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Idaho Public Financeand Market Update
Cameron Arial, Vice PresidentZIONS BANK Public Finance
208.501.7481Cameron.Arial@zionsbank.com
March 2015
1
Financial Participants – Role of a Municipal Advisor
Finance Process Idaho and Utah Public Finance Comparative
AnalysisCity of Pocatello – Competitive Sale ProcessMarket Update
Introduction
2
Participants in Issuing Municipal Bonds
3
Role of a Municipal Advisor – Your Advocate throughout the Financing Process Municipal Consulting* Financial Feasibility* Bond Elections*
Community Involvement* Needs Assessment Advice*
Tax Impact Analysis Official Statements Rating Advice and Presentations Bond Sales Continuing Disclosure* Ongoing Advice and Debt Management
Municipal Advisor Video:https://www.youtube.com/watch?v=exu3quq7cOg
* To our knowledge Zions Bank Public Finance is the only firm in Idaho that provides these services.
Finance Process
5
Finance Process
Source: Zions Bank Public Finance
Idaho and Utah Public Finance Comparative Analysis
How Does It Impact Economic Development?
7
Financing Tool State Authorization Security/Collateral Repayment Types of Projects
General Obligation Bond
Utah 50% vote Ad valorem property taxes Property tax or other available revenues Many public projectsIdaho 66.67% vote
Revenue Bond Utah Authorization of governing body
Revenues from water, sewer, electric, or other enterprise funds
Revenues from water, sewer, electric, or other enterprise funds
Projects related to the revenue source being pledgedIdaho 50% vote
Tax Increment Bond
Utah Authorization of governing body
Tax increment from increased property value
Tax increment or other revenue
Water, sewer, road, and other infrastructure
IdahoAuthorization of governing body and possibly judicial confirmation
Equipment, fixtures, and real property
Special Assessment/Local Improvement District Bond
Utah Authorization of City Council; <40% protest rate
Property within assessment area
Special assessment levied against property owners
Public projects and infrastructureIdaho
60% vote of property owners or 1/2 plus one vote of City Council
Certificates of Participation****
Utah Authorization of governing body Financed improvements General fund or other
revenuesEquipment, fixtures, and real propertyIdaho Judicial confirmation
Excise Tax/Local Option Tax Revenue Bond
Utah Authorization of City CouncilRevenues - sales tax, class C road tax, franchise, other excise taxes
Excise tax revenues or other available general fund revenues Roads and other public
projectsIdaho
Resort Cities only. 60% vote to levy tax; 50% vote to borrow against tax
Revenues from local option taxes
Revenues from local option taxes
Lease Revenue Bonds/Lease Purchase Agreements****
Utah Authorization of City Council and LBA Board
Financed equipment and improvements
Annually appropriated general fund or other revenues
Equipment, fixtures, and real property
IdahoAuthorization of governing body and possibly judicial confirmation
**** Idaho market is limited due to unresolved legal questions
Utah and Idaho Public Finance Options
Source: Utah and Idaho State Statutes
8
Utah and Idaho Credit Ratings
Utah AAA Rated Credits Idaho AAA Rated CreditsState of Utah NoneSalt Lake CountySalt Lake CityWeber CountyDavis CountyJordan School District (South SL)
Source: Utah and Idaho State Statues; Moody's, S&P, and Fitch Rating Agencies
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State Ratings Map
Source: Wells Fargo Securities
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Idaho SD Rating Movements 2010 -2013
Source: Moody’s Investor Services
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Utah SD Rating Movements 2010 -2013
Source: Moody’s Investor Services
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Idaho and Utah Issuance Comparison
Idaho UtahYear Volume # Issues Population /Capita Volume # Issues Population /Capita2004 374,000 51 1,391 269 2,435,600 129 2,469 9862005 918,500 55 1,425 645 2,523,500 121 2,547 9912006 1,031,900 47 1,464 705 2,294,000 97 2,615 8772007 1,268,900 74 1,499 846 2,539,100 114 2,700 9402008 1,099,100 41 1,527 720 3,286,000 96 2,758 1,1912009 724,900 24 1,545 469 4,274,400 116 2,765 1,5462010 764,500 44 1,567 488 3,618,900 126 2,775 1,3042011 517,300 32 1,583 327 2,548,600 73 2,814 9062012 886,700 48 1,595 556 3,118,300 84 2,855 1,0922013 221,800 20 1,612 138 2,147,700 80 2,900 741
TOTAL 7,807,600 436 516 28,786,100 1,036 1,057
Source: Bond Buyer Yearbooks 2003-2013, U.S. Census Bureau
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Total Volume 10 Year Trend
Source: Bond Buyer Yearbooks 2004-2013
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Debt
Issu
ed P
er C
apita
Long-Term Bonds Issued Per CapitaIdaho Utah
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Bond Issuance by Category
Source: Bond Buyer Yearbooks 2004-2013
-
50
100
150
200
250
300
350
Development Education Electrical Environment Health Housing Public Transportation Utilities
Per Capita Average Annual Bond Issuance by CategoryIdaho Utah
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Education 10 Year Trend
Source: Bond Buyer Yearbooks 2004-2013
0
100
200
300
400
500
600
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Debt
Issu
ed P
er C
apita
Education Bonds Issued Per CapitaIdaho Utah
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Utilities 10 Year Trend
Source: Bond Buyer Yearbooks 2004-2013
0
50
100
150
200
250
300
350
400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Debt
Issu
ed P
er C
apita
Utility Bonds Issued Per CapitaIdaho Utah
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Transportation 10 Year Trend
Source: Bond Buyer Yearbooks 2004-2013
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Debt
Issu
ed P
er C
apita
Transportation Bonds Issued Per CapitaIdaho Utah
City of PocatelloCompetitive Sale
Joyce Stroschein
19
Competitive Sale Results – Pocatello
Source: Ipreo, Bid Results, 2/17/2015
$22,315,000 Pocatello / IBBA Series 2015A Revenue BondsCompetitive Bid Comparison
Bidder Bid TIC Final TIC Total P&I vs. Winning Bid1 Robert W. Baird & Co., Inc. 2.939% 2.935% 31,705,793.42 - 2 Janney Montgomery Scott LLC 3.049% 3.092% 32,236,511.49 530,718.07 3 JP Morgan Securities LLC 3.073% 3.349% 33,106,867.36 1,401,073.94 4 Hutchinson, Schockey, Erley & Co. 3.100% 3.106% 32,281,662.50 575,869.08 5 Citigroup Global Markets, Inc. 3.179% 3.222% 32,658,347.22 952,553.80 6 UBS Financial Services, Inc. 3.200% 3.213% 32,638,050.35 932,256.93
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The Idaho Bond Bank Authority (IBBA) is a pooled borrowing program managed through the Idaho State Treasurer’s Office.
Video: http://www.youtube.com/watch?v=5z2PaDSOkp0 Lower up-front issuance costs – Pooled issue Lower interest rates – Backed by the State’s sales tax
rated “Aa1” Streamlined process - Reduce staff time Increased Marketability - Size, Competitive sale
The IBBA is currently on hiatus and will be available again for an August issuance (May 31 Application Deadline).
Idaho Bond Bank Overview
Market Update
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Market Update – 20 Year Bond Buyer Index
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)
Date
BBI on 03/19/15
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Market OutlookMunicipal Market Outlook
March 19, 2015RATE DATA
Today Week Prior Month Prior Year Prior
MMD AAA GO
3 Year 0.79 0.91 0.74 0.52
5 Year 1.21 1.38 1.16 1.13
10 Year 1.97 2.14 2.08 2.49
15 Year 2.43 2.58 2.52 3.08
20 Year 2.64 2.78 2.73 3.46
30 Year 2.77 2.94 2.88 3.74
US Treasury
2 Year 0.63 0.67 0.62 0.47
5 Year 1.48 1.59 1.52 1.75
10 Year 1.98 2.10 2.07 2.78
30 Year 2.54 2.69 2.7 3.66
Federal Funds 0.12 0.11 0.12 0.08
Prime Rate 3.25 3.25 3.25 3.25
SIFMA 7 Day 0.02 0.02 0.02 0.06
BOND BUYER AND SHORT TERM INDEXES20 Bond GO1 3.52 3.62 3.60 4.51
25 Bond REV2 4.19 4.31 4.23 5.30
Jefferies ST 0.02 0.02 0.03 0.09
1GO bonds maturing in 20 years, avg. rating equivalent to Moody's Aa2 & S&P's AA
2Revenue bonds maturing in 30 years, avg. rating equivalent to Moody's A1 & S&P A+
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Idaho Bond Bank Auth $51,600,000 Revenue Bonds, Series 2014A
Bid Award* Bidder Name TIC
Hutchinson, Shockey, Erley & Co. 3.471549
BMO Capital Markets 3.520818
KeyBanc Capital Markets 3.534725
Morgan Stanley & Co, LLC 3.559976
Robert W. Baird & Co., Inc. 3.564142
Citigroup Global Markets Inc. 3.612645
Piper Jaffray 3.626343
Jefferies LLC 3.669214
J.P. Morgan Securities LLC 3.690038
Bank of America Merrill Lynch 3.696130
Guggenheim Securities, LLC 3.710156
Wells Fargo Bank, National Association 3.734445
Competitive Sale Results –Cities of Twin Falls and Jerome
Source: Ipreo, Bid Results, 2/12/2014
25
Idaho Bond Bank Authority $13,660,000 Revenue Bonds, Series 2014C
Bid Award* Bidder Name TIC
BMO Capital Markets 2.792250
Hutchinson, Shockey, Erley & Co. 2.800024
J.P. Morgan Securities LLC 2.806799
Raymond James & Associates, Inc. 2.824912
Robert W. Baird & Co., Inc. 2.869188
Competitive Sale Results –Cities of Ketchum, Hailey and Jerome
Source: Ipreo, Bid Results, 11/6/2014
26
Municipal Videos – www.zionspf.com/clients
ZB Public Finance’s Commitment to Idaho:http://www.youtube.com/watch?v=WllC-t9Z-5M
Role of a Municipal Advisor:https://www.youtube.com/watch?v=exu3quq7cOg
Chobani and Twin Falls Economic Development:http://www.youtube.com/watch?v=fSUH9BDdRtw
Minidoka School District GO Bond: https://www.youtube.com/watch?v=f-LqtxJxhMg
Pocatello Animal Shelter Bond:http://www.youtube.com/watch?v=J4UYprVRJ7w
City of Kuna and Financial Feasibility:https://www.youtube.com/watch?v=5HnwlWp3QtA
The Making of a Bond Election:https://www.youtube.com/watch?v=5WGD0eIf3lM
27
Thank You
Christian AndersonFinancial Analyst
(208) 501-7533christian.anderson@zionsbank.com
Cameron ArialVice President(208) 501-7481
Cameron.arial@zionsbank.com
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