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SALE TERMS AND Variability of Issue Size: A specific provision in the sale terms permits modifications to the <br />MARKETING:issue size and/or maturity structure to customize the issue once the price and interest rates <br /> <br />are set on the day of sale. <br />Prepayment Provisions: <br />Series 2016A Bonds maturing on or after February 1, 2026 will be subject to <br /> <br />optional redemption on February 1, 2025 and any date thereafter, at a price of par <br />plus accrued interest. <br />Based on the short duration of the Series 2016B Bonds, and to avoid possible <br /> <br />negative pricing impacts, the Series 2016B Bonds will not be subject to redemption <br />prior to their stated maturities. <br />Bank Qualification: <br />The City does not expect to issue more than $10 million in tax-exempt obligations <br /> <br />that count against the $10 million limit for this calendar year; therefore, the Series <br />2016A Bonds are designated as bank qualified. <br />The Series 2016B Bonds will refund an issue that is not bank qualified and therefore <br /> <br />the Series 2016B Bonds will not be designated as bank qualfied. <br />RISKS/SPECIAL The outcome of this financing will rely on the market conditions at the time of the sale. Any <br />CONSIDERATION:projections included herein are estimates based on current market conditions. <br /> <br />SUPPLEMENTAL Supplementary information will be available to staff including detailed terms and conditions of <br />sale, comprehensive structuring schedules and information to assist in meeting post- <br />INFORMATION <br />issuance compliance responsibilities. <br />AND <br />BOND RECORD: <br />Upon completion of the financing, a bond record will be provided that contains pertinent <br />documents and final debt service calculations for the transaction. <br /> <br />$10,000,000 Electric Revenue Bonds, Series 2016A <br /> <br />Description of Issue <br />PURPOSE:buy-in to become a <br /> <br />member of the Minnesota Municipal Power . The City and the MMPA <br />will execute a Power Sales Agreement under which the City will purchase electric power and <br />energy from the MMPA from and after October 1 2018. The City agrees to a buy in equal to <br />120% of its proportionate share of the net position (equity) and related rate accruals of <br />MMPA through an agreed upon formula. The amount of the buy in will be at least <br />$10,000,000 and will be determined in 2018. At that time, any additional amounts owed may <br />result in additional bonds. <br />We have attached the buy-in analysis bership prepared by the MMPA. <br /> <br /> <br /> <br />Page 4 <br />