REQUEST FOR PROPOSAL (RFP) FOR SWAP PORTFOLIO MONITOR SERVICES AND SWAP ADVISORY CONSULTANT SERVICES FOR THE DEPARTMENT OF TREASURY

Transcription

1 REQUEST FOR PROPOSAL (RFP) FOR SWAP PORTFOLIO MONITOR SERVICES AND SWAP ADVISORY CONSULTANT SERVICES FOR THE DEPARTMENT OF TREASURY Date Issued: January 25, 2011 Responses Due by: 4 P.M. Eastern Standard Time on February 8, 2011 STATE OF NEW JERSEY DEPARTMENT OF THE TREASURY OFFICE OF PUBLIC FINANCE 50 WEST STATE STREET, 5 TH FLOOR TRENTON, NEW JERSEY JAMES M. PETRINO DIRECTOR REQUEST FOR PROPOSAL (RFP) Page 1 of 15

2 I. PURPOSE AND INTENT FOR SWAP PORTFOLIO MONITOR SERVICES AND SWAP ADVISORY CONSULTANT SERVICES FOR THE DEPARTMENT OF TREASURY The Department of the Treasury of the State of New Jersey (the State ) seeks to engage a firm or firms to provide portfolio monitoring services and consulting services (herein referred to as the Swap Monitor and Swap Consultant, respectively) to the State concerning interest rate exchange agreements which have been and may be entered into by various independent authorities, as hereinafter defined, in connection with their issuance of bonds, notes and other obligations (collectively, Bonds ) the debt service on which is paid pursuant to contracts and/or leases with the State. These interest rate exchange agreements, or variations thereon, commonly referred to as Swaps or Swap Agreements are entered into by the issuers of such Bonds in order to manage interest rate risk. A description of the State s current Swap portfolio is included herein as Attachment I. The Swap Monitor will be required to provide valuations, reporting and other monitoring services as described below on any matters relating to the State s existing portfolio of Swaps as well as on any additional Swaps that may be considered or entered into during the term of the engagement. The Swap Consultant will be required to act as the advisor to the State by providing the consulting services as described below on any transactional matters relating to the State s existing portfolio of Swaps, as herein referenced, as well as on any transactional matters relating to additional Swaps that may be considered or entered into during the term of the engagement. Firms are invited to submit a proposal or proposals in response to this RFP, for review by the State, to perform one or both of the requested services. Firms must clearly define which engagement(s) they wish to be considered for and, further, must demonstrate compliance with the relevant minimum requirements for the defined engagement(s). Firms desiring to be considered for both engagements should submit separate proposals for each service. The State reserves the right to, at its sole discretion and in the manner that it determines to be the most advantageous to the State, engage a single firm to provide both sets of services (simultaneously acting as the State s Swap Monitor and Swap Consultant) or to engage a distinct Swap Monitor and a distinct Swap Consultant for each service, respectively (with two different firms entering into separate contracts, each to perform one of the requested services). Page 2 of 15

3 II. MINIMUM REQUIREMENTS The firm or its personnel must meet the following minimum requirements in order to be given consideration for selection: Swap Monitor: The firm or its personnel must have experience within the last three (3) years of accurately reporting and monitoring valuations and settlements of Swap portfolios of at least five (5) Swaps. Firms responding for this engagement must include a sample monthly valuation report and a sample Swap settlement reconciliation/payment verification spreadsheet model. Swap Consultant: The firm or its personnel must have experience providing consultant services in connection with Swaps, including interest rate swaps, interest rate caps, swaptions and other similar types of derivative agreements, for private sector clients and/or states and other governmental entities in connection with the execution, modification or termination of at least a combined $1 billion notional amount in such swaps and other derivative products during the last three (3) years. Failure of a firm to meet the minimum requirements for the respective roles will result in the proposal s immediate rejection. III. BACKGROUND Various independent authorities of the State, including, but not limited to, the New Jersey Transportation Trust Fund Authority, the New Jersey Building Authority, the New Jersey Educational Facilities Authority, the New Jersey Sports and Exposition Authority, and the New Jersey Economic Development Authority (collectively, the Independent Authorities ) issue Bonds from time to time, the debt service on which is paid by the State subject to annual appropriation, pursuant to either a contract or a lease with the Independent Authority. In connection with the issuance of Bonds, the Independent Authorities have entered into, and may continue to enter into, various types of Swap Agreements pursuant to which the Independent Authority may agree to make payments to a counterparty (the Counterparty ) for example: (i) a fixed rate of interest in exchange for the payment by the Counterparty to the Independent Authority of a variable rate of interest, (ii) a variable rate of interest in exchange for a fixed rate of interest, or (iii) a variable rate of interest based upon an index exchanged for a variable rate of interest based on another index. As used in this RFP, the term Swap includes interest rate exchange agreements and other similar agreements intended to manage or offset the risk inherent in such interest rate exchange agreements such as interest rate caps and collars. The State is seeking the services of a Swap Monitor to assist the State and its Independent Authorities in monitoring, managing, providing valuations of, and ensuring compliance with the Swap Agreements and to oversee the performance of the Counterparties. The State is also seeking the services of a Swap Consultant to assist the State and its Independent Authorities by providing general portfolio-related advice, and advice with respect to structuring, modifying or terminating existing and/or future Swap Agreements. Page 3 of 15

4 IV. SCOPE OF SERVICES Monitoring Services: The Swap Monitor will provide the following monitoring services to the State during the specified term of engagement: 1. Maintenance of Swap Portfolio Database The Swap Monitor will develop and maintain a Swap portfolio database for monitoring and reporting purposes. The database should include a summary of the types and terms of all Swap Agreements including a list of Counterparties and their credit ratings, outstanding notional amounts and payment schedules, average life of each agreement, any collateral requirements and/or thresholds, termination exposure, basis risk exposure, value of a basis point and remaining term of each trade. The database should also include a summary of any outstanding bonds associated with any trade and a per-trade history and current accounting and verification of settlements paid and received by the State and its Counterparties. 2. Monthly Reporting Requirements The Swap Monitor will be required to submit a monthly report as of the last day of each month on the state of the existing Swap portfolio. The report should include a list of Counterparties and their current credit ratings, notations of changes in credit ratings or Counterparty credit events (such as mergers, acquisitions and bankruptcies), aggregation of notional amount and exposure by Counterparty by dollar amount and percent, a combined outstanding notional value of the portfolio, and a mark-to-market valuation summary. The mark-to-market valuations should be identified for Swaps by issuer and by Counterparty and should include a brief description of the payer and receiver terms of the trade. The report should also contain a basis point stress test sensitivity analysis of +/- 100bps and +/- 200bps or whatever other sensitivity is agreed upon by the Swap Monitor and the State, and general market and derivative market commentary relevant to the month of the report. Lastly, the firm may be asked to include a monthly settlement summary for all trades where payments were made within the month of the report. The settlement summary section should identify the trade, the settlement period starting and ending dates, fixed and floating rates and payments made to and received from the Counterparty based on those rates and according to the calculations as set forth in the governing Swap documents. Page 4 of 15

5 3. Automatic Alert Requirements The Swap Monitor will be expected to provide alerts whenever applicable to advise the State of the following developments: a. Changes to the credit rating of any State Counterparty or any major credit event that occurs including, but not limited to, mergers, acquisitions and assignments. b. Material changes in mark-to-market valuation levels that would require collateral action or impact risk exposure. c. Mark-to-market valuations reaching a level at which State could advantageously terminate or restructure existing swaps. 4. Additional Services. From time to time, the State may request that the Swap Monitor provide services in connection with Swaps on debt not backed by the State s credit but issued by the Independent Authorities and other related State entities. In such instances, the Independent Authority shall retain the flexibility to negotiate a fee for the requested services or, if the Independent Authority prefers, to utilize the hourly fee schedule provided by the Swap Monitor in its fee proposal to compensate for such additional services. Additionally, from time to time, when necessary, the State reserves the right to request assistance or additional services from the Swap Monitor on any matters relating to the Swap portfolio that arise during the term of the engagement. In such instances, the State shall retain the flexibility to negotiate a fee for the additional services or utilize the hourly fee schedule provided by the Swap Monitor in its fee proposal. 5. Settlement Tracking The Swap Monitor may be required to maintain a database to track, calculate, verify, and report all fixed and floating Swap settlements including reset rates and day counts according to the terms of the trade confirmations. The Swap Monitor will be expected to demonstrate confirmation of the calculations of the Counterparty according to the payment advice received, and to report any discrepancies to the State on a weekly basis so as to correct any erroneous calculations. The Swap Monitor will, from time to time, be asked to provide a settlement history by trade, Counterparty, issuer or all of the above for a specified period of time made at the sole request of the State. Page 5 of 15

6 Consulting Services: The Swap Consultant will provide the following consulting services to the State during the specified term of engagement: 1. Monitoring and Updating Swap Policy The Swap Consultant, together with the State, will review the State s Swap policy on, at a minimum, an annual basis and the Swap Consultant shall make recommendations for changes to such policy to meet changing needs and circumstances in both the State s portfolio and the market. 2. Portfolio Analysis & Asset Management The Swap Consultant will be required to assess on a quarterly basis, the State s existing portfolio of Swaps and Bonds in order to provide recommendations to the State Treasurer regarding the appropriate balance and diversification of floating rate, synthetic fixed and fixed exposure taking full account of the State s assets and liabilities, rating agency, legal and regulatory requirements. During the term of the engagement, the Swap Consultant will be responsible for assessing the portfolio of Bonds and making recommendations to manage risk. To this end, the Swap Consultant should expect to advise the State on the effect of proposed Swaps and the risks and benefits of existing Swaps and to provide optimization scenarios upon request. 3. Ongoing Portfolio Feedback The Swap Consultant will be responsible for keeping the State informed of new products or swap opportunities that may be applicable to the State s portfolio, and for identifying and recommending any restructuring or optimization opportunities that exist portfolio-wide or within certain trades that may be to the State s advantage. The Swap Consultant will also be required, from time to time, to provide analyses of and feedback on, various solicited or unsolicited swap proposals and opportunities submitted to the State by banks, financial professionals and swap counterparties relating to bond transactions, program management or other opportunities. 4. Creation of Form Documents The Swap Consultant will be responsible for assisting the State and the Office of the Attorney General in updating, as necessary, the ISDA Master Agreement, Schedule and Credit Support Annex used by the State, which reflect the State s Swap policy and State legal requirements. It is anticipated these documents will be used for all Swaps which are entered into by the Independent Authorities in connection with State-backed Bonds. These documents may also be made available for the use of the Independent Authorities in their non-state backed related debt issuances. The Swap Consultant will be expected to recommend the appropriate provisions in such documentation including provisions relating to such major terms as collateralization, cross default, additional termination events and Page 6 of 15

7 calculation methods. Any recommendations of the Swap Consultant shall be subject to approval by the State and the Office of the Attorney General. During the term of engagement, the Swap Consultant shall make recommendations as needed to modify such documentation to meet changing requirements and circumstances. 5. Managing a List of Qualified Swap Providers The Swap Consultant will assist the State in maintaining a list of qualified swap providers. The Swap Consultant shall help maintain such list on an ongoing basis throughout the term of engagement. 6. Training and Support The Swap Consultant will be expected to assist in educating the staff of the State and the various Independent Authorities in the use of Swaps, on an as needed basis. Such training may consist of seminars, written materials and informal discussions. 7. State Disclosure The Swap Consultant will be expected to assist the State in drafting derivatives footnotes relating to Swap transactions to be included in the State s Comprehensive Annual Financial Report. Such assistance is expected to include appropriate analysis of Swaps to support compliance with GASB 53 reporting requirements. The Swap Consultant will be expected to assist in the preparation and review of disclosures relating to Swaps appearing in the State financial disclosure contained in the offering documents used by the State and the various Independent Authorities to sell their Bonds. 8. Accounting and GASB 53 Compliance The Swap Consultant will also be expected to advise and update the State on accounting and regulatory proposals regarding Swaps and other derivative instruments. 9. Additional Services From time to time, the State may request that the Swap Consultant provide services in connection with Swaps on debt not backed by the State but issued by the Independent Authorities and other related State-entities. In such instances, the Independent Authority shall retain the flexibility to negotiate a fee for the requested services or, if the Independent Authority prefers, to utilize the hourly fee schedule provided by the Swap Consultant in their fee proposal to compensate the Swap Consultant for such additional services. Page 7 of 15

8 Additionally, from time to time, when necessary, the State reserves the right to request assistance or additional services from the Swap Consultant on any matters relating to the Swap portfolio that arise during the term of the engagement. In such instances, the State shall retain the flexibility to negotiate a fee for the additional services or utilize the hourly fee schedule the Swap Consultant provided in its fee proposal. 10. Swap Termination Services The Swap Consultant will be required to assist with or handle, as applicable, all matters relating to swap terminations whenever applicable including, at a minimum: a. Review of documents relating to termination. b. Preparation of materials and presentation to the Independent Authority Boards for necessary approvals. c. Preparation of pricing models and execution of dry-run termination pricings with Counterparties, including agreement on mid-market levels. d. Negotiation of all-in spreads to mid-market price with Counterparties. e. Acting as liaison with market participants to determine and procure additional feedback on fair market price quotes for terminations. f. Execution of termination pricing with Counterparties. g. Development and delivery of a Fairness Opinion relating to the fair market value of any termination (an example of which is included as Attachment II). 11. Swap Restructuring Services The Swap Consultant will be required to assist with or handle, as applicable, all matters relating to swap restructurings whenever applicable including, at a minimum: a. Investigation, development and recommendation of optimal restructuring strategies and structures. b. Review of documents relating to proposed restructurings. c. Preparation of materials and presentation to the Independent Authority Boards for necessary approvals. d. Preparation of pricing models and execution of dry-run pricings with Counterparties, including agreement on mid-market levels. e. Negotiation of all-in spreads to mid-market price with Counterparties. f. Acting as liaison with market participants to determine and procure additional feedback on fair market price quotes. g. Execution of restructuring with Counterparties. h. Development and delivery of a Fairness Opinion(s) relating to the fair market value of any restructuring. Page 8 of 15

9 12. Swap Transaction Services A. The Swap Consultant will be required to assist with or handle, as applicable, all matters relating to new Swap transactions whenever applicable including, at a minimum, for competitively bid swaps: a. Investigation, development and recommendation of optimal Swap strategies and structures. b. Preparation of materials and presentation to the Independent Authority Boards for necessary approvals. c. Preparation of swap documents, term sheets and Requests for Bids in conjunction with the State and counsel. d. Solicitation of bids from all appropriate and qualified dealers and providers. e. Reception of Counterparties bids at bid time. f. Review and evaluate bids, and make recommendations to accept or reject Counterparties bids. g. Preparation of analysis and presentation of the utilized swap strategy to the State, Independent Authorities or other stakeholders. B. The Swap Consultant will be required to assist with or handle, as applicable, all matters relating to new Swap transactions whenever applicable including, at a minimum, for negotiated Swaps: a. Investigation, development and recommendation of optimal Swap strategies and structures. b. Preparation of materials and presentation to the Independent Authority Boards for necessary approvals. c. Negotiation of terms in conjunction with Counterparty, the State and counsel. d. Make recommendation to accept or reject terms received. e. Preparation of swap documents in conjunction with counsel. f. Preparation of analysis and presentation of the utilized swap strategy to the State, Independent Authorities or other stakeholders. g. Development and delivery of a Fairness Opinion(s) relating to the fair market value of any new swap or swap related product. V. TERM OF ENGAGEMENT The Swap Monitor and the Swap Consultant, whether it be one firm or two different firms, will be engaged for a term of one (1) year with the option by the State, in its sole discretion, to renew for two (2) additional terms of one (1) year each. VI. REQUIRED COMPONENTS OF THE PROPOSAL Each firm submitting a proposal must follow the instructions contained in this RFP in preparing and submitting its proposal(s). The proposing firm is advised to thoroughly read and follow all instructions. A proposal must contain all of the information in the order and format indicated below. Firms responding for consideration for both engagements should submit separate proposals for each service according to the instructions Page 9 of 15

10 contained in this RFP. Submissions for each engagement will be reviewed independently. All terms and conditions set forth in this RFP will be deemed to be incorporated by reference in their entirety into the proposal. Proposals should be responsive to each of the following requests in the order indicated. Proposals should not exceed fifteen (15) pages plus appendices and cover letter. A. Minimum Requirements Explicitly state how your firm or its personnel meets the respective minimum requirements described under Section II. MINIMUM REQUIREMENTS, above for each engagement for which you are responding. Identify the governmental or private entity(ies) for which you provided these services, the notional amount of transactions for which you provided the services, the type of interest rate contracts to which these notional amounts apply (i.e. fixed payer, swaptions, basis swaps etc.) and the date(s) which you provided these services. B. Conflicts of Interest Identify any existing or potential conflicts of interest, as well as your representation of parties or other relationships that might be considered a conflict of interest, that may affect or involve this engagement or the State of New Jersey. C. Experience and Personnel 1) An executive summary of not more than three (3) pages identifying and substantiating the basis of your contention that you are the best qualified firm to provide the requested services to the State. Please address what your firm offers to the State that competing firms cannot. 2) A staffing plan listing those persons who will be assigned to the engagement(s) if your firm is selected, including the designation of the person(s) who would be the State s primary contact for the engagement(s). This portion of the proposal should include the relevant resume information for the individuals who would be assigned. This information should include, at a minimum, a description of the person s relevant professional experience, years and type of experience, and number of years with the firm. 3) A description of the firm s experience or the experience of relevant personnel in conducting portfolio reviews and/or consulting of the type described in this proposal, for both private and public entities. 4) A description of resources of the firm including, but not limited to, background, location, experience, staff resources, financial resources, technical and software resources, etc. Firms responding for the Swap Monitor engagement should specify what, if any, internet-based service they offer for real-time reporting or settlement tracking. Page 10 of 15

11 5) A listing of all current clients, both private and public, including information on the type of engagement. 6) Four references, including at least three clients for whom services have been provided in the last three years. Provide the contact names, positions, phone numbers and addresses. 7) If your firm, or any principal, director, officer or any other personnel (current or former) thereof, is now or has in the last 3 years been a defendant in any litigation involving a sum of $100,000 or more, the subject of any professional disciplinary action, and/or is or has been the subject of any investigation, you must provide a description of the litigation, disciplinary action or investigation and a current status report (regardless of whether the matter is concluded or in progress). 8) Preparer s Information: Provide the name and address of the firm, the name, telephone number, fax number, and address of individual or individuals responsible for the preparation of the proposal(s) who may be contacted in the event of questions or notification, and the location of the office, if other than that shown above, at which the services to be provided hereunder will be performed. D. Fees Firms are requested to submit their fee proposals in the form of the Price Schedules included as Attachment III. Fee proposals should reflect the firm s complete understanding of the Section IV, Scope of Services, as described above for each respective engagement. Firms submitting a proposal for only one of the engagements should be sure to submit their fee proposal on only the relevant Price Schedule included in Attachment III. Firms submitting proposals for both engagements should complete each Price Schedule for consideration separately and include only the relevant schedule in each respective proposal. When considering fee proposals, firms should take into consideration the size and makeup of the State s existing portfolio and any volume discounts that may apply based upon its size and any discounts that may be based upon the award of both engagements. Firms may be asked to state such discounts in a subsequent best and final offer request. Payment shall be based upon receipt of invoices and supporting documentation detailing the actual allowable direct and indirect costs incurred for such services: provided, however, that the maximum amount to be paid for services under this engagement shall not exceed the applicable maximum not-to-exceed price or the specified fee, where applicable. Hourly fees should be spelled out in detail, and clearly described in a way that allows restatement of these fees in a contract, if the proposal is accepted. The State reserves the right to negotiate final price with the vendor(s) selected to perform these services. E. State Presence: Describe your firm s presence in New Jersey. Page 11 of 15

12 VII. PROPOSAL SUBMISSION An original and six (6) copies (including an electronic format copy on CD) of each proposal must be marked for the appropriate engagement as RFP FOR SWAP MONITOR SERVICES or RFP FOR SWAP CONSULTANT SERVICES and sent to: Overnight Mail State of New Jersey Dept. of the Treasury, Office of Public Finance 50 West State Street, 5 th Floor Trenton, NJ Attn: David K. Moore, Senior Manager PROPOSALS MUST BE RECEIVED BY 4 P.M. EASTERN STANDARD TIME, FEBRUARY 8, FACSIMILE AND/OR ELECTRONIC MAIL SUBMISSIONS WILL NOT BE ACCEPTED. No fax or proposals will be accepted. Proposals received after the time and date listed above will not be considered. Communications with representatives of the State or its Independent Authorities concerning this request by you or on your behalf are NOT permitted during the submission and selection processes, except as specifically indicated below. No telephone inquiries will be accepted. Failure to adhere to this communication restriction will result in rejection of your proposal. If you require clarification of any aspect of this RFP, forward the request in writing via by February 1, 2011 to: RFQresponses@treas.state.nj.us. All Questions and Answers will be posted on the following website on or about February 3, The State will not be responsible for any expenses in the preparation and/or presentation of the proposal(s) and oral interviews or for the disclosure of any information or material received in connection with the solicitation, whether by negligence or otherwise. The State reserves the right to reject any and all proposals, with or without cause, and waive any irregularities or informalities in the proposals. The State further reserves the right to make such investigations as it deems necessary as to the qualifications of any and all firms submitting proposals. In the event that all proposals are rejected, the State reserves the right to re-solicit proposals. Responding firms may withdraw their proposal(s) at any time prior to the filing date and time by written notification signed by an authorized agent of the firm. The proposal(s) may thereafter be resubmitted, but only up to the final filing date and time. The responding firm assumes sole responsibility for the complete effort required in this RFP. No special consideration shall be given after proposals are opened because of a firm s failure Page 12 of 15

13 to be knowledgeable about all the requirements of this RFP. By submitting a proposal in response to this RFP, the firm represents that it has satisfied itself, from its own investigation, of all the requirements of this RFP. All documents/information submitted in response to this solicitation shall be available to the general public as required by applicable law, including the New Jersey Open Public Records Act, N.J.S.A. 47:1A-1 et seq. VIII. ORAL INTERVIEW While the State does not anticipate requiring oral presentations, it reserves the right to do so, in person or by telephone. Proposals should be complete on their face. The State reserves the right to request clarifying information subsequent to submission of the proposals. IX. SELECTION PROCESS A. All proposals will be reviewed to determine responsiveness. Non-responsive proposals will be rejected without evaluation. B. An evaluation committee will review and score each proposal received that meets the Minimum Requirements set forth in Section II, pursuant to the criteria specified below. C. The criteria used to evaluate responsive proposals shall include, but not be limited to, expertise, capacity, experience, fees and personnel and may include the evaluation criteria as developed by the State as part of the evaluation process based on the categories listed below, or some combination thereof. Such criteria are not necessarily listed in order of significance. The evaluation criteria categories may be used to develop more detailed evaluation criteria to be used in the evaluation process: 1) The firm s general approach and plans in meeting the requirements of this RFP. 2) The firm s detailed approach and plans to perform the services required by the Scope of Services contained in this RFP. 3) The firm s documented experience in successfully completing contracts of a similar size and scope to those required by this RFP. 4) The qualifications and experience of the firm s management, supervisory or other key personnel assigned to the engagement, with emphasis on documented experience in successfully completing work on contracts of similar size and scope to the services required by this RFP. 5) The overall ability of the firm to mobilize, undertake and successfully complete the services required by this RFP. This judgment will include, but not be limited to, the following factors: the number and qualifications of management, supervisory and other staff proposed by the firm to perform the services required by this RFP; the availability and commitment to the Page 13 of 15

14 engagement of the firm s management, supervisory and other staff proposed; the firm s contract management plan, including the firm s contract organizational chart. D. The State shall select the firm by written notice to that responsible bidder whose proposal, conforming to the RFP, will be the most advantageous to the State, price and other factors considered. X. STATUTORY REQUIREMENTS A. The following documents must be completed, included and submitted with the bid proposal. All forms listed below can be downloaded from the Department of the Treasury website at: Standard Terms and Conditions Ownership Disclosure Disclosure of Investigations and Actions Involving Bidder MacBride Principles Affirmative Action Employee Information Report Set Off for State Tax Source Disclosure Certification Form NOTE: A copy of a valid New Jersey business registration must be submitted. If not already registered with the New Jersey Division of Revenue, registration can be complete online at the Division of Revenue website: B. Specific Statutory Requirements 1. Chapter 51 and Executive Order 117. Pursuant to Public Law 2005, Chapter 51 ( Chapter 51 ) and Executive Order No. 117 (Corzine 2008) ( Executive Order 117), State departments, agencies and authorities are precluded from awarding contracts exceeding $17,500 to vendors who make certain political contributions on and after October 15, 2004, to avoid any appearance that the selection of contracts is based on the contractors political contributions. Chapter 51 also requires the disclosure of all contributions to any political organization organized under 26 U.S.C. 527 that also meets the definition of a Continuing political committee within the meaning of N.J.S.A. 19:44A-3(n) and N.J.A.C. 19: Failure to submit the certification and disclosure form(s) shall be cause for rejection of your firm s proposal. Please consult: Website: Instructions: The firm or firms selected pursuant to this RFP shall be required to maintain compliance with Chapter 51 and Executive Order 117 during the term of its or their engagement. Page 14 of 15

15 2. Chapter 271. Pursuant to Public Law 2005, Chapter 271 ( Chapter 271 ), your firm is required to disclose its (and its principals ) political contributions within the immediately preceding twelve (12) month period prior to entering into a contract. No prospective firm will be precluded from entering a contract with the State by virtue of the information provided in the Chapter 271 disclosure provided the form is fully and accurately completed. Prior to award of this engagement, the firm selected pursuant to this RFP shall be required to submit Chapter 271 disclosures. Please refer to for a copy of the Chapter 271 disclosure form. It is not required to be completed in connection with the submission of your proposal. If selected pursuant to this RFP, please also be advised of your firm s responsibility to file an annual disclosure statement on political contributions with the New Jersey Election Law Enforcement Commission (ELEC) pursuant to N.J.S.A. 19:44A (P.L. 2005, c. 271, section 3) if your firm receives contracts in excess of $50,000 from a public entity during a calendar year. It is your firm s responsibility to determine if filing is necessary. Failure to so file can result in the imposition of financial penalties by ELEC. Additional information about this requirement is available from ELEC at (888) or 3. Chapter 92. In accordance with Public Law 2005, Chapter 92, all services performed pursuant to this engagement shall be performed within the United States of America. Page 15 of 15

16 ATTACHMENT I

17 ATTACHMENT I NJEDA School Facilities Construction Program Counterparty Outstanding Notional Effective Termination Fixed Floating Amount Date Date Rate Index Variable-to-Fixed Swaps Bank of America, N.A. $196,965,834 9/1/2006 9/1/ % 71.98% 1-Month LIBOR Bank of Montreal 250,000,000 11/1/2009 9/1/2034 * * Deutsche Bank AG - New York Branch 10,020,000 11/1/ /1/ % 75% 1-Month LIBOR+5.25 bps Goldman Sachs Mitsui Marine Derivative Products, L.P. Goldman Sachs Mitsui Marine Derivative Products, L.P. Goldman Sachs Mitsui Marine Derivative Products, L.P. IXIS Financial Products, Inc. 78,167,500 93,187, ,069, ,200,000 3/1/2006 9/1/2006 9/1/ /1/2008 3/1/2031 9/1/2031 9/1/2032 9/1/ % 4.41% 4.40% 4.49% 70.8% 1-Month LIBOR 71.98% 1-Month LIBOR 71.57% 1-Month LIBOR 62% 1-Month LIBOR+40 bps Merrill Lynch Capital Services, Inc. 500,000,000 5/1/2010 3/1/ % 62% 1-Month LIBOR+40 bps Royal Bank of Canada 150,073,333 5/1/2009 3/1/ % 62% 1-Month LIBOR+40 bps UBS AG, Stamford Branch 64,322,500 9/1/2004 9/1/ % 71.13% 1-Month LIBOR UBS AG, Stamford Branch 74,572,500 3/1/2005 3/1/ % 74.24% 1-Month LIBOR UBS AG, Stamford Branch 116,097,500 9/1/2007 9/1/ % 71.57% 1-Month LIBOR Wachovia Bank, N.A. 172,310,000 9/1/2004 9/1/ % 71.13% 1-Month LIBOR Wachovia Bank, N.A. 223,417,500 3/1/2005 3/1/ % 74.24% 1-Month LIBOR Wachovia Bank, N.A. 179,042,500 3/1/2006 3/1/ % 70.8% 1-Month LIBOR Fixed-to-Variable Swaps UBS AG, Stamford Branch $380,515,000 5/1/2008 9/1/ % 75% 1-Month LIBOR *From 11/01/09 to 11/01/12, the Bank of Montreal Swap Agreement has a fixed rate of % and has no floating receipts or payments. From 11/01/12 to 09/01/2034, the fixed rate is % and the floating index is 62% 1-Month LIBOR + 40 bps. NJ Building Authority Counterparty Outstanding Notional Amount Effective Date Termination Fixed Floating Date Rate Index Variable-to-Fixed Swaps Citibank $72,095,000 8/20/2003 6/15/ % 62% 1-Month LIBOR+20 bps Citibank 30,895,000 8/21/2003 6/15/ % 62% 1-Month LIBOR+20 bps Goldman Sachs Mitsui Marine Derivative Products, L.P. 24,025,000 8/20/2003 6/15/ % 62% 1-Month LIBOR+20 bps Goldman Sachs Mitsui Marine Derivative Products, L.P. 10,305,000 8/20/2003 6/15/ % 62% 1-Month LIBOR+20 bps Morgan Stanley 24,025,000 8/20/2003 6/15/ % 62% 1-Month LIBOR+20 bps Morgan Stanley 10,305,000 8/20/2003 6/15/ % 62% 1-Month LIBOR+20 bps NJ Transportation Trust Fund Counterparty Outstanding Notional Effective Termination Fixed Floating Amount Date Date** Rate Index Variable-to-Fixed Swaps Goldman Sachs Mitsui Marine Derivative Products, L.P. $85,000,000 1/30/ /15/ % 67% 1-Month LIBOR Goldman Sachs Mitsui Marine Derivative Products, L.P. 50,000,000 1/30/ /15/ % 67% 1-Month LIBOR Goldman Sachs Mitsui Marine Derivative Products, L.P. 85,000,000 1/30/ /15/ % 67% 1-Month LIBOR Goldman Sachs Mitsui Marine Derivative Products, L.P. 62,500,000 1/30/ /15/ % 67% 1-Month LIBOR Goldman Sachs Mitsui Marine Derivative Products, L.P. 62,500,000 1/30/ /15/ % 67% 1-Month LIBOR **The NJTTFA may terminate and cancel any or all of its existing Swap Agreements with no payment due from the NJTTFA at any time on or after December 15, 2011.

18 ATTACHMENT II

19

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21 ATTACHMENT III

22 NAME OF FIRM: DATE: SIGNATURE: State of New Jersey Request for Proposals Price Schedule Swap Monitor Services ANNUAL FEE CAP FOR MONITORING SERVICES # s 1-4 as described in Section IV Scope of Services Monitoring Services Firm s Maximum Not-to-Exceed Price Cap for Initial One-Year Term *: Firm s Maximum Not-to-Exceed Price Cap for 1st Renewal Year **: Firm s Maximum Not-to-Exceed Price Cap for 2nd Renewal Year **: ANNUAL FEE CAP FOR MONITORING SERVICE # 5 As described in Section IV Scope of Services Monitoring Services Firm s Maximum Not-to-Exceed Price Cap for Initial One-Year Term *: Firm s Maximum Not-to-Exceed Price Cap for 1st Renewal Year **: Firm s Maximum Not-to-Exceed Price Cap for 2nd Renewal Year **: ALL-IN ANNUAL FEE CAP MONITORING SCOPE OF SERIVICE # 1-5 as described in Section IV Scope of Services - Monitoring Services Firm s Maximum Not-to-Exceed Price Cap for Initial One-Year Term *: Firm s Maximum Not-to-Exceed Price Cap for 1st Renewal Year **: Firm s Maximum Not-to-Exceed Price Cap for 2nd Renewal Year **: FULLY-LOADED HOURLY RATES *** Managing Director (or equivalent): Vice President (or equivalent): Assistant Vice President (or equivalent): Analyst (or equivalent): * The maximum not-to-exceed price should be based on the fully-loaded hourly billing rates of relevant personnel. ** The firm should submit a maximum not-to-exceed price cap for both optional renewal years. The State makes no guarantee that such option will exercised. The maximum not-to-exceed price should be based on the fully-loaded hourly billing rates of relevant personnel. *** Hourly fees should be based on fully-loaded billing rates of personnel who will be assigned to the engagement and therefore, should include expenses.

23 NAME OF FIRM: DATE: SIGNATURE: State of New Jersey Request for Proposals Price Schedule Swap Consultant Services ANNUAL FEE CAP FOR CONSULTING SERVICES # s 1-9 as described in Section IV Scope of Services Consulting Services Firm s Maximum Not-to-Exceed Price Cap for Initial One-Year Term *: Firm s Maximum Not-to-Exceed Price Cap for 1st Renewal Year **: Firm s Maximum Not-to-Exceed Price Cap for 2nd Renewal Year **: ANNUAL FEE CAP FOR CONSULTING SERVICE # 10 As described in Section IV Scope of Services Consulting Services Firm s Maximum Not-to-Exceed Price Cap for one (1) Transaction *: ANNUAL FEE CAP FOR CONSULTING SERVICE # 11 As described in Section IV Scope of Services Consulting Services Firm s Maximum Not-to-Exceed Price Cap for one (1) Transaction *: ANNUAL FEE CAP FOR CONSULTING SERVICE # 12 As described in Section IV Scope of Services Consulting Services Firm s Maximum Not-to-Exceed Price Cap for one (1) Transaction *: FULLY-LOADED HOURLY RATES *** Managing Director (or equivalent): Vice President (or equivalent): Assistant Vice President (or equivalent): Analyst (or equivalent): * The maximum not-to-exceed price should be based on the fully-loaded hourly billing rates of relevant personnel. ** The firm should submit a maximum not-to-exceed price cap for both optional renewal years. The State makes no guarantee that such option will exercised. The maximum not-to-exceed price should be based on the fully-loaded hourly billing rates of relevant personnel. *** Hourly fees should be based on fully-loaded billing rates of personnel who will be assigned to the engagement and therefore, should include expenses.