Rowan County, North Carolina (the “County”) desires to enter into an Installment Financing Agreement (the “Agreement”) pursuant to N.C.G.S. §160A-20 in the principal amount of $27,500,000 for the purpose of financing the cost of the Project described below. The County is soliciting your proposal to provide the necessary financing for this Project, subject to the terms and conditions set forth in this Request for Proposal.
A) Pertinent Information
The Project consists of the acquisition, construction and equipping of the West Area Elementary School and other improvements for the Rowan-Salisbury School System (the “Project”).
The County is currently rated Aa2 by Moody’s Investors Service, AA+ by Fitch Ratings and AA- by Standard & Poor’s Ratings Service. There will not be any ratings assigned to the Agreement.
Rowan County’s historical audited information may be found at the following link:
https://www.rowancountync.gov/Archive.aspx?AMID=47
The financing will NOT be bank qualified under Section 265 of the Internal Revenue Code of 1986.
The County expects to obtain Local Government Commission approval of the Agreement on August 1, 2017 and close on August 3, 2017.
First Tryon Advisors will serve as financial advisor for this transaction.
McGuireWoods LLP will serve as bond counsel and will prepare all legal documentation for the Agreement. At closing, Bond Counsel will deliver to the successful bidder the tax-exempt opinion of the Agreement.
B) Contract Specifications
1) The Project cost is $27,834,492, of which the County will be financing $27,500,000.
2) The desired term of the financing is fifteen (15) years. The County may consider proposals for shorter fixed terms.
3) Installment payments are to be made semiannually in arrears with the first payment due on March 1, 2018. The amortization will be structured as interest only through March 1, 2019 and level principal thereafter with semiannual principal payments beginning September 1, 2019.
4) The interest rate shall be fixed for the term and will not be subject to adjustment due to changes in tax code or bank capital requirements.
5) The interest rate proposed must be guaranteed for at least sixty (60) days.
6) While the County desires prepayment of principal at any time without penalty, other prepayment terms may be considered and will be subject to negotiation.
7) The County’s obligations under the Agreement will be secured by a deed of trust or security interest in all or a portion of the Project being financed as negotiated between the County and the successful bidder. No deficiency judgment may be rendered against the County for breach of a contractual obligation under the Agreement, and the taxing power of the County will not be pledged to secure repayment thereunder.
8) The Agreement must not contain a non-substitution clause and there must be a non-appropriation clause in the Agreement.
9) By submitting a bid in response to this proposal, each bidder acknowledges and represents to the County and to First Tryon Advisors that (1) no official statement or other offering material will be furnished other than this proposal; (2) the bidder has knowledge and experience in financial and business matters and that it is capable of evaluating the merits and risks of making the commercial loan to be evidenced by the Agreement and is financially able to bear the economic risk of holding the Agreement; (3) no CUSIP number will be obtained for the Agreement; and (4) the bidder intends to acquire the Agreement solely for its own account as a vehicle for making a commercial loan and with no present intention to distribute or resale the Agreement or any portion thereof.
C) Submission of Proposal
To be considered, a bid must be received by 10:00 am on July 12, 2017. Email submission of your proposal with “RSS New Elementary School” as the subject line is preferred and should be sent to the following individuals:
Leslie Heidrick Leslie.Heidrick@rowancountync.gov
Derrick Atkins derrick.atkins@rowancountync.gov
Amy Vitner avitner@firsttryon.com
Sara Langley slangley@firsttryon.com
Mary Nash Rusher MNRusher@mcguirewoods.com
Proposals must specify at a minimum the following information:
1) The proposed interest rate for a 15-year term and/or other alternative fixed term that assumes interest only semiannual payments beginning March 1, 2018 and semiannual level principal payments beginning September 1, 2019. Please attach a sample debt service schedule with a loan date of August 3, 2017.
2) A list of all additional costs to be associated with this transaction, including origination or placement fees, escrow fees, counsel fees and expenses. State whether or not any of such fees or expenses will be capped.
3) A statement to the effect that the bank agrees to the contract specifications set forth in Part B of this Request for Proposal.
4) Proposed collateral to secure financing and the method for creating the lien or security interest in such collateral.
5) Bids should be based on gross funding of the Project (without consideration of investment earnings).
The County reserves the right to request additional information from the bidders and reserves the right to reject all proposals and to waive any irregularity or informality. Although the selection will be based substantially on lowest total financing cost (including both interest cost and upfront fees and expenses), the County reserves the right to select the bidder that best meets the needs of the County.
If further information is needed or if you have any questions regarding this Request for Proposal, please contact Amy Vitner at avitner@firsttryon.com 704-926-2457.
Thank you in advance for your consideration of this proposal.
Sincerely,
Leslie E. Heidrick
Assistant County Manager/Finance Director
June 28, 2017