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OCII approves consent items and selects underwriters for 2014 refunding bonds
Summary
The Commission approved consent items including minutes and a legal-services contract amendment, and selected underwriting teams for series 2014 refunding tax-allocation bonds; Chair Rosales recused on the underwriting vote due to a law-firm relationship.
At its regular meeting the Commission approved routine consent items and took a financing step toward refunding outstanding tax-allocation bonds. The consent calendar included approval of the minutes from the September 12, 2014 special meeting and authorization of a fifth amendment to the legal services contract with Schutte, Mahali and Weinberger LLP to increase the contract by $350,000 for a new aggregate amount not to exceed $1,600,000 for specialized legal services related to Candlestick Point and Hunters Point Shipyard Phase 2 (Action Resolution No. 85 2014). Those consent items passed by roll call.
On financing, staff brought forward a recommended underwriting team for the series 2014 tax allocation refunding bonds (anticipated to issue in two series: a taxable 2014B and a tax-exempt 2014C). After an RFP and selection-panel review, the panel recommended Piper Jaffray as managing underwriter for the 2014B taxable series with Stifel Nicholas and Stinson Securities as co-managers; Backstrom McCarley & Co. was recommended as managing underwriter for the 2014C series with Stifel and Blaylock Bealvan as co-managers. The Department of Finance review and issuance timeline were described; staff anticipates a preliminary official statement for Commission approval in November, DOF approval later in November, pricing in early December and a closing by the end of December if market conditions permit.
Chair Rosales recused herself from the underwriting item because of a prior revenue relationship between her law firm and one of the proposed managing underwriters; she left the room for the discussion and vote. The selection passed with three ayes and one recusal. Staff estimated the full refunding authorization could be up to $300 million (staff noted the actual refunded amount will depend on market conditions); a rough split cited in the presentation was about $200 million tax-exempt and $100 million taxable if the full authorization is used.
