Q&A NJEDA School Construction Bond RFP dated December 6, 2013

Transcription

1 Q&A NJEDA School Construction Bond RFP dated December 6, Is the Authority interested in receiving RFP responses from firms seeking to serve as a co-managing underwriter? A. Not at this time. The State is currently seeking innovative financing ideas. Should the State receive useful ideas, co-managers will be added where appropriate via a separate RFP. 2. Question 3.6 seeks information on participation in NJ competitive transactions since January Can other competitive NJ state-supported and moral obligation transactions within the same time period be included? A. No; the question relates to specific transactions. 3. For purposes of comparing alternatives, what discount rate does the State favor employing when evaluating refunding economics: arbitrage yield, TIC or All-in TIC? A. Arbitrage yield. 4. Are firms that apply only for a Co-Manager role considered for this role only AFTER Co-Manager slots are filled by lower scoring Senior and Co-Senior Manager candidates? A. Please see question Will the State consider employing a respondent as a Co-Senior Manager in the event it implements a novel feature of the financing provided by the respondent? Or in the alternative, can the State select different Senior Managers for separate Series? A. Yes and Yes. 6. What is the remaining annual swap amortization per each swap agreement as of December 10, 2013? A. See attached.

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71 Date: January 13, 2011 To: Attn: New Jersey Economic Development Authority ( Counterparty ) Director, Program Services Telephone No.: (609) Fax No: (609) To: Attn: jrosenfeld@njeda.com New Jersey Office of Public Finance Director, Office of Public Finance Telephone No.: (609) Fax No: (609) From: Subject: james.petrino@treas.state.nj.us Ryan.feeney@treas.state.nj.us Megan.shen@treas.state.nj.us UBS AG, Stamford Branch ( UBS ) Amendment to Swap Transaction UBS Ref: (formerly UBS Ref ) Dear Sirs, The purpose of this communication is to amend, effective on the Second Amendment Effective Date specified below, that certain Confirmation dated 30 April 2008 (the Amendment Date ), effective May 1, 2008 (the Amendment Effective Date ), with a notional amount (the Prior Notional Amount ) of USD 195,582,500 and a termination date of September 1, 2032 (the Prior Confirmation ), which amended and restated the Confirmation dated 11 April 2003, UBS Ref No (formerly UBS Ref ), providing for the terms and conditions of the Transaction entered into between UBS and Counterparty on the Trade Date specified below effective as of the Original Effective Date specified below. This amended Confirmation (hereinafter referred to as the Confirmation ) constitutes a Confirmation as referred to in the Master Agreement or Agreement specified below. The Prior Confirmation is being amended due to the optional early termination by the Counterparty of a portion of the Prior Notional Amount. For the avoidance of doubt, the Prior Confirmation will remain in full force and effect, except to the extent amended by this Confirmation. UBS Ref Amendment 1

72 UBS and the Counterparty have entered into a Master Agreement, dated as of 10 April 2003, which sets forth the general terms and conditions, as well as amendments, applicable to this Transaction (together with any Schedule, Credit Support Annex and any other Confirmation, the "Agreement"). This Confirmation supplements and forms part of the Agreement and is subject to the Agreement. All provisions contained in, or incorporated by reference to, such Agreement shall govern this Confirmation and as expressly modified below. In the event of any inconsistency between the provisions of the Agreement and any Prior Confirmation and this Confirmation (except for any reinstatement as described in "Termination Payment below), this Confirmation will prevail for purposes of this Transaction. The terms of the particular Swap Transaction to which this Confirmation relates are as follows: General Terms Amendment Date: 30 April 2008 Amendment Effective Date: 1 May 2008 Second Amendment Date: 13 January 2011 Second Amendment Effective Date: 20 January 2011 Trade Date: 10 April 2003 Original Effective Date: 1 September 2007 Termination Date: 1 September 2032 Prior Notional Amount: Initially USD 195,582,500, thereafter amortizing as per the Schedule I attached to the Prior Confirmation. Terminated Notional Amount: USD 79,485,000 as of 20 January New Notional Amount: Calculation Agent: Business Days: Initially USD 116,097,500, thereafter amortizing as per the Revised Amortization Schedule set forth below. UBS Business Day means any day other than a Saturday or Sunday or a legal holiday in the State of New Jersey or a day on which banking institutions are authorized or required by law to be closed for commercial banking in either the State of New York or the State of New Jersey or a day on which the New York Stock Exchange is closed. Fixed Amounts Fixed Rate Payer: Fixed Rate Payer Period End Dates: UBS Ref Amendment Counterparty First day of the month, commencing on the first of the month following the Second Amendment Effective Date and ending on the Termination Date, subject to No Adjustment. 2

73 Fixed Rate Payer Payment Dates: Same as Fixed Rate Payer Period End Dates, but subject to adjustment in accordance with the Business Day Convention. Fixed Rate: % Fixed Rate Date Count Fraction: 30/360 Business Day Convention for Adjustment: Modified Following Floating Amounts Floating Rate Payer: Floating Rate Period End Dates: Floating Rate Payer Payment Dates: Floating Rate Option: Reset Dates: Floating Rate Compounding: Floating Rate Averaging: UBS First day of the month, commencing on the first day of the month following the Second Amendment Effective Date, subject to No Adjustment. Same as Floating Rate Payer Period End Dates, but subject to adjustment in accordance with the Business Day Convention. The Index Rate established two London Banking Days prior to each Reset Date. Index Rate means for any period 71.57% of LIBOR as determined by UBS The Effective Date and each Wednesday of each week prior to the Termination Date. Not applicable Weighted daily average of all rates within a Calculation Period Floating Rate Day Count Fraction: Actual / 360 Business Day Convention for Adjustment: Modified Following Revised Amortization Schedule For the Calculation Periods from and including To but excluding Notional Balance Amortization January 1, 2011 September 1, ,097, September 1, 2011 September 1, ,097, UBS Ref Amendment 3

74 September 1, 2012 September 1, ,097, September 1, 2013 September 1, ,097, September 1, 2014 September 1, ,097, September 1, 2015 September 1, ,097, September 1, 2016 September 1, ,097, September 1, 2017 September 1, ,097, September 1, 2018 September 1, ,097, September 1, 2019 September 1, ,097, September 1, 2020 September 1, ,097, September 1, 2021 September 1, ,097, September 1, 2022 September 1, ,097, September 1, 2023 September 1, ,097, September 1, 2024 September 1, ,097, ,222, September 1, 2025 September 1, ,875, ,817, September 1, 2026 September 1, ,057, ,437, September 1, 2027 September 1, ,620, ,090, September 1, 2028 September 1, ,530, ,772, September 1, 2029 September 1, ,757, ,490, September 1, 2030 September 1, ,267, ,240, September 1, 2031 September 1, ,027, ,027, Documents to be delivered Each party shall deliver to the other, at the time of its execution of this Confirmation, (i) evidence of the specimen signature and incumbency of each person who is executing the Confirmation on the party s behalf, (ii) a copy of the resolution or resolutions (or the equivalent thereof) of the governing body of Counterparty, certified by an appropriate official of Counterparty, pursuant to which Counterparty is authorized to enter into this Amended Confirmation and (iii) an opinion of counsel of each party in a form reasonably satisfactory to the other party. Termination Payment In connection with the termination of the Terminated Notional Amount, the Counterparty shall pay USD 13,886,000 (the Termination Amount ) to UBS AG for value on January 20, 2011 (the Payment Date ). The Termination Amount does not include accrued Fixed and Floating Amount payments. Fixed and Floating Amount Payments accrued on the Terminated Notional Amount from and including January 1, 2011, to but excluding the Payment Date will be paid by the Counterparty on the Payment Date. Fixed and Floating Amount Payments on the New Notional Amount accrued from and including January 1, 2011, to but excluding February 1, 2011, will be paid on February 1, The Counterparty and UBS AG acknowledge and agree that the Termination Payment shall be paid from proceeds of the Counterparty s $123,220,000 School Facilities Construction Refunding Bonds, 2011 Series FF (Federally Taxable) (the Refunding Bonds ) or any other funds held under the Bond Resolution as amended and supplemented to date; provided, however, that if such Refunding Bonds have not been issued by the Payment Date, or if the Counterparty notifies UBS AG on a date prior to the Payment Date (the Notification Date ) that the Refunding Bonds will not be issued, the Counterparty shall, at its option, on the earlier of the Notification Date or the Payment Date, either (a) fund the Termination Payment on the Payment Date from any available funds with the same force and effect as if the Termination Payment were paid from the Refunding Bonds proceeds, or (b) immediately request a reinstatement of the terms of the Transaction under the Prior Confirmation which reinstatement shall occur immediately upon such request. In the case of (b) above, UBS AG will determine its Loss, if any, in connection with such reinstatement of the terms of the Transaction under the Prior UBS Ref Amendment 4

75 Confirmation. In addition, in order to compensate UBS AG or the Counterparty, as applicable, for the amount of such Loss, UBS AG shall make an adjustment to the Fixed Rate for the remainder of the Term, provided the Fixed Rate, including an additional amount for Loss, does not exceed 5.50% per annum. Such adjustment shall be determined by UBS AG in good faith, but subject to the approval by the Counterparty and the New Jersey State Treasurer or his designee, in consultation with Lamont Investment Advisors, the Counterparty s swap advisor. Loss shall mean, with respect to the Transaction, an amount that UBS AG reasonably determines in good faith to be its total losses (or gains) in connection with reinstating the terms of the Transaction under the Prior Confirmation, which shall consist of any change in value to UBS AG of the Transaction due to a movement in the USD-LIBOR yield curve, as it relates to the Transaction, during the period between the Second Amendment Date and the date of the reinstatement of the Transaction under the Prior Confirmation which shall be on the earlier of the Notification Date or the Payment Date. In addition, the total amount of Loss shall include, without duplication, UBS AG s costs, if any, relating to any loss of bargain, cost of hedging, and legal or other costs associated with the reinstatement of the Transaction under the Prior Confirmation (collectively, costs ), and shall be promptly reimbursed by the Counterparty to UBS AG, it being understood that, in aggregate, such costs shall not exceed the present value of one (1) basis point when applied to the Terminated Notional Amount. The Counterparty shall have the right to review such Loss calculation in accordance with the preceding paragraph. Relationship between Parties Each party will be deemed to represent to the other party on the date on which it entered into this Transaction and on the Second Amendment Date that the representations made by it in the Agreement are true and correct in all material respects on such date and that (in the absence of a written agreement between the parties which expressly imposes affirmative obligations to the contrary for this Transaction): (a) Non-Reliance. Each party is acting for its own account, and has made its own independent decisions to enter into this Transaction and this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. Each party is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanation relating to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction. (b) Assessment and Understanding. Each party is capable of assessing the merits of and understands (on its own behalf or through independent professional advice), and accepts, the terms, conditions and risks of this Transaction. Each party is also capable of assuming, and assumes, the risks of this Transaction. (c) Status of the Parties. Neither party is acting as a fiduciary for or as an adviser to the other in respect of this Transaction. References in this clause to "a party" shall, in the case of UBS AG and where the context so allows, include references to any affiliate of UBS AG. Risk Considerations The Counterparty acknowledges receipt from UBS, at or prior to the time of Counterparty's final approval of the Transaction evidenced by this Confirmation, of a document entitled 'Risk Considerations'. UBS Ref Amendment 5

76 UBS Account Details Account for payments in USD: Bank: UBS AG, Stamford ABA/Bank No.: Account No.: 101-WA Reference: New Jersey Economic Development Authority UBS ref Counterparty Account Details Account for payments in USD: Bank: US Bank NA ABA/Bank No.: Account No.: A/C Account Name: NJEDA Sch Fac Const Offices (a) The office of UBS AG for the Swap Transaction is Stamford, CT; and (b) The office of the Counterparty for the Swap Transaction is Trenton, New Jersey. Contact Names at UBS Settlements: Hotline: (203) Documentation Queries: Legal Department: (203) Swift: UBSWUS33 Fax: (203) Address: UBS AG 677 Washington Boulevard Stamford, CT UBS Ref Amendment 6

77 Please confirm that the foregoing correctly sets forth the terms and conditions of our agreement by executing a copy of this Confirmation and returning it to us by facsimile to (203) for the attention of Pamela Tasik. Yours Faithfully For and on Behalf of UBS AG, Stamford Branch By: By: Name: Julie Ontaneda Name: Patrick Hofer Title: Director Title: Associate Director Acknowledged and agreed by New Jersey Economic Development Authority as of the Second Amendment Date specified above. By: Name: Title: UBS Ref Amendment 7

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79 Date: January 13, 2011 To: Attn: New Jersey Economic Development Authority ( Counterparty ) Director, Program Services Telephone No.: (609) Fax No: (609) To: Attn: jrosenfeld@njeda.com New Jersey Office of Public Finance Director, Office of Public Finance Telephone No.: (609) Fax No: (609) From: Subject: james.petrino@treas.state.nj.us Ryan.feeney@treas.state.nj.us Megan.shen@treas.state.nj.us UBS AG, Stamford Branch ( UBS ) Amendment to Swap Transaction UBS Ref: (formerly UBS Ref ) Dear Sirs, The purpose of this communication is to amend, effective on the Second Amendment Effective Date specified below, that certain Confirmation dated 30 April 2008 (the Amendment Date ), effective May 1, 2008 (the Amendment Effective Date ), with a notional amount (the Prior Notional Amount ) of USD 172,310,000 and a termination date of September 1, 2029 (the Prior Confirmation ), which amended and restated the Confirmation dated 11 April 2003, UBS Ref No (formerly UBS Ref ), providing for the terms and conditions of the Transaction entered into between UBS and Counterparty on the Trade Date specified below effective as of the Original Effective Date specified below. This amended Confirmation (hereinafter referred to as the Confirmation ) constitutes a Confirmation as referred to in the Master Agreement or Agreement specified below. The Prior Confirmation is being amended due to the optional early termination by the Counterparty of a portion of the Prior Notional Amount. For the avoidance of doubt, the Prior Confirmation will remain in full force and effect, except to the extent amended by this Confirmation. UBS Ref Amendment 1

80 UBS and the Counterparty have entered into a Master Agreement, dated as of 10 April 2003, which sets forth the general terms and conditions, as well as amendments, applicable to this Transaction (together with any Schedule, Credit Support Annex and any other Confirmation, the "Agreement"). This Confirmation supplements and forms part of the Agreement and is subject to the Agreement. All provisions contained in, or incorporated by reference to, such Agreement shall govern this Confirmation and as expressly modified below. In the event of any inconsistency between the provisions of the Agreement and any Prior Confirmation and this Confirmation (except for any reinstatement as described in "Termination Payment below), this Confirmation will prevail for purposes of this Transaction. The terms of the particular Swap Transaction to which this Confirmation relates are as follows: General Terms Amendment Date: 30 April 2008 Amendment Effective Date: 1 May 2008 Second Amendment Date: 13 January 2011 Second Amendment Effective Date: 20 January 2011 Trade Date: 11 April 2003 Original Effective Date: 1 September 2004 Termination Date: 1 September 2029 Prior Notional Amount: Initially USD 172,310,000, thereafter amortizing as per the Schedule I attached to the Prior Confirmation. Terminated Notional Amount: USD 107,987,500 as of 20 January New Notional Amount: Calculation Agent: Business Days: Initially USD 64,322,500, thereafter amortizing as per the Revised Amortization Schedule set forth below. UBS Business Day means any day other than a Saturday or Sunday or a legal holiday in the State of New Jersey or a day on which banking institutions are authorized or required by law to be closed for commercial banking in either the State of New York or the State of New Jersey or a day on which the New York Stock Exchange is closed. Fixed Amounts Fixed Rate Payer: Fixed Rate Payer Period End Dates: UBS Ref Amendment Counterparty First day of the month, commencing on the first of the month following the Second Amendment Effective Date and ending on the Termination Date, subject to No Adjustment. 2

81 Fixed Rate Payer Payment Dates: Same as Fixed Rate Payer Period End Dates, but subject to adjustment in accordance with the Business Day Convention. Fixed Rate: % Fixed Rate Date Count Fraction: 30/360 Business Day Convention for Adjustment: Modified Following Floating Amounts Floating Rate Payer: Floating Rate Period End Dates: Floating Rate Payer Payment Dates: Floating Rate Option: Reset Dates: Floating Rate Compounding: Floating Rate Averaging: UBS First day of the month, commencing on the first day of the month following the Second Amendment Effective Date, subject to No Adjustment. Same as Floating Rate Payer Period End Dates, but subject to adjustment in accordance with the Business Day Convention. The Index Rate established two London Banking Days prior to each Reset Date. Index Rate means for any period 71.13% of LIBOR as determined by UBS The Effective Date and each Wednesday of each week prior to the Termination Date. Not applicable Weighted daily average of all rates within a Calculation Period Floating Rate Day Count Fraction: Actual / 360 Business Day Convention for Adjustment: Modified Following Revised Amortization Schedule For the Calculation Periods from and including To but excluding Notional Balance Amortization January 1, 2011 September 1, ,322, UBS Ref Amendment 3

82 September 1, 2011 September 1, ,322, September 1, 2012 September 1, ,322, September 1, 2013 September 1, ,322, September 1, 2014 September 1, ,322, September 1, 2015 September 1, ,322, September 1, 2016 September 1, ,322, September 1, 2017 September 1, ,322, September 1, 2018 September 1, ,322, September 1, 2019 September 1, ,322, September 1, 2020 September 1, ,322, September 1, 2021 September 1, ,322, September 1, 2022 September 1, ,322, September 1, 2023 September 1, ,322, September 1, 2024 September 1, ,322, September 1, 2025 September 1, ,322, ,990, September 1, 2026 September 1, ,332, ,695, September 1, 2027 September 1, ,637, ,432, September 1, 2028 September 1, ,205, ,205, Documents to be delivered Each party shall deliver to the other, at the time of its execution of this Confirmation, (i) evidence of the specimen signature and incumbency of each person who is executing the Confirmation on the party s behalf, (ii) a copy of the resolution or resolutions (or the equivalent thereof) of the governing body of Counterparty, certified by an appropriate official of Counterparty, pursuant to which Counterparty is authorized to enter into this Amended Confirmation and (iii) an opinion of counsel of each party in a form reasonably satisfactory to the other party. Termination Payment In connection with the termination of the Terminated Notional Amount, the Counterparty shall pay USD 15,846,000 (the Termination Amount ) to UBS AG for value on January 20, 2011 (the Payment Date ). The Termination Amount does not include accrued Fixed and Floating Amount payments. Fixed and Floating Amount Payments accrued on the Terminated Notional Amount from and including January 1, 2011, to but excluding the Payment Date will be paid by the Counterparty on the Payment Date. Fixed and Floating Amount Payments on the New Notional Amount accrued from and including January 1, 2011, to but excluding February 1, 2011, will be paid on February 1, The Counterparty and UBS AG acknowledge and agree that the Termination Payment shall be paid from proceeds of the Counterparty s $123,220,000 School Facilities Construction Refunding Bonds, 2011 Series FF (Federally Taxable) (the Refunding Bonds ) or any other funds held under the Bond Resolution as amended and supplemented to date; provided, however, that if such Refunding Bonds have not been issued by the Payment Date, or if the Counterparty notifies UBS AG on a date prior to the Payment Date (the Notification Date ) that the Refunding Bonds will not be issued, the Counterparty shall, at its option, on the earlier of the Notification Date or the Payment Date, either (a) fund the Termination Payment on the Payment Date from any available funds with the same force and effect as if the Termination Payment were paid from the Refunding Bonds proceeds, or (b) immediately request a reinstatement of the terms of the Transaction under the Prior Confirmation which reinstatement shall occur immediately upon such request. In the case of (b) above, UBS AG will determine its Loss, if any, in connection with such reinstatement of the terms of the Transaction under the Prior Confirmation. In addition, in order to compensate UBS AG or the Counterparty, as applicable, for the amount of such Loss, UBS AG shall make an adjustment to the Fixed Rate for the remainder of the Term, provided the Fixed Rate, including an additional amount for Loss, does not exceed 5.50% per annum. Such adjustment shall be UBS Ref Amendment 4

83 determined by UBS AG in good faith, but subject to the approval by the Counterparty and the New Jersey State Treasurer or his designee, in consultation with Lamont Investment Advisors, the Counterparty s swap advisor. Loss shall mean, with respect to the Transaction, an amount that UBS AG reasonably determines in good faith to be its total losses (or gains) in connection with reinstating the terms of the Transaction under the Prior Confirmation, which shall consist of any change in value to UBS AG of the Transaction due to a movement in the USD-LIBOR yield curve, as it relates to the Transaction, during the period between the Second Amendment Date and the date of the reinstatement of the Transaction under the Prior Confirmation which shall be on the earlier of the Notification Date or the Payment Date. In addition, the total amount of Loss shall include, without duplication, UBS AG s costs, if any, relating to any loss of bargain, cost of hedging, and legal or other costs associated with the reinstatement of the Transaction under the Prior Confirmation (collectively, costs ), and shall be promptly reimbursed by the Counterparty to UBS AG, it being understood that, in aggregate, such costs shall not exceed the present value of one (1) basis point when applied to the Terminated Notional Amount. The Counterparty shall have the right to review such Loss calculation in accordance with the preceding paragraph. Relationship between Parties Each party will be deemed to represent to the other party on the date on which it entered into this Transaction and on the Second Amendment Date that the representations made by it in the Agreement are true and correct in all material respects on such date and that (in the absence of a written agreement between the parties which expressly imposes affirmative obligations to the contrary for this Transaction): (a) Non-Reliance. Each party is acting for its own account, and has made its own independent decisions to enter into this Transaction and this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. Each party is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanation relating to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction. (b) Assessment and Understanding. Each party is capable of assessing the merits of and understands (on its own behalf or through independent professional advice), and accepts, the terms, conditions and risks of this Transaction. Each party is also capable of assuming, and assumes, the risks of this Transaction. (c) Status of the Parties. Neither party is acting as a fiduciary for or as an adviser to the other in respect of this Transaction. References in this clause to "a party" shall, in the case of UBS AG and where the context so allows, include references to any affiliate of UBS AG. Risk Considerations The Counterparty acknowledges receipt from UBS, at or prior to the time of Counterparty's final approval of the Transaction evidenced by this Confirmation, of a document entitled 'Risk Considerations'. UBS Ref Amendment 5

84 UBS Account Details Account for payments in USD: Bank: UBS AG, Stamford ABA/Bank No.: Account No.: 101-WA Reference: New Jersey Economic Development Authority UBS ref Counterparty Account Details Account for payments in USD: Bank: US Bank NA ABA/Bank No.: Account No.: A/C Account Name: NJEDA Sch Fac Const Offices (a) The office of UBS AG for the Swap Transaction is Stamford, CT; and (b) The office of the Counterparty for the Swap Transaction is Trenton, New Jersey. Contact Names at UBS Settlements: Hotline: (203) Documentation Queries: Legal Department: (203) Swift: UBSWUS33 Fax: (203) Address: UBS AG 677 Washington Boulevard Stamford, CT UBS Ref Amendment 6

85 Please confirm that the foregoing correctly sets forth the terms and conditions of our agreement by executing a copy of this Confirmation and returning it to us by facsimile to (203) for the attention of Pamela Tasik. Yours Faithfully For and on Behalf of UBS AG, Stamford Branch By: By: Name: Julie Ontaneda Name: Patrick Hofer Title: Director Title: Associate Director Acknowledged and agreed by New Jersey Economic Development Authority as of the Second Amendment Date specified above. By: Name: Title: UBS Ref Amendment 7

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