ranked senior manager nationally by number of issues 18 of the past 20 years. As a result, we have an unmatched understanding of the current market dynamics and investor appetites and can price our deals more aggressively, decreasing the overall borrowing cost to our clients. RBCCM’s Municipal Finance Group is structured to provide our clients a complete menu of investment banking services, including underwriting, financial advisory and investment services; and nationally and regionally focused sales and trading activities for both taxable and tax-exempt bonds. Our Municipal Finance Group is organized as follows: RBC Municipal Finance Group Education General Government Health Care Transportation Public Higher Education Private Higher Education K-12 Education Student Loans Student Housing Unemployment Insurance Pension OPEB General Purpose Public Improvement Hospitals Clinics Retirement & Elder Care Facilities Assisted Living Mass Transit Highways Toll roads Streets Airports Housing Utilities Municipal Products Special Districts Single Family Multi-Family REQUIRED RESPONSE ITEMS 2 RBCCM is consistently ranked as a top senior managing underwriter in Colorado and has significant experience structuring and marketing district-type bonds, including Urban Renewal Authorities, in Colorado and other states. In Colorado, RBCCM has a regional municipal finance office in downtown Denver with 14 dedicated municipal finance professionals. We pride ourselves as a national firm with a seasoned Colorado banking team and Wall Street distribution and underwriting capabilities, and ranked as the number 1 negotiated senior manager of Colorado transactions in 2012. 2012 Top 10 Negotiated Senior Manager Rankings National Rankings Colorado Rankings Senior Manager Par Amount (US$ mil) Rank Mkt. Share # of Issues Senior Manager Par Amount (US$ mil) Rank Mkt. Share # of Issues Bank of America Merrill Lynch 38,672.7 1 13.2 319 RBC Capital Markets 1,871.3 1 27.6 32 Citi 32,167.7 2 11.0 328 Barclays 939.7 2 13.9 5 J P Morgan Securities LLC 31,088.6 3 10.6 243 Stifel Nicolaus & Co Inc 658.8 3 9.7 26 Morgan Stanley 22,889.0 4 7.8 205 J P Morgan Securities LLC 592.1 4 8.7 8 RBC Capital Markets 20,235.5 5 6.9 605 Goldman Sachs & Co 556.0 5 8.2 4 Barclays 18,402.9 6 6.3 119 George K. Baum & Company Inc 531.1 6 7.8 52 Goldman Sachs & Co 17,338.2 7 5.9 94 Citi 306.0 7 4.5 2 Wells Fargo & Co 13,230.7 8 4.5 198 Robert W. Baird & Co Inc 295.8 8 4.4 5 Raymond James Morgan Keegan 9,053.5 9 3.1 398 D A Davidson & Co 225.0 9 3.3 18 Stifel Nicolaus & Co 7,920.3 10 2.7 436 Ziegler 199.4 10 2.9 2 Industry Total $292,614.6 - 100.0 8,268 Industry Total $6,774.2 - 100.0 169 Excludes preliminary issues, notes and private placements. Source: Thomson Financial (SDC) 01/01/12 – 12/31/12 The table below summarizes RBCCM’s sole and senior managed negotiated national and Colorado tax-exempt underwriting experience since 2009. In Colorado, RBCCM has sole or senior managed 92 tax-exempt transactions, totaling $4.0 billion, more than any other firm. Recent Colorado clients served include The Plaza Metropolitan District No. 1, Poudre School District, Colorado State University, City & County of Broomfield, Denver Urban Renewal Authority and City of Colorado Springs. Tax-Exempt Underwriting Activity Since 2009 2012 2011 2010 2009 Tax-Exempt Activity Par ($mils) # of Issues Par ($mils) # of Issues Par ($mils) # of Issues Par ($mils) # of Issues National $16,717.3 556 $9,737.1 447 $13,271.5 492 $14,650.9 466 Colorado $1,713.7 29 $659.7 20 $716.9 23 $948.4 20 Source: Thomson Financial. Excludes taxable issues, competitive issues, notes and private placements. REQUIRED RESPONSE ITEMS 3 Our Colorado Urban Renewal Authority Bonds Experience 2) Please provide a listing and a description of your firm’s experience in the underwriting of Urban Renewal Authority bonds in Colorado starting in 2003. Include a summary of the security for individual transactions, including the pledge of property tax increment, sales tax increment, public improvement fees, metropolitan district tax pledges, moral obligation pledges, or other security. Transactions in which TIF was pledged by a URA to support the bonds of another issuer may be included in this response. Please provide the original and the current bond ratings, if any, and describe any credit enhancement used to support the issue. List the dollar volume of your underwriting in the TIF revenue bonds for the years 2010, 2011, and 2012. As the largest and most active special district and tax increment financing (TIF) banking practice of any firm in the United States, the Authority will benefit from RBCCM’s specific expertise to best structure and sell the Authority’s upcoming Series 2013 financing. In the last ten years, RBCCM has served as senior manager, co-manager or financial advisor on $4.5 billion of TIF transactions nationally. In 2010, 2011 and 2012, RBCCM served as underwriter (senior or co-manager) on $223.54 million, $158.02 million and $92.08 million of TIF financings respectively. Year to date in 2013, RBCCM has served as sole underwriter to The Plaza Metropolitan District’s (Lakewood, Colorado) $98.6 million Revenue Refunding Bonds (Tax Increment Supported), Series 2013. The map below illustrates our special district clients. As noted, Colorado is one of our largest special district practices in the country. RBCCM’s Special District Clients Senior Manager Co-Manager Financial Advisor Florida Creekside Comm Dev Dist Fiddlers Creek Comm Dev Dist Miramar Lakes Comm Dev Dist Pelican Marsh Comm Dev Dist Pine Air Lake Comm Dev Dist Port St Lucie Comm Dev Dist Tara Comm dev Dist Venetian Isles Comm Dev Dist Verandah West Comm Dev Dist Arizona Cortina Comm Facs Dist Cottonflower Comm Facs Dist Eagle Mountain Comm Facs Dist Festival Ranch Comm Facs Dist Gladden Farms Comm Facs Dist Goodyear Comm Facs Gen Dist Hassayampa Comm Facs Dist Litchfield Park Comm Facs Dist Marley Park Comm Facs Dist Mission Royale Comm Facs Dist Palm Valley Comm Facs Dist Pronghorn Ranch Comm Facs Dist Quail Creek Comm Facs Dist Show Low Comm Facs Dist Stoneridge Comm Facs Dist Sundance Comm Facs Dist Toho-Tolani Co Imp Dist Verrado Western Overlay CFD Villagro Comm Facs Dist Vistancia Comm Facs Dist Watson Road Comm Facs Dist Westpark Comm Facs Dist Wildflower Ranch Comm Facs Dist New Mexico Mariposa East Pub Imp Dist Ventana West Pub Imp Dist Colorado Aspen Park Metro Dist REQUIRED RESPONSE ITEMS 4 Par Amount ($ mil) Pledge Original Ratings Current Ratings Credit Enhancement Role of RBC Denver Urban Renewal Authority (Stapleton Project) Senior Tax Increment Revenue Refunding Bonds, Series 2013A (Pending) $175.000 Property & Sales Taxes TBD N/A TBD Senior Manager Senior Subordinate Tax Increment Revenue Bonds, Series 2010B-1 $100.740 Property & Sales Taxes Aa3 / NR / NR Aa3 / NR / NR None Senior Manager Senior Tax Increment Revenue Bonds, Series 2008A-1 (Variable Rate) $79.000 Property & Sales Taxes NR / NR / BBB NR / NR / BBB+ Letter of Credit Senior Manager/ Remarketing Agent Senior Tax Increment Revenue Bonds, Series 2008A-2 (Variable Rate) $107.000 Property & Sales Taxes NR / NR / BBB NR / NR / BBB+ Letter of Credit Senior Manager/ Remarketing Agent Senior Subordinate Tax Increment Revenue Bonds, Series 2008B-1 (Institutional Placement) $105.000 Property & Sales Taxes NR / NR / NR NR / NR / NR None Placement Agent Senior Subordinate Tax Increment Bonds, Series 2004B-1 (Institutional Placement) $200.000 Property & Sales Taxes NR / NR / NR N/A (Refunded) None Placement Agent Senior Tax Increment Bonds, Series 2004A-1 (Institutional Placement) $75.000 Property & Sales Taxes NR / NR / NR N/A (Refunded) None Placement Agent Park Creek Metropolitan District (Stapleton Project) Senior Subordinate Limited Property Tax Supported Revenue Refunding Bonds, Series 2013 (Pending) $50.000 Property Taxes TBD N/A TBD Senior Manager Senior Limited Property Tax Supported Revenue Refunding Bonds, Series 2011 $47.385 Property Taxes NR / NR / BBB+ NR / NR / BBB+ Assured Guaranty Bond Insurance Senior Manager Senior Limited Tax Revenue Refunding & Improvement Bonds, Series 2009 $86.000 Property Taxes NR / NR / BBB NR / NR / BBB+ Assured Guaranty Bond Insurance Senior Manager Junior Subordinate Limited Property Tax Supported Revenue Bonds, Series 2005 (Institutional Placement) $58.000 Property Taxes VMIG-1 N/A (Refunded) None Senior Manager Senior Subordinate Limited Property Tax Supported Revenue Refunding & Improvement Bonds, Series 2005 (Institutional Placement) $65.000 Property Taxes NR / NR / NR N/A (Refunded) None Placement Agent Senior Limited Property Tax Supported Revenue Refunding Bonds, Series 2005 (Institutional Placement) $63.000 Property Taxes NR / NR / NR Baa2 / NR / BBB+ None Placement Agent Denver Urban Renewal Authority (Downtown Denver Project) Tax Increment Revenue Refunding Bonds, Series 2006ABCD (Variable Rate) $54.100 Sales, Property and Lodging Taxes A1 / NR / NR Baa2 / NR / NR Letter of Credit REQUIRED RESPONSE ITEMS 5 Par Amount ($ mil) Pledge Original Ratings Current Ratings Credit Enhancement Role of RBC Revenue Bonds, Series 2004 (Variable Rate) $57.000 Public Improvement Fees NR / AA / NR N/A (Refunded) Letter of Credit Senior Manager / Remarketing Agent Broomfield Urban Renewal Authority (Events Center Project) Tax Increment Revenue Bonds, Series 2005 (Variable Rate) $59.785 Property & Sales Taxes Aa1 / NR / NR A2 / NR / NR Letter of Credit Senior Manager/ Remarketing Agent Plaza Metropolitan District No. 1 (Belmar) Revenue Refunding Bonds (Tax Increment Supported), Series 2013 $98.600 Public Improvement Fees, Property and Sales Taxes NR / NR / NR NR / NR / NR None Sole Manager Subordinate Pubic Improvement Fee/Tax Increment Supported Revenue Bonds, Series 2005 (Institutional Placement) $12.500 Public Improvement Fees, Property and Sales Taxes NR / NR / NR N/A (Refunded) None Sole Manager Public Improvement Fee/Tax Increment Supported Revenue Bonds, Series 2003 (Institutional Placement) $83.000 Public Improvement Fees, Property and Sales Taxes NR / NR / NR N/A (Refunded) None Sole Manager Lowry Economic Development Authority Adjustable Rate Improvement Revenue Bonds, Series 2008 $65.000 Property Taxes NR / A+ / NR N/A (Refunded) Letter of Credit Senior Manager / Remarketing Agent Interlocken Metropolitan District (Broomfield) General Obligation Refunding Bonds, Series 2013 (pending) $90.000 Property Taxes TBD N/A None Sole Manager Loan Agreement, Series 2009 $18.500 Property Taxes NR / NR / NR NR / NR / NR None Placement Agent Taxable General Obligation Improvement & Refunding Bonds, Series 2004A, B & C $19.544 Property Taxes NR / AAA / NR (enhanced) NR / NR / NR XL Capital Bond Insurance Sole Manager Sheridan Redevelopment Authority (South Santa Fe Corridor Project) Tax Increment Refunding Revenue Bonds, Series 2011B (Private Placement) $57.000 Property & Sales Taxes, Public Improvement Fees NR / NR / NR NR / NR / NR Letter of Credit Co-Manager Tax Increment Refunding Revenue Bonds, Series 2011A (Variable Rate) $74.000 Property & Sales Taxes, Public Improvement Fees Aa1 / NR / NR Aa3 / NR / NR Letter of Credit Co-Manager Taxable Subordinate Lien Bonds, Series 2007B-1 (Institutional Placement) $17.000 Property & Sales Taxes, Public Improvement Fees NR / NR / NR N/A (Refunded) None Co-Manager Tax Increment Revenue Bonds, Series 2007A-2 (Variable Rate) $45.745 Property & Sales Taxes, Public Improvement Fees Aaa / NR / NR N/A (Refunded) Letter of Credit Co-Manager / Swap REQUIRED RESPONSE ITEMS 6 Denver Urban Renewal Authority – Stapleton Project $100,740,000 Stapleton Senior Subordinate Tax Increment Revenue Bonds, Series 2010B-1 In May 2010, RBCCM served as senior manager to Denver Urban Renewal Authority (DURA) on the $100 million Stapleton Senior Subordinate Tax Increment Revenue Bonds, Series 2010B-1. Proceeds of the bonds were used to current refund all of the remaining Series 2004B-1 bonds. The refunded bonds were originally issued to finance construction of trunk infrastructure improvements to support mixed-use redevelopment of a major portion of the site of the former Stapleton International Airport. Forest City Enterprises is the developer of the Stapleton Urban Redevelopment Area (URA). The Series 2010B-1 bonds are secured by a second lien pledge of incremental property and sales tax revenues and backed by a moral obligation of the City and County of Denver. As senior manager, RBCCM was heavily involved in engineering a financing and cash flow model that addressed several constraints including property and sales tax revenue as well as Denver Public Schools funds collected prior to debt service payments, maintaining adequate debt service coverage for outstanding senior bonds and senior subordinate lien bonds, and returning funds to the City and County of Denver for providing services in the URA. This financing also allowed DURA, Forest City and Denver Public Schools to pursue the Third Stapleton Denver Public School, a K-8 school, financing and construction plan. On the day of pricing, RBCCM’s salesforce had $73 million (retail - $13.7 million, institutional - $59.4 million) of the total $87 million orders. The syndicate underwrote an additional $36 million, of which as senior manager, RBCCM took down $26 million. RBCCM has been the only investment bank to serve DURA since its inception. We have served as senior and sole underwriter, swap counterparty and remarketing agent on bond issues dating back to 1992. The Plaza Metropolitan District No. 1 $98,900,000 Revenue Refunding Bonds, Series 2013 On January 22, 2013 RBC Capital Markets (RBCCM) served as sole manager for The Plaza Metropolitan District No.1’s (the “District”) $98.9 million Revenue Refunding Bonds, Series 2013. Proceeds of the bonds will be used to refund the District’s outstanding Series 2003 and Series 2005 bonds and also reimburse the developer and the Lakewood Reinvestment Authority (LRA). The Bonds were non-rated and sold in a limited public offering. The key to strong execution of non-rated bonds was a focused marketing plan for institutional investors. This plan included addressing individual investor questions as well as an institutional investor call. On the day of pricing the District’s bonds garnered significant interests with nearly all maturities oversubscribed. In fact, the term bond in 2040 was 9x’s oversubscribed with $238.3 million in orders for $25.765 in bonds. As a result RBCCM suggested lowering yields in certain maturities by 10 basis points. This strong market reception helped the District generate over $12 million in savings and secure an all-in borrowing rate (All-in TIC) of 4.37%. The Plaza Metropolitan District No. 1 is a quasi-municipal corporation and is located entirely within the City of Lakewood in the western Denver metropolitan area. The District, together with The Plaza Metropolitan District No. 2 and The Plaza Metropolitan District No. 3 were formed in 2001 for the purpose of assisting in the financing and development of public facilities in connection with the Belmar Project. Belmar is a mixed use development that encompasses approximately 103 acres, which included the redevelopment of the former Villa Italia Mall. REQUIRED RESPONSE ITEMS 7 Public Finance Team 3) Please identify the public finance personnel assigned to this transaction and provide brief descriptions of their relevant experience with Colorado Urban Renewal Authority Bonds. The RBCCM bankers assigned to serve the Authority have extensive experience with crafting unique financing approaches that take into consideration the needs, resources and the specific requirements of the project. Tax increment and special district issues are not one- size-fits-all and RBCCM’s bankers are knowledgeable and experienced in creating unique and appropriate credit structures. These professionals, along with the full resources of the firm, will be immediately and continuously available throughout the transaction. The core team consists of bankers with significant Colorado TIF and special district financing experience complimented by strong structuring, marketing and underwriting expertise to provide the highest possible level of service. Following is a list of the proposed individuals and a summary of their recent and relevant financing experience. RBCCM Financing Team Tom Wendelin, Vice President 1200 17th Street, Suite 2150 Denver, Colorado 80202 (303) 595-1211 telephone (303) 595-1221 facsimile tom.wendelin@rbccm.com Lead Banker Lauren Hartman, Analyst 1200 17th Street, Suite 2150 Denver, Colorado 80202 (303) 595-1216 telephone (303) 595-1221 facsimile lauren.hartman@rbccm.com Project Execution Christen Villalobos, Associate 1200 17th Street, Suite 2150 Denver, Colorado 80202 (303) 595-1202 telephone (303) 595-1221 facsimile christen.villalobos@rbccm.com Supporting Banker Marc Greer, Managing Director 2711 N. Haskell Avenue Suite 2500 Dallas, Texas 75204 (214) 989-1800 telephone (214) 989-1859 facsimile marc.greer@rbccm.com Underwriter Investment Banking Tom Wendelin, Vice President Lead Banker Tom has been involved with various governmental and commercial projects for over 20 years. His work includes all aspects of refunding and new money transactions, including cash flow preparation, escrow analysis, documentation and review, negotiations with rating agencies and credit providers, pricing and closing. Select transactions to which Tom served as senior investment banker include: $175,000,000 Denver Urban Renewal Authority, Stapleton Senior Tax Increment Bonds, Series 2013A (Pending) $50,000,000 Park Creek Metro District, Sr Subordinate Limited Property Tax Revenue Refunding Bonds, Series 2013 (Pending) $90,000,000 Interlocken Metropolitan District, General Obligation Refunding Bonds, Series 2013 (Pending) $98,600.000 The Plaza Metropolitan District No.1, Revenue Refunding Bonds, Series 2013 $100,740,000 Denver Urban Renewal Authority, Stapleton Senior Subordinate Tax Increment Revenue Bonds, Series 2010B-1 $65,000,000 Lowry Redevelopment Authority, Improvement Revenue Bonds, Series 2008 Other Colorado special district clients include: Meridian, Goldsmith, Inverness, Sheridan Redevelopment Authority, City & County of Broomfield and Centerra Metropolitan District. Prior to his investment banking career, he was employed in the accounting field and has over 10 years of financial and tax accounting experience. Tom received a B.S. degree in Accounting from the University of Nebraska - Lincoln, and an MBA degree in Finance from the University of Denver. He holds Series 7, 52 and 63 licenses. Christen Villalobos, Associate Supporting Banker Christen joined RBCCM in 2008 and has provided quantitative and document execution support to issuers including the State of Colorado, Colorado Department of Transportation, University of Colorado, and Oklahoma Capitol Improvement Authority. She has a Master’s degree REQUIRED RESPONSE ITEMS 8 4) Please indentify the underwriting or trading desk personnel who will be personally responsible for pricing this issue and provide brief descriptions of their relevant experience with Colorado Urban Renewal Authority bonds. Underwriting Marc Greer, Managing Director Fixed Rate Underwriter Marc has been engaged in investment banking for 28 years, working primarily in municipal trading and underwriting. Because of his daily involvement in municipal bond underwriting, he is a primary resource for assistance in determining current rate levels, market trends and market reaction and acceptance of alternative financing structures and legal opinion variations. In addition to his underwriting duties, he is responsible for regional municipal bond trading at RBCCM including Colorado paper. Most recently, Marc served as the lead underwriter for the pricing of Plaza Metropolitan District’s Revenue Refunding Bonds, Series 2013 Marc has been active in the municipal bond industry, having served on the Board of Trustees of the Municipal Advisory Council for Texas and as President of the Houston Bond Club. He holds a Bachelor of Business Administration from The University of Texas at Austin and has Series 7, 63 and 52 securities licenses. REQUIRED RESPONSE ITEMS 9 Distribution Capabilities 5) Please describe your municipal bonds sales force, including the number and location of salespeople. RBCCM has distinctive and strong abilities to distribute TIF and special district bonds. We have one of the largest institutional sales forces covering first, second, and third tier clients. More importantly, the firm has cultivated a network of sophisticated, retail customers for tax increment bonds. This extensive marketing expertise results in lower interest rates for our clients. Tier I Institutional Investors – RBCCM’s sales and trading functions are strategically located throughout the United States (New York, Chicago, Dallas and Minneapolis) providing our 20 member institutional sales force with direct access to the Tier I major institutional buyers of taxable and tax-exempt securities. Tier I investors, which are the major mutual funds and money market funds, typically prefer to write “large ticket” orders of $25 million or more. As an active participant in the fixed income markets, RBCCM underwrites 15 – 20 issues per week on average. This provides our sales, trading and underwriting professionals with a complete understanding of current market dynamics and investor appetite. Tier II & III Middle Market Investors – One of the key success drivers for superior marketing is obtaining adequate distribution among investors so that a handful of institutional buyers do not dictate pricing levels. With roots as a regionally based broker-dealer, RBCCM maintains accounts with the base of small to mid-sized Tier II investors, which are mid-tier institutions that buy $5 million to $25 million, and Tier III institutions, which are smaller institutions whose typical order is $1 million to $5 million. These investors are likely to accept lower yields. These types of institutions often fall below the “radar screens” of larger securities dealers. Our institutional sales and trading professionals cover a national account base which includes bond funds, pension funds, arbitrage accounts, hedge funds, insurance companies, corporations, investment advisors and high net worth individuals. Retail Distribution – RBCCM will leverage our extensive retail distribution network to support the distribution of the project related bonds. The firm’s retail business is carried out by 1,942 financial consultants in 42 states – 78 of whom are located in Colorado, including nine financial consultants in our Fort Collins office – and represents one of the largest retail operations in the nation. As of October 31, 2012, these professionals managed 29,485 accounts for 11,939 Colorado households totaling $6.6 billion in assets. Of these assets, $1 billion, or 15.6% of total assets, are municipal holdings. A distinct advantage of our local retail operations is the ability to engage a local marketing campaign for the Authority’s Series 2013 bonds. Retail investors are often less price sensitive. RBCCM can structure the transaction with bifurcated maturities with more par-ish coupon structures that are generally more ‘retail friendly.’ Our marketing team will design Issue Announcements (adjacent) for our financial consultants to email to local accounts that might be interested in purchasing the Authority’s bonds. Additionally, RBCCM often places Tombstone Advertisements in local newspapers to generate community interest. We recommend placing an ad in The Coloradoan the week prior to pricing. RBC’s Colorado Locations Financial Consultant Headcount as of October 31, 2012 Office # of FCs Boulder 13 Colorado Springs 3 Denver 27 Denver Tech 22 Fort Collins 9 Pueblo 4 Total 78 REQUIRED RESPONSE ITEMS 10 Ratings Strategy 6) The Authority does not currently have any rated obligations, nor does the City have any ratings associated with its Moral Obligation pledge. The City’s Series 2012 Certificates of Participation are rated “Aa1” by Moody’s, and the City has been assigned an Issuer Rating of “Aaa” by Moody’s. Please discuss your approach to applying for ratings for the 2013 Bonds, including the services your firm will provide in presenting the issue to the rating agency or agencies. Please include your comments regarding the potential use of municipal bond insurance for this issue. As a leading underwriter of TIF bonds and various other forms of tax-exempt and taxable land-based financings, RBCCM is particularly well suited to serve as underwriter. Our experience with these issuers includes, in most cases, our assistance with obtaining a credit rating. RBCCM plays an active role in the rating process helping issuers anticipate questions, prepare rating presentation material and presenting information in the best possible light. Tax Increment Bonds Approach The Authority will directly benefit from RBCCM’s prior experiences with obtaining ratings for Colorado urban renewal authorities. For example, RBCCM’s bankers understand that Moody’s and Fitch often take more holistic approaches, considering both moral obligation pledges as well as project revenues. Standard & Poor’s often only considers the project revenues, giving little or no credit to a moral obligation pledge. As a result of the City of Fort Collins’ moral obligation pledge, we recommend the Authority seek a rating from either Moody’s or Fitch for its North College Avenue URA project. As the Authority’s underwriter, RBCCM will assist the Authority and your financial advisor in determining which of the two agencies will provide the best rating for the Authority in order to achieve the lowest cost of capital. Generally, our approach is comprised of four strategic components which are outlined in the table adjacent. Initial dialogue In order to properly develop a strategy for the credit rating process, we actively engage in preliminary dialogue with the rating agency. In these introductory discussions, we take inventory of the agency’s perceived list of credit strengths and weaknesses so that we can tailor documents, interviews, and presentations to focus on the positive credit aspects. These initial discussions are important as they set the stage for communication throughout the process and provide the agency with the Authority’s expectations. Given that this is a new credit, RBCCM believes this part of the rating process will be extremely important. Rating strategy / presentation With the strengths and weaknesses of the credit profile identified and prioritized, we will provide the Authority with an outline of a comprehensive rating agency presentation. We will discuss the most likely questions to be posed by the rating analysts in order to address potential concerns as well as present the strengths of the Authority’s credit. Using a workshop process, we will discuss these questions and potential concerns and hold a “dress rehearsal” of a rating presentation to ensure the credit is portrayed in the most favorable light. Once the formal presentation is completed, we assist the issuer staff in responding to any unresolved rating agency questions. RBCCM has prepared a chart outlining both the most important strengths and weaknesses in terms of credit. This chart, in our opinion, reflects the some of the items rating agencies will consider. Strengths Challenges Moral Obligation Pledge of a Aaa rated City Stable economy supported by regional trade and higher education Low debt burden Concentrated property tax revenues Potential limited commercial assessed value growth Limited upside potential for further property tax revenues as the development is 65% built out Moral Obligation Pledge Considerations - As senior underwriter to the Denver Urban Renewal Authority’s Series 2010B-1 Stapleton Senior Subordinate Tax Increment Revenue Bonds, RBCCM led discussions about credit ratings and helped DURA obtain a Aa3 rating from Moody’s. (DURA originally received an A1 rating from Moody’s but was recalibrated to Aa3 prior to issuance of the Bonds.) Similar to the Fort Collins Urban Renewal Authority’s proposed security, which includes a moral obligation from the City of Fort Collins (rated Aaa), the City and County of Denver also provided a moral obligation pledge. At the time of the issuance, the City and County of Denver was rated Aaa from Moody’s. According to the published Moody’s report, the rating incorporated the City and County of Denver’s high general obligation rating. This report is included in Appendix 2. Credit Rating Agency Approach Initial Dialogue with Rating Analysts Development of Rating Strategy / Presentation Meeting with Agencies / Site Visits / Q&A Sessions Consistent Ongoing Dialogue with Rating Agencies REQUIRED RESPONSE ITEMS 11 Like DURA, the Authority should also expect the City’s Aaa rating to be considered into the rating of the Series 2013 bonds. Project Revenue Considerations – Potential limited commercial assessed value growth and the concentration of tax revenues could adversely affect the Authority’s rating. According to data provided by the Authority, the top ten taxpayers account for 89% of the total estimated 2013 taxes payable. This concentration may cause concern for the rating agencies because: 1) King Soopers Market Place is the largest taxpayer in the development, with almost 30% of the 2013 total tax revenues. Should Dillon Companies vacate the space, the Authority’s tax revenues would be negatively impacted. 2) Should a taxpayer file for bankruptcy, they could obtain a stay from any tax lien sales for the next three years and not allow the Authority to recoup any revenues during that period. Additional Bonds Test – To strengthen the Authority’s credit, RBCCM recommends the Authority include an additional bonds test (ABT) in its Series 2013 Bond Indenture. Including an ABT covenant will protect the Series 2013 bonds should the Authority decide to issue additional bonds for the North College Avenue Project. The required coverage ratio for additional bonds tests are typically calculated historically, but could be written to be calculated prospectively, which could be advantageous to the Authority if the project is expected to expand its tax base. Ongoing dialogue Ongoing dialogue with the rating agencies after ratings are received is prudent. Although a credit rating is a long-term assessment, continuously providing credit analysts with current information and developments assists the analysts in understanding the credit features of our clients and their constituents. From those continuous discussions, we can assess the views of rating agencies regarding rating criteria, debt covenants and innovative financing techniques as they pertain to our clients. Bond Insurance Currently there are only two viable bond insurers for the Authority to consider. Assured Guaranty Municipal Corp. (“Assured” or “AGM”), is an active bond insurer in the municipal market and currently rated AA- (Stable) by S&P and A2 (Stable) by Moody’s. The other viable bond insurer, Build America Mutual (BAM), is a new company and municipal bond insurer, which currently carries an underlying rating of AA (Stable). BAM is licensed in Colorado but has yet to insure a Colorado municipal transaction. Recently, RBCCM has seen little added benefit to selling ‘A’ rated bonds with bond insurance. Assuming an Aa3 or higher underlying rating and based on the strength of the Authority’s credit our underwriting desk does not believe bond insurance provides any economic benefit in the current market. Should the Authority receive a rating lower than Aa3, we recommend receiving a bid and using a dual-track approach as there is no cost associated with receiving a premium quote. As underwriter, RBCCM will provide the Authority with a breakeven analysis between the insurance premium and any incremental interest savings to help the Authority determine the cost/benefit of bond insurance. REQUIRED RESPONSE ITEMS 12 Preliminary Plan of Finance 7) Please present a preliminary structure and debt capacity projection, including projected interest rates, for an issue which can be supported by the property tax increment revenues within the North College project area. Assume a cash reserve fund is sized into the issue. Please explain the credit assumptions which support the projected interest rates, including the assumed ratings for the 2013 Bonds. Identify the benchmarks for pricing the transactions, specifically listed in this proposal. Provide the basis for your estimates. Municipal Market Update - Tax-exempt yields reached new all-time lows in late 2012 as uncertainty in Europe and U.S. economies drove investors to less risky assts including Treasuries and tax-exempt bonds. For the beginning of 2013 with more bullish outlooks on the economy, yields have increased slightly but still remain low. “AAA” MMD Yield Curve 0 1 2 3 4 5 6 1 4 710131619222528 % Yield Current - 02/08/2013 6 Months Ago -08/08/2012 1 Year Ago - 02/08/2012 2 Years Ago - 02/08/2011 ‘AAA’ MMD Trends Since 2005 Source: MMD Comparable Transaction - On January 10, 2013, the Commerce City Northern Infrastructure General Improvement District priced $76.28 million of General Obligation Refunding and Improvement Bonds, Series 2013. The bonds had an underlying rating of A (Fitch) and were sold with AGM bond insurance (S&P: AA-). RBCCM believes this is an interesting comparable to show the Authority because of the incremental property tax revenue base of both projects. Whereas the Commerce City project has a more diverse tax base with residential zoning, the Authority will benefit from the moral obligation pledge of the City of Fort Collins. Commerce City Infrastructure General Improvement District $76,280,000 General Obligation Refunding & Improvement Bonds, Series 2013 Underlying Rating : A (Fitch), Bond Insurance (AGM): AA- (S&P) Priced 01/10/13 | 10 Year Par Call Maturity (12/1) 01/09/13 Late MMD Coupon Yield Spread (Bps) 2013 0.20 3.00 0.57 37 2014 0.30 3.00 0.76 46 2015 0.42 2.00 / 3.00 1.00 58 2016 0.57 4.00 1.26 69 2017 0.72 5.00 1.54 82 2018 0.87 2.75 / 3.00 / 5.00 1.81 94 2019 1.00 5.00 2.04 104 2020 1.22 5.00 2.26 104 2021 1.42 5.00 2.45 103 2022 1.61 5.00 2.61 100 2023 1.76 5.00 2.75 99 2024 1.86 5.00 2.85 99 2025 1.93 5.00 2.97 104 2026 1.99 5.00 3.03 104 2027 2.06 5.00 3.09 103 2028 2.13 5.00 3.15 102 0 1 2 3 4 5 REQUIRED RESPONSE ITEMS 13 Commerce City Infrastructure General Improvement District $76,280,000 General Obligation Refunding & Improvement Bonds, Series 2013 Underlying Rating : A (Fitch), Bond Insurance (AGM): AA- (S&P) Priced 01/10/13 | 10 Year Par Call Maturity (12/1) 01/09/13 Late MMD Coupon Yield Spread (Bps) 2029 2.20 5.00 3.20 100 2030 2.26 5.00 3.25 99 2031 2.32 5.00 3.30 98 2032 2.38 4.75 / 5.00 3.52 / 3.35 114 / 97 2034 2.50 3.50 3.75 125 2035 2.56 3.60 3.82 126 2036 2.63 3.625 3.87 124 2038 2.73 4.00 4.00 127 Sources: Tm3 & MMD Preliminary Series 2013 Scales - The following scales are based on RBCCM’s understanding of the Authority’s credit, tax revenue base and desired financing structure. They assume market conditions and the ‘AAA’ MMD yield curve, the benchmark to which tax-exempt transactions are priced to, as of February 11, 2013. Aa3 Rating 10 Year Par Call A1 Rating 10 Year Par Call Maturity (12/1) 02/11/12 Late MMD Coupon Yield Spread (Bps) Coupon Yield Spread (Bps) 2013 0.20 2.00 0.40 20 2.00 0.55 35 2014 0.27 2.00 0.55 28 2.00 0.70 43 2015 0.40 2.00 0.75 35 2.00 0.90 50 2016 0.56 2.00 1.00 44 2.00 1.15 59 2017 0.70 2.00 1.30 60 2.00 1.45 75 2018 0.90 2.00 1.60 70 2.00 1.75 85 2019 1.13 2.00 1.90 77 2.00 2.05 92 2020 1.36 2.00 2.20 84 2.00 2.35 99 2021 1.55 3.00 2.45 90 3.00 2.60 105 2022 1.73 3.00 2.63 90 3.00 2.78 105 2023 1.86 3.00 2.76 90 3.00 2.91 105 2024 1.94 3.00 2.84 90 3.00 2.99 105 2025 2.02 3.00 2.92 90 3.00 3.07 105 2026 2.08 3.00 2.98 90 3.00 3.13 105 2027 2.15 3.00 3.05 90 3.00 3.20 105 2028 2.22 3.00 3.12 90 3.00 3.27 105 2029 2.28 3.00 3.18 90 3.00 3.33 105 Preliminary Debt Capacity Analysis – Based on the proposed interest rate scales above, RBCCM ran a preliminary financing analysis for the Authority’s Series 2013 bonds. We assumed semi-annual interest payments on June 1 and December 1, beginning December 1, 2013 and principal payment dates of December 1, 2013 through 2029. Given the uncertainty for significant increases in commercial assessed value, we assumed level annual tax revenues of $1.3 million with coverage ratios of 1.25x’s the first three years and 1.20x’s in years 4-17. The coverage ratio structure allows for additional build-out of the project, and thus additional revenues, after three years, which would most likely push the actual coverage factor to 1.25x’s. Finally, we assumed an investment rate the debt service reserve fund of 1%. The following table summarizes our results and also compares the debt capacity (proceeds available for loan takeout) between a Aa3 rated transaction and an A1 rated transaction; that difference is approximately $161,000. Given these results, the Authority should be able to generate its desired proceeds for the repayment of its loans to the City for the North College Avenue project. REQUIRED RESPONSE ITEMS 14 Aa3 Scenario A1 Scenario Sources Par Amount $14,545,000 $14,545,000 Premium (Discount) 155,838 (5,468) Total Sources $14,700,838 $14,539,432 Uses Proceeds Available for Loan Takeout $13,452,685 $13,291,379 Debt Service Reserve Fund 1,082,700 1,082,700 Cost of Issuance (inclusive of underwriter’s discount) 165,453 165,453 Total Uses $14,700,838 $14,539,432 Statistics Average Coupon 2.81% 2.81% True Interest Cost 2.71% 2.86% All-in Interest Cost 2.80% 2.95% Average Life 9.06 yrs 9.06 yrs Average Annual Debt Service $1,105,795 $1,105,795 REQUIRED RESPONSE ITEMS 15 Proposed Fees 8) Please provide your proposed fee structure for the 2013 Bonds, including any reimbursable costs you would submit to the Authority for payment. In addition, please indicate whether you anticipate retaining underwriter’s counsel, and if so, what related costs the Authority would be expected to absorb. An important consideration in the evaluation of any financing proposal is the fee charged by the investment banking firm. Our forethought in developing an underwriting fee structure was to be competitive in our proposal while ensuring aggressive pricing, broad distribution and strong execution of the Tax Increment Revenue Bonds. Furthermore, RBCCM’s demonstrated ability to underwrite unsold balances taking on risk to maintain pricing levels for our clients, outweighs any difference in proposed fees from our competitors. RBCCM proposes a gross spread of $4.50 per $1,000 for a $14.5 million tax-exempt fixed-rate transaction with a final maturity in 2029. A breakdown of our fee is provided below and proposed takedowns by maturity are $1.25 for 2013, $2.50 for 2014 and 2015, $3.75 for 2016- 2018 and $5.00 for 2019-2029. Should the Authority pursue a taxable or alternative structure our fees are subject to change. As underwriter, RBC Capital Markets will not require underwriter’s counsel so long as bond counsel can provide a 10b-5 opinion by a separate attorney. Gross Spread Per $1,000 Breakdown of Underwriter’s Expenses Per $1,000 Management Fee $0.000 CUSIP $0.034 Average Takedown $4.336 DTC $0.034 Underwriter’s Expenses $0.164 IPREO $0.068 Total Gross Spread $4.500 Day Loan $0.028 Miscellaneous $0.000 Total Underwriter’s Expenses $0.164 REQUIRED RESPONSE ITEMS 16 Scope of Services 9) Please submit any additional information which you believe would be useful to the Authority in evaluating your qualifications to serve as underwriter. State in two (2) pages or less, why your firm is well qualified to provide the services outlined in the Scope of Services section above and your firm’s experience in provide such services. In citing prior engagements, indicate the role and responsibilities your firm undertook (financial advisor, senior managing underwriter, etc). The investment banking and underwriting professionals listed above will be immediately and continuously to serve the Authority throughout its Series 2013 financing process. As your underwriter, RBCCM will provide the following services to the Fort Collins Urban Renewal Authority: Development of financing strategy, including how to best structure the Series 2013 bonds as discussed in our response to Question 7 Maintain the financing schedule as described in the RFP, including attending City Council meetings, as necessary Develop credit strategies, as further discussed in Question 6. RBCCM will lead the development of a rating presentation and participate in presentations to rating agencies. Additionally, RBCCM will also analyze the cost/benefit of bond insurance and make suggestions regarding the additional bonds test language in the Indenture. Evaluate and review legal documentation, including the preliminary and final official statements, bond resolution and indenture and bond purchase agreement Market updates. As the most active underwriter in the nation, our underwriters are in the market every day and possess the tools necessary to monitor market conditions, interest rates, credit spreads and investor demand. We will use our resources including RBC research, Bloomberg and Municipal Market Data to provide the Authority and your financial advisor with the latest economic and market information as we structure and prepare to bring the transaction to market. Market bonds, including coordinate marketing efforts, conference calls with brokers and potential buyers (as described in our response to Question 5), determine optimal coupon / yield structure, evaluate current market conditions and market comparables and execute bond pricing. Underwrite Bonds. Additionally, RBCCM offers the Authority a strong capital position and ability to takedown unsold balances to preserve pricing levels. RBCCM has the capital available to underwrite a single issue of up to $18.4 billion As detailed in the table to the right, RBCCM has the capital strength to price issues aggressively for our clients and we are willing to place our capital at risk through our underwriting commitments. The firm’s strong capital position enables us to price issues aggressively, regardless of market conditions. This is especially important in volatile markets. In addition, the activities of RBCCM are supported by RBC with over $36 billion in Tier I Capital. Commitment to Underwrite and Use Capital RBCCM’s strong distribution capabilities are enhanced by our ability to commit capital resources in underwriting municipal securities. RBCCM believes strongly in the municipal markets and in our role as a leading underwriter of municipal securities. The following are recent of examples of using our capital to support to clients’ transactions: Selected Commitments to Underwrite Unsold Balances on Senior Managed Underwriting Engagements Sale Date Issuer Par Amount ($ millions) Balance Underwritten ($ millions) Percentage of Bond Issue 12/12/12 Colorado Regional Transportation District $474.9 $41 9% 12/11/12 New Mexico Department of Transportation 220.4 32 15% 07/19/12 Douglas County School District (CO) 15.5 5.1 33% 03/27/12 Routt County (CO) 13.2 6.6 50% 10/18/11 Meridian Metropolitan District (CO) 70.0 25.8 37% RBC Capital Markets, LLC US $000 as of 12/31 2009 2010 2011 Total Regulatory Capital 4,340,687 4,602,753 5,039,423 Total Equity Capital 2,954,687 3,216,753 3,653,423 REQUIRED RESPONSE ITEMS 17 Sale Date Issuer Par Amount ($ millions) Balance Underwritten ($ millions) Percentage of Bond Issue 08/24/11 Colorado Department of Transportation 104.7 43.7 42% 03/24/10 University of Oklahoma 73.12 24.0 33% 03/24/10 University of Texas Board of Regents 385.4 $140 36% 12/09/09 State of Colorado 23.1 6.0 26% 11/04/09 Minnesota HFA 123.8 15.0 12% 10/06/09 City of Phoenix, AZ (Tax-Exempt series) 117.0 25.3 22% 08/19/09 Industrial Development Authority of the County of Pima, AZ 176.0 57.3 33% 06/09/09 New York State Thruway Authority 431.0 81.8 19% 05/28/09 Dormitory Authority of the State of New York 356.0 60.4 17% 05/12/09 ASU Energy Management LLC 41.2 17.0 40% 01/20/09 Adams County, Colorado 105.0 12.9 12% Post-pricing analysis. RBCCM will prepare a Final Pricing Book that summarizes market and economic conditions leading up to and on the day of pricing, final orders and allotments and a comparison of the Authority’s sale to other similar transactions. Interim Support and Analysis. We will continue to assist the Authority and its financial advisor with cash flow analyses, financial planning and refunding opportunities. References RBCCM invites the Authority to contact the references listed below who will attest to our ability to deliver the scope of services described above and provide financing solutions for our Colorado Urban Renewal Clients. RBCCM served as senior or sole underwriter to the following clients: Denver Urban Renewal Authority Plaza Metropolitan District Centerra Metropolitan District Tracy Huggins Executive Director Telephone: (303) 606-4825 Email: thuggins@renewdenver.org Mark Tompkins Corporate Controller Telephone: (720) 946-4662 Email: markt@continuumllc.com Josh Kane Principal and CFO Telephone: (970) 776-4032 Email: joshk@mcwhinney.com REQUIRED RESPONSE ITEMS 18 Legal and Regulatory Issues 10) Please disclose any legal or regulatory proceedings initiated against the firm since January 1, 2008, related directly or indirectly to its activities in the municipal bond market. Disclose any relationship which could create or appear to create a potential conflict of interest if your firm is selected. RBC Capital Markets, LLC is a wholly owned indirect subsidiary of Royal Bank of Canada. Our response to this question is limited to matters involving the Municipal Markets business of RBC Capital Markets, LLC, the broker-dealer through which we conduct our municipal underwriting and financial advisory activities. RBC Capital Markets, LLC ("RBCCM") is an indirect, wholly-owned subsidiary of Royal Bank of Canada, a large global institution subject to many different legal and regulatory requirements in the United States, Canada and other jurisdictions. From time to time, RBCCM is a defendant or respondent in various litigations and arbitrations that arise in the ordinary course of business. RBCCM complies fully with its regulators in all litigations and arbitrations and in all settlements RBCCM reaches. The Financial Industry Regulatory Authority ("FINRA"), in furtherance of its responsibilities as the securities industry's self-regulatory organization pursuant to Section 15A(i) of the Securities Exchange Act of 1934, maintains a public database on registered broker-dealers and their associated persons known as BrokerCheck (http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/). The information made available through BrokerCheck is derived from the Central Registration Depository (CRD®), the securities industry online registration and licensing database. Information in CRD is obtained through forms that broker-dealers, their associated persons and regulators complete as part of the securities industry registration and licensing process, and to comply with comprehensive disclosure obligations imposed by FINRA and other regulators. RBCCM generally does not disclose litigations, arbitrations, or settlements except as required through CRD, and RBCCM makes no representations as to the existence or non-existence of any such litigations, arbitrations, or settlements beyond what is available through CRD. To the extent material to the financial results of Royal Bank of Canada, any litigation, arbitration, or settlement involving RBCCM also is disclosed in Royal Bank of Canada's financial statements, which may be obtained by visiting www.rbc.com/investorrelations/. The Municipal Finance division of RBC Capital Markets, LLC has developed extensive policies, procedures and training to identify, manage, and disclose actual and/or potential conflicts of interest. These include written policies, annual online compliance training, and transaction review processes that may require written disclosure as appropriate. To the best of our knowledge, there exists no actual or potential conflict of interest with the party identified in the Request for Proposal, nor any relationship, formal or informal, that the firm or any of the personnel listed in the response has with any party that might interfere with the firm’s ability to provide objective advice and recommendations to the party identified in the Request for Proposal in performing the services set forth in the RFP. Appendix 1: Signature Form IV. SIGNATURE FORM "We propose to furnish a consultant in accordance with the terms, conditions, and specifications detailed in the City's Request for Proposal and in our accompanying written response without exception, deletion, or qualification." Signature ______________________________________________________________ Printed Name & Title Tom Wendelin, Vice President Company Name RBC Capital Markets, LLC Business Address 1200 17th Street, Suite 2150 Denver, Colorado 80202 Phone 303-595-1211 Email tom.wendelin@rbccm.com RFP No 7471 Date of Proposal February 15, 2013 THIS FORM MUST BE RETURNED WITH YOUR PROPOSAL Appendix 2: Denver Urban Renewal Authority’s Series 2010B-1 Moody’s Rating Report New Issue: MOODY'S ASSIGNS A1 RATING TO DURA STAPLETON PROJECT SENIOR SUBORDINATE TAX INCREMENT REVENUE BONDS, SERIES 2010B-1 Global Credit Research - 22 Apr 2010 RATING AFFECTS APPROXIMATELY $100 MILLION IN SECOND LIEN TAX INCREMENT BONDS WHICH ARE BACKED BY A MORAL OBLIGATION OF DENVER, CO Denver (City & County of) CO Municipality CO Moody's Rating ISSUE RATING Stapleton Senior Subordinate Tax Increment Revenue Bonds, Series 2010B-1 A1 Sale Amount $100,000,000 Expected Sale Date 05/05/10 Rating Description Tax Increment Backed By Moral Obligation Opinion NEW YORK, Apr 22, 2010 -- Moody's Investors Service has assigned an A1 rating with a stable outlook to the Denver Urban Renewal Authority Stapleton Senior Subordinate Tax Increment Revenue Bonds, Series 2010B 1 which are backed by a moral obligation of the City and County of Denver, Colorado. The bonds refund the authority's outstanding Senior Subordinate Tax Increment Revenue Bonds, Series 2004B-1 and fund a debt service reserve fund. The bonds are secured by a second lien pledge (net of city and authority fees and payments to Denver Public Schools) of incremental property and sales tax revenues collected within the Stapleton Urban Redevelopment Area. In order to provide some additional bondholder security for the current offering, the authority and the City & County of Denver have entered into the "services agreement" which provides for the replenishment of the debt service reserve fund by Denver (subject to appropriation by the city council) after a draw on the reserve fund. The A1 rating on the Series 2010B 1 reflect Denver's moral obligation to replenish the debt service reserve fund, if necessary, and the somewhat modest likelihood that pledged incremental revenues will not support annual debt service on the current offering. The rating also incorporates the City's strong general credit characteristics reflected in its Aa1 general obligation rating including Denver's regional economic importance, well-managed financial operations despite historical declines in major revenue streams, and increasing, but manageable future debt levels. REDEVELOPMENT PROJECT INCORPORATES THE AREA OF THE FORMER STAPLETON AIRPORT The Stapleton Urban Redevelopment Area is located on the former site of Stapleton International Airport and comprises approximately 4,051 acres of land (consisting of approximately 2,935 acres of developable land and approximately 1,116 acres of open space). Forest City Enterprises is the master developer of the project. The site is ten minutes east of downtown Denver and 20 minutes from Denver International Airport, representing the last significant developable parcel of land within the boundaries of the City and County of Denver and is one of largest infill project in the United States. The redevelopment area is adjacent to several of Denver's historic neighborhoods and is designed as an urban mixed use project projected to consist of approximately 12,000 homes, 10 million square feet of commercial space, 3 million square feet of retail facilities and more than 1,100 acres of parks and open space. At completion, Stapleton is expected to include 30,000 residents and a workforce population of over 35,000. The development currently contains over 4,300 homes and approximately 3.4 million square feet of commercial space. The current estimated population of the development is 10,000. BONDS SECURED BY SECOND LIEN ON INCREMENTAL PROPERTY AND SALES TAX REVENUES The Senior Subordinate Lien Series 2010B-1 bonds are secured by a second lien pledge of incremental property and sales tax revenues (net of the county collection fee, DURA priority fee, and through 2018, payments to Denver Public schools). There are no limits on the amount of increment which may be collected within the project area Public schools). There are no limits on the amount of increment which may be collected within the project area except that increment is only collected as long as the bonds are outstanding. The authority has also issued the Stapleton Senior Tax Increment Revenue Bonds, Series 2008A-1 and Series 2008A-2 outstanding in the aggregate amount of $182.8 million which are senior to the current offering. The debt service reserve fund (DSRF) is funded with cash in the amount of approximately $6.0 million. The senior lien bonds also have a cash funded DSRF (Series 2008A-1, $7.9million; Series 2008A-2, $10.7 million). The additional bonds test calls for pledged revenues to provide annual coverage of debt service (defined as average annual debt service) equal to (in each of the previous 2 fiscal years) 1.25 times for the senior bonds (1st lien); 1.10 times for the senior subordinate bonds (2nd lien); and 1.00 times for the junior bonds (3rd lien). A look forward test using assumed new revenues may be used with coverage tests of 1.35 times for the senior bonds (1st lien); 1.20 times for the senior subordinate bonds (2nd lien); and 1.10 times for the junior bonds (3rd lien). DURA does not need to finance any additional infrastructure to support the development contemplated in current projections, so no additional bonds are currently anticipated. A new Interstate 70 interchange which will serve Stapleton is expected to be funded by the city, the State of Colorado, the federal government, and the developer. Pledged revenue grew at an average annual rate of 26.7% from 2004 to 2009 due to the rapid growth in the project area. Combined senior and second lien annual debt service coverage by pledged tax increment revenues over the last five years averaged 1.89 times, although annual coverage in fiscal 2009 declined to 1.16 times as a result of increasing debt service requirements. Combined maximum annual senior and second lien annual debt service (which occurs in 2019) coverage using fiscal 2009 revenues is 0.95 times, while projected fiscal 2010 MADS coverage is 0.99 times. Combined annual senior and second lien annual debt service coverage is projected to average 1.48 times base on somewhat conservative revenue assumptions of 6.9% average annual growth in pledged revenues through 2015. The projections do not include new development which may be attributable to the construction of the I-70 off-ramp. ADDITIONAL BONDHOLDER SECURITY PROVIDED BY MORAL OBLIGATION OF THE CITY & COUNTY OF DENVER In order to provide some additional bondholder security for the current offering, the authority and the City & County of Denver have entered into the "services agreement" which Moody's views as a moral obligation of the city and provides for the replenishment of the debt service reserve fund by Denver subject to appropriation by the city council after a draw on the reserve fund. The city services agreement was approved by the city council on 4/5/2010 on a 11-1 vote. Under the agreement, the trustee shall provide notice (a "draw notice") to the city's manager of finance within five business days following any transfer of funds from the Series 2010B-1 reserve fund account. Additionally, DURA has the option of providing advance notice of an anticipated draw on the reserve fund. Upon receipt of a draw notice Denver's manager of finance shall request that the city council consider appropriating funds to restore the DSRF balance to the Series 2010B-1 reserve requirement. In order to fulfill the intent of the services agreement, the manager of finance shall request an appropriation in a timely manner after receipt of a draw notice so that, if appropriated, a payment from the city to replenish the DSRF may be made to the trustee within 90 days from receipt of the draw notice. The city's manager of finance shall not be obligated to request an appropriation in the same fiscal year which exceeds the maximum annual debt service payments due on the Series 2010B-1. The maximum aggregate payments from the city to replenish the DSRF shall not exceed the total principal and interest due on the Series 2010B-1 bonds. Under the services agreement, the repayment of advances made by the city to the Series 2010B-1 DSRF are a repayment obligation of DURA with a "junior lien" (third lien) pledge of net pledged revenues. These payments will bear interest equal to the 5 year US Treasury Rate. The obligation of the manager of finance to seek appropriation for replenishment of the DSRF shall terminate automatically following the earlier of: (a) the date on which no Series 2010B-1 Bonds are outstanding within the meaning of the Indenture, or (b) September 15, 2025. RECESSION MODERATING IN THIS REGIONALLY IMPORTANT ECONOMY Denver's economy is in the midst of a recession as evidenced by growing unemployment and reduced consumer spending. As of January 2010, Denver's unemployment rate was amongst the highest for major municipalities along the Front Range at 9.1%, exceeding state levels (8.3%), but below the U.S. rate (10.6%). Job losses were the greatest in construction, though nearly all sectors saw losses including professional business and financial services. It is noted that Denver entered the recession later than many other regional economies in the western U.S. which saw deteriorating economic conditions as much as a year prior. It is expected that Denver will rebound during 2010 and 2011 given that the metropolitan area's gross metro product is expected to grow and the housing market is beginning to recover. At $78.56 billion, Denver's tax base is sizeable and roughly approximates the median for Aa1-rated urban cities nationwide. Despite current weakness, Denver's economy will continue to benefit from its role as a regional center for the six county metropolitan area with an estimated population of 2.5 million or over half of the state's population. The region should also benefit from a number of large public works million or over half of the state's population. The region should also benefit from a number of large public works projects, including the expansion of the light rail system, known as FasTracks. The economy is diverse and, over the long run, the metro area should outperform the national average with its skilled workforce with its technology and energy industries providing growth opportunities. Socioeconomic indicators for Denver are at or above the median for peer rated urban cities. As of the 2005-07 Census, per capita and median family incomes measured 108.9% and 89.9% of the U.S., respectively. STRONG, INSTITUTIONALIZED MANAGEMENT PRACTICES ENABLED CITY TO WEATHER ECONOMIC CYCLES; OFFICIALS QUICKLY RESPONDED TO FISCAL 2009 BUDGET GAP WITH CUTS AND MODEST USE OF RESERVES Moody's expects that Denver's sound fiscal management will continue to result in relatively stable financial performance. Fiscal year end statements as of December 31, 2008, show a total general fund balance of $171.4 million (15.3%) with an unreserved balance of $149.6 million (13.3%). Estimated results for FY09 equaled a total general fund balance of $118.4 million (14.6%) with an unreserved balance of $100.0 million (12.3%). These declining balances were anticipated by officials and fell slightly below the reserve target of an unreserved general fund balance equal to 15% of expenditures. The city also maintained its 2% contingency reserve and 3% TABOR reserve. The city's fiscal 2010 financial position is estimated to be similar to the prior year levels. Officials recognized during 2009 that closing the budget gap would likely involve some use of the unreserved general fund balance but that any use of reserves would not go below the 10% of expenditure level, which would be below the median for Denver's peer rating group. Going below 10% is reserved only for severe crisis and requires a formal replenishment plan with no growth in discretionary expenditures until the reserve is restored to 10%. Furthermore, as required by city charter, management will continue to annually budget for its 2% contingency reserve, which is typically not fully appropriated by year-end. In November 2005 voters approved a "de-Brucing" measure allowing the City to retain all non-property tax revenues in excess of TABOR limits for ten fiscal years. Unlike the prior five-year "de-Brucing" measure, the current exemption allows excess revenues to be spent on all general purposes with no specific funding designations. Moody's believes that this approval indicates critical voter support of measures intended to improve the City's financial flexibility and retain excess revenues as the economy resumes growth. In the event of declining assessed values, it is noted that Denver retains the legal authority to raise its operating property mill levy rate, without voter approval, sufficient to generate the prior year's levy dollars plus any additional growth allowed under TABOR as long as the rate does not exceed the City's cap of 12.783 mills. Due to past growth in assessed values and given that the city is not de-Bruced for property tax revenues, the city's general fund mill levy is well below its cap at 6.389 mills, or 49.9% of the maximum rate. For a more detailed discussion of the City & County of Denver, please refer to Moody's High Profile New Issue Report dated June 4, 2009. Outlook The outlook for the City and County of Denver's long-term ratings is stable. The stable outlook reflects management's sound practices and proven ability and willingness to make necessary budget adjustments to address budget shortfalls. Future credit evaluations will continue to closely monitor revenue collections, economic trends, and debt portfolio management. While near term economic conditions have weakened, the expectation for an economic recovery with above national average growth was also incorporated. KEY STATISTICS: City & County of Denver 2008 estimated population: 598,707 2009 Full market value: $78.56 billion Average annual growth in full value, 2004 to 2009: 8.1% Full value per capita: $132,698 FY08 total general fund balance: $171.4 million (15.3% of revenues) FY08 unreserved general fund balance: $149.6 million (13.3% of revenues) FY09 estimated total general fund balance: $171.4 million (14.6% of revenues) FY09 estimated unreserved general fund balance: $150.4 million (12.3% of revenues) Direct debt burden, net of utility supported debt: 2.3% Overall debt burden: 4.0% Principal payout (GO bonds in 10 years): 52.1% Stapleton Urban Redevelopment Area Key Ratios: Estimated population: 10,000 Land Area: 4,051 acres Principal payout (current offering, 10 years): 49.8% Incremental assessed valuation, 2010: $317.7 million Annual senior and second lien debt service coverage, 2009: 1.16x Maximum annual senior and second lien debt service coverage, 2009: 0.95x Average annual senior and second lien debt service coverage, 2009: 1.14x Annual senior and second lien debt service coverage, projected 2010: 1.48x Maximum annual senior and second lien debt service coverage, projected 2010: 0.99x Average annual senior and second lien debt service coverage, projected 2010: 1.19x The last rating action with respect to the City and County of Denver, Colorado was on June 3, 2009, when the Denver's unlimited tax general obligation bonds were assigned a Aa1 rating. Moody's has no outstanding underlying ratings on any previous obligations issued by the Denver Urban Renewal Authority. The rating assigned to the Denver Urban Renewal Authority's Stapleton Senior Subordinate Tax Increment Revenue Bonds, Series 2010B 1 was issued on Moody's municipal rating scale. Moody's has announced its plans to recalibrate all U.S. municipal ratings to its global scale and therefore, upon implementation of the methodology published in conjunction with this initiative, the rating will be recalibrated to a global scale rating comparable to other credits with a similar risk profile. Market participants should not view the recalibration of municipal ratings as rating upgrades, but rather as a recalibration of the ratings to a different rating scale. This recalibration does not reflect an improvement in credit quality or a change in our credit opinion for rated municipal debt issuers. For further details regarding the recalibration please visit www.moodys.com/gsr. The principal methodology used in rating the Denver Urban Renewal Authority's Stapleton Senior Subordinate Tax Increment Revenue Bonds, Series 2010B 1 was "Moody's Approach to the Moral Obligation Pledge" published in December 2008 which can be found at www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website. Analysts Patrick Ford Analyst Public Finance Group Moody's Investors Service Dan Steed Backup Analyst Public Finance Group Moody's Investors Service Matthew Jones Senior Credit Officer Senior Credit Officer Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553-0376 Research Clients: (212) 553-1653 © 2013 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. 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Appendix 3: Detailed Preliminary Series 2013 Financing Schedules Feb 13, 2013 1:44 pm Prepared by RBC Capital Markets TABLE OF CONTENTS Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'Aa3' Rating Market Rates **Preliminary Numbers - Subject to Change** Report Page Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Net Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Feb 13, 2013 1:44 pm Prepared by RBC Capital Markets Page 1 SOURCES AND USES OF FUNDS Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'Aa3' Rating Market Rates **Preliminary Numbers - Subject to Change** Sources: Bond Proceeds: Par Amount 14,545,000.00 Net Premium 155,837.85 14,700,837.85 Uses: Project Fund Deposits: Project Fund 13,452,685.35 Other Fund Deposits: Debt Service Reserve Fund 1,082,700.00 Delivery Date Expenses: Cost of Issuance 100,000.00 Underwriter's Discount 65,452.50 165,452.50 14,700,837.85 Feb 13, 2013 1:44 pm Prepared by RBC Capital Markets Page 2 BOND PRICING Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'Aa3' Rating Market Rates **Preliminary Numbers - Subject to Change** Maturity Yield to Premium Bond Component Date Amount Rate Yield Price Maturity (-Discount) Serial bonds: 12/01/2013 850,000 2.000% 0.400% 100.802 6,817.00 12/01/2014 680,000 2.000% 0.550% 102.167 14,735.60 12/01/2015 695,000 2.000% 0.750% 103.093 21,496.35 12/01/2016 750,000 2.000% 1.000% 103.433 25,747.50 12/01/2017 765,000 2.000% 1.300% 103.051 23,340.15 12/01/2018 780,000 2.000% 1.600% 102.098 16,364.40 12/01/2019 795,000 2.000% 1.900% 100.608 4,833.60 12/01/2020 810,000 2.000% 2.200% 98.623 -11,153.70 12/01/2021 830,000 3.000% 2.450% 104.198 34,843.40 12/01/2022 855,000 3.000% 2.630% 103.093 26,445.15 12/01/2023 880,000 3.000% 2.760% 101.994 C 2.780% 17,547.20 12/01/2024 905,000 3.000% 2.840% 101.324 C 2.864% 11,982.20 12/01/2025 930,000 3.000% 2.920% 100.659 C 2.937% 6,128.70 12/01/2026 960,000 3.000% 2.980% 100.164 C 2.985% 1,574.40 12/01/2027 990,000 3.000% 3.050% 99.417 -5,771.70 12/01/2028 1,020,000 3.000% 3.120% 98.533 -14,963.40 12/01/2029 1,050,000 3.000% 3.180% 97.702 -24,129.00 14,545,000 155,837.85 Dated Date 05/30/2013 Delivery Date 05/30/2013 First Coupon 12/01/2013 Par Amount 14,545,000.00 Premium 155,837.85 Production 14,700,837.85 101.071419% Underwriter's Discount -65,452.50 -0.450000% Purchase Price 14,635,385.35 100.621419% Accrued Interest Net Proceeds 14,635,385.35 Feb 13, 2013 1:44 pm Prepared by RBC Capital Markets Page 3 BOND SUMMARY STATISTICS Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'Aa3' Rating Market Rates **Preliminary Numbers - Subject to Change** Dated Date 05/30/2013 Delivery Date 05/30/2013 Last Maturity 12/01/2029 Arbitrage Yield 2.657854% True Interest Cost (TIC) 2.715346% Net Interest Cost (NIC) 2.743112% All-In TIC 2.803907% Average Coupon 2.811730% Average Life (years) 9.056 Duration of Issue (years) 7.859 Par Amount 14,545,000.00 Bond Proceeds 14,700,837.85 Total Interest 3,703,691.94 Net Interest 3,613,306.59 Total Debt Service 18,248,691.94 Maximum Annual Debt Service 1,082,700.00 Average Annual Debt Service 1,105,795.17 Par Average Average PV of 1 bp Bond Component Value Price Coupon Life change Serial bonds 14,545,000.00 101.071 2.812% 9.056 10,511.55 14,545,000.00 9.056 10,511.55 All-In Arbitrage TIC TIC Yield Par Value 14,545,000.00 14,545,000.00 14,545,000.00 + Accrued Interest + Premium (Discount) 155,837.85 155,837.85 155,837.85 - Underwriter's Discount -65,452.50 -65,452.50 - Cost of Issuance Expense -100,000.00 - Other Amounts Target Value 14,635,385.35 14,535,385.35 14,700,837.85 Target Date 05/30/2013 05/30/2013 05/30/2013 Yield 2.715346% 2.803907% 2.657854% Feb 13, 2013 1:44 pm Prepared by RBC Capital Markets Page 4 BOND DEBT SERVICE Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'Aa3' Rating Market Rates **Preliminary Numbers - Subject to Change** Period Ending Principal Coupon Interest Debt Service 12/01/2013 850,000 2.000% 188,591.94 1,038,591.94 12/01/2014 680,000 2.000% 358,100.00 1,038,100.00 12/01/2015 695,000 2.000% 344,500.00 1,039,500.00 12/01/2016 750,000 2.000% 330,600.00 1,080,600.00 12/01/2017 765,000 2.000% 315,600.00 1,080,600.00 12/01/2018 780,000 2.000% 300,300.00 1,080,300.00 12/01/2019 795,000 2.000% 284,700.00 1,079,700.00 12/01/2020 810,000 2.000% 268,800.00 1,078,800.00 12/01/2021 830,000 3.000% 252,600.00 1,082,600.00 12/01/2022 855,000 3.000% 227,700.00 1,082,700.00 12/01/2023 880,000 3.000% 202,050.00 1,082,050.00 12/01/2024 905,000 3.000% 175,650.00 1,080,650.00 12/01/2025 930,000 3.000% 148,500.00 1,078,500.00 12/01/2026 960,000 3.000% 120,600.00 1,080,600.00 12/01/2027 990,000 3.000% 91,800.00 1,081,800.00 12/01/2028 1,020,000 3.000% 62,100.00 1,082,100.00 12/01/2029 1,050,000 3.000% 31,500.00 1,081,500.00 14,545,000 3,703,691.94 18,248,691.94 Feb 13, 2013 1:44 pm Prepared by RBC Capital Markets Page 5 NET DEBT SERVICE Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'Aa3' Rating Market Rates **Preliminary Numbers - Subject to Change** Period Total Debt Service Net Ending Principal Interest Debt Service Reserve Fund Debt Service 12/01/2013 850,000 188,591.94 1,038,591.94 -5,443.58 1,033,148.36 12/01/2014 680,000 358,100.00 1,038,100.00 -10,827.00 1,027,273.00 12/01/2015 695,000 344,500.00 1,039,500.00 -10,827.00 1,028,673.00 12/01/2016 750,000 330,600.00 1,080,600.00 -10,827.00 1,069,773.00 12/01/2017 765,000 315,600.00 1,080,600.00 -10,827.00 1,069,773.00 12/01/2018 780,000 300,300.00 1,080,300.00 -10,827.00 1,069,473.00 12/01/2019 795,000 284,700.00 1,079,700.00 -10,827.00 1,068,873.00 12/01/2020 810,000 268,800.00 1,078,800.00 -10,827.00 1,067,973.00 12/01/2021 830,000 252,600.00 1,082,600.00 -10,827.00 1,071,773.00 12/01/2022 855,000 227,700.00 1,082,700.00 -10,827.00 1,071,873.00 12/01/2023 880,000 202,050.00 1,082,050.00 -10,827.00 1,071,223.00 12/01/2024 905,000 175,650.00 1,080,650.00 -10,827.00 1,069,823.00 12/01/2025 930,000 148,500.00 1,078,500.00 -10,827.00 1,067,673.00 12/01/2026 960,000 120,600.00 1,080,600.00 -10,827.00 1,069,773.00 12/01/2027 990,000 91,800.00 1,081,800.00 -10,827.00 1,070,973.00 12/01/2028 1,020,000 62,100.00 1,082,100.00 -10,827.00 1,071,273.00 12/01/2029 1,050,000 31,500.00 1,081,500.00 -1,093,527.00 -12,027.00 14,545,000 3,703,691.94 18,248,691.94 -1,261,375.58 16,987,316.36 Feb 13, 2013 3:53 pm Prepared by RBC Capital Markets TABLE OF CONTENTS Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'A1' Rating Market Rates **Preliminary Numbers - Subject to Change** Report Page Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Net Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Feb 13, 2013 3:53 pm Prepared by RBC Capital Markets Page 1 SOURCES AND USES OF FUNDS Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'A1' Rating Market Rates **Preliminary Numbers - Subject to Change** Sources: Bond Proceeds: Par Amount 14,545,000.00 Net Original Issue Discount -5,468.20 14,539,531.80 Uses: Project Fund Deposits: Project Fund 13,291,379.30 Other Fund Deposits: Debt Service Reserve Fund 1,082,700.00 Delivery Date Expenses: Cost of Issuance 100,000.00 Underwriter's Discount 65,452.50 165,452.50 14,539,531.80 Feb 13, 2013 3:53 pm Prepared by RBC Capital Markets Page 2 BOND PRICING Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'A1' Rating Market Rates **Preliminary Numbers - Subject to Change** Maturity Yield to Premium Bond Component Date Amount Rate Yield Price Maturity (-Discount) Serial bonds: 12/01/2013 850,000 2.000% 0.550% 100.727 6,179.50 12/01/2014 680,000 2.000% 0.700% 101.939 13,185.20 12/01/2015 695,000 2.000% 0.900% 102.716 18,876.20 12/01/2016 750,000 2.000% 1.150% 102.909 21,817.50 12/01/2017 765,000 2.000% 1.450% 102.389 18,275.85 12/01/2018 780,000 2.000% 1.750% 101.306 10,186.80 12/01/2019 795,000 2.000% 2.050% 99.697 -2,408.85 12/01/2020 810,000 2.000% 2.350% 97.605 -19,399.50 12/01/2021 830,000 3.000% 2.600% 103.033 25,173.90 12/01/2022 855,000 3.000% 2.780% 101.826 15,612.30 12/01/2023 880,000 3.000% 2.910% 100.742 C 2.917% 6,529.60 12/01/2024 905,000 3.000% 2.990% 100.082 C 2.992% 742.10 12/01/2025 930,000 3.000% 3.070% 99.277 -6,723.90 12/01/2026 960,000 3.000% 3.130% 98.577 -13,660.80 12/01/2027 990,000 3.000% 3.200% 97.693 -22,839.30 12/01/2028 1,020,000 3.000% 3.270% 96.736 -33,292.80 12/01/2029 1,050,000 3.000% 3.330% 95.836 -43,722.00 14,545,000 -5,468.20 Dated Date 05/30/2013 Delivery Date 05/30/2013 First Coupon 12/01/2013 Par Amount 14,545,000.00 Original Issue Discount -5,468.20 Production 14,539,531.80 99.962405% Underwriter's Discount -65,452.50 -0.450000% Purchase Price 14,474,079.30 99.512405% Accrued Interest Net Proceeds 14,474,079.30 Feb 13, 2013 3:53 pm Prepared by RBC Capital Markets Page 3 BOND SUMMARY STATISTICS Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'A1' Rating Market Rates **Preliminary Numbers - Subject to Change** Dated Date 05/30/2013 Delivery Date 05/30/2013 Last Maturity 12/01/2029 Arbitrage Yield 2.800217% True Interest Cost (TIC) 2.858638% Net Interest Cost (NIC) 2.865570% All-In TIC 2.948639% Average Coupon 2.811730% Average Life (years) 9.056 Duration of Issue (years) 7.825 Par Amount 14,545,000.00 Bond Proceeds 14,539,531.80 Total Interest 3,703,691.94 Net Interest 3,774,612.64 Total Debt Service 18,248,691.94 Maximum Annual Debt Service 1,082,700.00 Average Annual Debt Service 1,105,795.17 Par Average Average PV of 1 bp Bond Component Value Price Coupon Life change Serial bonds 14,545,000.00 99.962 2.812% 9.056 10,824.45 14,545,000.00 9.056 10,824.45 All-In Arbitrage TIC TIC Yield Par Value 14,545,000.00 14,545,000.00 14,545,000.00 + Accrued Interest + Premium (Discount) -5,468.20 -5,468.20 -5,468.20 - Underwriter's Discount -65,452.50 -65,452.50 - Cost of Issuance Expense -100,000.00 - Other Amounts Target Value 14,474,079.30 14,374,079.30 14,539,531.80 Target Date 05/30/2013 05/30/2013 05/30/2013 Yield 2.858638% 2.948639% 2.800217% Feb 13, 2013 3:53 pm Prepared by RBC Capital Markets Page 4 BOND DEBT SERVICE Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'A1' Rating Market Rates **Preliminary Numbers - Subject to Change** Period Ending Principal Coupon Interest Debt Service 12/01/2013 850,000 2.000% 188,591.94 1,038,591.94 12/01/2014 680,000 2.000% 358,100.00 1,038,100.00 12/01/2015 695,000 2.000% 344,500.00 1,039,500.00 12/01/2016 750,000 2.000% 330,600.00 1,080,600.00 12/01/2017 765,000 2.000% 315,600.00 1,080,600.00 12/01/2018 780,000 2.000% 300,300.00 1,080,300.00 12/01/2019 795,000 2.000% 284,700.00 1,079,700.00 12/01/2020 810,000 2.000% 268,800.00 1,078,800.00 12/01/2021 830,000 3.000% 252,600.00 1,082,600.00 12/01/2022 855,000 3.000% 227,700.00 1,082,700.00 12/01/2023 880,000 3.000% 202,050.00 1,082,050.00 12/01/2024 905,000 3.000% 175,650.00 1,080,650.00 12/01/2025 930,000 3.000% 148,500.00 1,078,500.00 12/01/2026 960,000 3.000% 120,600.00 1,080,600.00 12/01/2027 990,000 3.000% 91,800.00 1,081,800.00 12/01/2028 1,020,000 3.000% 62,100.00 1,082,100.00 12/01/2029 1,050,000 3.000% 31,500.00 1,081,500.00 14,545,000 3,703,691.94 18,248,691.94 Feb 13, 2013 3:53 pm Prepared by RBC Capital Markets Page 5 NET DEBT SERVICE Fort Collins Urban Renewal Authority Tax Increment Revenue Bonds, Series 2013 02/11/13 'A1' Rating Market Rates **Preliminary Numbers - Subject to Change** Period Total Debt Service Net Ending Principal Interest Debt Service Reserve Fund Debt Service 12/01/2013 850,000 188,591.94 1,038,591.94 -8,165.36 1,030,426.58 12/01/2014 680,000 358,100.00 1,038,100.00 -16,240.50 1,021,859.50 12/01/2015 695,000 344,500.00 1,039,500.00 -16,240.50 1,023,259.50 12/01/2016 750,000 330,600.00 1,080,600.00 -16,240.50 1,064,359.50 12/01/2017 765,000 315,600.00 1,080,600.00 -16,240.50 1,064,359.50 12/01/2018 780,000 300,300.00 1,080,300.00 -16,240.50 1,064,059.50 12/01/2019 795,000 284,700.00 1,079,700.00 -16,240.50 1,063,459.50 12/01/2020 810,000 268,800.00 1,078,800.00 -16,240.50 1,062,559.50 12/01/2021 830,000 252,600.00 1,082,600.00 -16,240.50 1,066,359.50 12/01/2022 855,000 227,700.00 1,082,700.00 -16,240.50 1,066,459.50 12/01/2023 880,000 202,050.00 1,082,050.00 -16,240.50 1,065,809.50 12/01/2024 905,000 175,650.00 1,080,650.00 -16,240.50 1,064,409.50 12/01/2025 930,000 148,500.00 1,078,500.00 -16,240.50 1,062,259.50 12/01/2026 960,000 120,600.00 1,080,600.00 -16,240.50 1,064,359.50 12/01/2027 990,000 91,800.00 1,081,800.00 -16,240.50 1,065,559.50 12/01/2028 1,020,000 62,100.00 1,082,100.00 -16,240.50 1,065,859.50 12/01/2029 1,050,000 31,500.00 1,081,500.00 -1,098,940.50 -17,440.50 14,545,000 3,703,691.94 18,248,691.94 -1,350,713.36 16,897,978.58 Net Capital 1,120,091 1,156,478 1,365,027 Excess Net Capital 1,020,505 1,050,116 1,285,605 RBC Financial Group US $000 as of 10/31 2009 2010 2011 Total Regulatory Capital 29,927,898 36,082,375 41,636,315 Total Equity Capital 25,611,300 28,386,400 35,169,750 Tier 1 Capital 27,262,092 32,579,148 36,248,695 6 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 % Yield 5 Year AAA MMD 10 Year AAA MMD 20 Year AAA MMD 30 Year AAA MMD in Business Administration from the University of Denver and a degree in Economics from the University of Colorado. She also holds Series 7 and 63 licenses. Lauren Hartman, Analyst Project Execution Lauren has four years of experience providing quantitative and transaction support for Colorado issuers, including Colorado State University, Denver Public Schools and City of Colorado Springs. Lauren joined RBCCM in 2011 after interning at George K. Baum & Company. She has an MBA from the University of Denver and a Bachelor's of Science Degree in Finance from Miami University (Ohio). Lauren holds Series 7, 63 and 79 licenses. Counterparty Tax Increment Revenue Bonds, Series 2007A-1 (Variable Rate) $51.255 Property & Sales Taxes, Public Improvement Fees NR / NR / NR N/A (Refunded) Letter of Credit Co-Manager/Swap Counterparty Sole Manager/ Remarketing Agent Centerra Metropolitan District #1 Refunding Revenue Loan, Series 2011 (Institutional Placement – Variable Rate) $130.920 Public Improvement Fees NR / NR / NR NR / NR / NR None Placement Agent Refunding and Improvement Revenue Bonds, Series 2008 (Variable Rate) $112.000 Public Improvement Fees NR / A+ / NR N/A (Refunded) Letter of Credit Sole Manager / Remarketing Agent Briargate Center Bus Imp Dist BURA (Arista) Canterberry Cross Metro Dist Centerra Metro Dist Denver Urban Renewal Auth Goldsmith Metro Dist Interlocken Metro Dist Inverness Metro Dist Larkridge Metro Dist Lowry Redevelopment Auth Meridian Metro Dist Park Creek Metro Dist Plaza Metro Dist Rampart Range Metro Dist Sand Creek Metro Dist Sheridan Redevelopment Auth Solitude Metro Dist Villages Metro Dist California Bakersfield Assess Dist Fullerton Comm Facs Dist Imperial Comm Facs Dist Oakdale Comm Facs Dist Stockton Comm Facs Dist Tustin City Comm Facs Dist Utah Coral Canyon Special Service Dist Ohio Cuyahoga Co (Garfield Hts) SD Miami Conservancy District Seneca County (Folsom Cordova) USD Pennsylvania Chester Co (Octorara) ASD Lincoln Inter Unit West Lampeter Twp York City Nebraska Douglas Co Sanit & Imp Dist Sarpy Co Sanit & Imp Dist Indiana Carmel Redevelopment Dist Oregon Chehalem Park & Rec Dist North Unit Irrig Dist Texas Dallas Co Util & Reclam Dist East Montgomery Co Imp Dist Fort Bend Co Levee Imp Dist Montgomery Co Util Dist Town Center Imp Dist Since 2003, RBCCM has participated in 30 Urban Renewal Authority or tax increment finance transactions totaling $2.3 billion in Colorado, more than any other firm in the State. A summary of these transactions is below in addition to case studies for the Denver Urban Renewal Authority’s Stapleton Project and The Plaza Metropolitan District’s Belmar Project. RBCCM served as lead or sole underwriter for the financing of both projects. Water & Sewer Gas Facilities Flood Control Public Power Prepaid Gas Caps & Collars Swaps Forward Purchase Contracts Arbitrage Rebate CFDs MUDs Mello Roos Metro Districts Urban Renewal Our experienced and highly focused bankers comprise one of the largest teams of public finance banking professionals in the United States. In 2012 Thomson Financial ranked RBCCM 5th in terms of senior managed negotiated transactions by par amount and 1st in terms of number of transactions with 605 transactions totaling $20.2 billion. San Francisco, CA Denver, CO Dallas, TX St. Petersburg, FL Chciago, IL Philadelphia, PA New York, NY Boston, MA Hous ton, TX Los Angeles, CA Albany, NY Jacksonv ille, FL Hartford, CT Phoenix, AZ Albuquerque, NM Baltimore, MD Charleston, SC Cleveland, OH San Ant onio, TX Scranton, PA Lancaster, PA Columbus, OH Charlott e, NC Minneapolis, MN Cincninati, OH Florham Park, NJ Issues RBC Capital Markets 1,871.3 1 27.6 32 Barclays 939.7 2 13.9 5 Stifel Nicolaus & Co Inc 658.8 3 9.7 26 J P Morgan Securities LLC 592.1 4 8.7 8 Goldman Sachs & Co 556.0 5 8.2 4 George K. Baum & Company Inc 531.1 6 7.8 52 Citi 306.0 7 4.5 2 Robert W. Baird & Co Inc 295.8 8 4.4 5 D A Davidson & Co 225.0 9 3.3 18 Ziegler 199.4 10 2.9 2 Industry Total $6,774.2 - 100.0 169 Source: Thomson Financial. Excludes competitive issues, notes and private placements.