HomeMy Public PortalAboutLetter of Intent for Underwriting-Placement Agent Services.pdfRAYMOND JAMES®
October 13, 2017
City of Tybee Island
403 Butler Avenue
Tybee Island, Georgia 31328
Re: Letter of Intent for Underwriting/Placement Agent Services
Dr. Shawn Gillen, City Manager:
In order for Raymond James & Associates, Inc. ("RJA") to give you advice regarding one or more related
transactions, and to document our compliance with an exception to the Municipal Advisor Rule, we ask
that you agree, and acknowledge by signing below, to the following:
Tybee Island, Georgia (the "City") is aware of the "Municipal Advisor Rule" of the Securities and
Exchange Commission (effective July 1, 2014) and the underwriter exception from the definition of
"municipal advisor" for a firm serving as an underwriter/placement agent for one or more series of
bonds or other municipal securities.
The City wishes to engage RJA as the underwriter/placement agent for bonds to be issued by Chatham
County Recreational Authority (the "Authority") for Marine Life Center Projects, other infrastructure
and to pay costs of issuance (collectively, the "Bonds") that the City and Authority currently anticipate
issuing and for which the City will be obligor. As an underwriter/placement agent, RJA may provide
advice to the City on the structure, timing, terms, and other similar matters concerning the Bonds.
It is the City's present intention that RJA will underwrite or place the Bonds, subject to satisfaction of
applicable procurement laws, formal approval by the City, finalizing the structure of the Bonds, and the
execution of a mutually agreed upon Bond Purchase Agreement. While the City presently engages RJA
as the underwriter/placement agent for the Bonds, this engagement letter is preliminary and
nonbinding, and may be terminated at any time by either the City or RJA without liability or obligation
on the part of either party. Additionally, the City engages Gray Pannell & Woodward, LLP as Bond
Counsel for this transaction and instructs RJA to coordinate efforts with that firm on this bond issuance.
This letter serves as acknowledgement of the attached G-17 letter.
Sincerely yours,
Acknowledged and Agreed to by:
Raymond James & Associates, Inc. City of Tybee Island, Georgia
,f9!
By: B
William J. "Bill" Camp, City ''-presentative
Managing Director
Attachment: G-17 Disclosure Letter
Two Buckhead Plaza, Suite 702 /! 3050 Peachtree Road, N.W. // Atlanta, GA 30305 /1 T 404.240.6840 // www.raymondjames.com
Raymond James & Associates, Inc., mem.ber'de:n Yyk Stock Exchange'SIPC
RAYMOND JAMES®
October 13, 2017
Chatham County Recreation Authority
P.O. Box 8161
124 Bull Street, Ste. 210
Savannah, Georgia 31412
Attn: Authorized Representative
Re: Disclosures by Underwriter/Placement Agent
Pursuant to MSRB Rule G-17
Chatham County Recreation Authority, Revenue Bonds (Tybee Island Projects),
Series 2017
Dear Representative:
We are writing to provide you, as an authorized representative of the Chatham County Recreation
Authority (the "Issuer"), and an official of the Issuer with the authority to bind the Issuer by contract,
with certain disclosures relating to the captioned bond issue (the "Bonds"), as required by Municipal
Securities Rulemaking Board (MSRB) Rule G-17 as set forth in MSRB Notice 2012-25 (May 7, 2012)1.
The Issuer has engaged Raymond James & Associates, Inc. ("RJA"), to serve as an underwriter, and not
as a financial advisor or municipal advisor, in connection with the issuance of the Bonds.
As part of our services as underwriter, RJA may provide advice concerning the structure, timing, terms,
and other similar matters concerning the issuance of the Bonds.
As the issuer of the Bonds, you will be a party to the bond purchase agreement and certain other legal
documents to be entered into in connection with the issuance of the Bonds, but the material financial
risks described in this letter will be borne by the obligor, as set forth in those legal documents. A copy
of this letter is also being sent to the obligor.
I. Disclosures Concerning the Underwriter's Role:
(i) MSRB Rule G-17 requires an underwriter to deal fairly at all times with both municipal issuers and
investors.
(ii) The primary role of the underwriter is to purchase the Bonds with a view to distribution in an arm's-
length commercial transaction with the Issuer. The underwriter has financial and other interests that
differ from those of the Issuer.
(iii) Unlike a municipal advisor, the underwriter does not have a fiduciary duty to the Issuer under the
federal securities laws and are, therefore, not required by federal law to act in the best interests of the
Issuer without regard to their own financial or other interests.
1 Interpretive Notice Concerning the Application of MSRB Rule G-17 to Underwriters of Municipal Securities
(effective August 2, 2012).
Two Buckhead Plaza, Suite 702 // 3050 Peachtree Road, N.W. 1/ Atlanta, GA 30305 // T 404.240.6840 // www.raymondjames.com
Raymond James & Associates, Inc., memoar New von, Stocs Exchange/SIPC
RAYMOND JAMES®
(iv) The underwriter has a duty to purchase the Bonds from the Issuer at a fair and reasonable price, but
must balance that duty with their duty to sell the Bonds to investors at prices that are fair and
reasonable.
(v) The underwriter will review the official statement for the Bonds in accordance with, and as part of,
their respective responsibilities to investors under the federal securities laws, as applied to the facts and
circumstances of this transaction2.
II. Disclosures Concerning the Underwriter's Compensation:
The underwriter will be compensated by a fee and/or an underwriting discount that will be set forth in
the bond purchase agreement to be negotiated and entered into in connection with the issuance of the
Bonds. Payment or receipt of the underwriting fee or discount will be contingent on the closing of the
transaction and the amount of the fee or discount may be based, in whole or in part, on a percentage of
the principal amount of the Bonds. While this form of compensation is customary in the municipal
securities market, it presents a conflict of interest since the underwriters may have an incentive to
recommend to the Issuer a transaction that is unnecessary or to recommend that the size of the
transaction be larger than is necessary.
III. Additional Conflicts and Business Relationships Disclosures:
RJA has identified the following additional potential or actual material conflicts or business relationships
we wish to call to your attention:
In the ordinary course of its various business activities, RJA and its affiliates, officers, directors, and
employees may purchase, sell or hold a broad array of investments and may actively trade securities,
derivatives, loans, commodities, currencies, credit default swaps, and other financial instruments for
their own account and for the accounts of customers. Such investment and trading activities may
involve or relate to assets, securities and/or instruments of the Issuer (whether directly, as collateral
securing other obligations or otherwise) and/or persons and entities with relationships with the Issuer.
RJA and its affiliates also may communicate independent investment recommendations, market advice
or trading ideas and/or publish or express independent research views in respect of such assets,
securities or instruments and at any time may hold, or recommend to clients that they should acquire,
long and/or short positions in such assets, securities and instruments.
• Conflicts of Interest/Payments to or from Third Parties
o In the ordinary course of its business, RJA and its affiliates have engaged, and may in the
future engage, in transactions with, and perform services for, the Issuer and its affiliates
for which they received or will receive customary fees and expenses.
o We understand that the Issuer may use a portion of the proceeds from the issuance of
the Bonds to refund certain of the Issuer's outstanding securities ("Refunded Bonds").
To the extent that RJA or an affiliate thereof owns Refunded Bonds, RJA or its affiliate,
as the case may be, would receive a portion of the proceeds from the issuance of the
Bonds.
2
Under federal securities law, an issuer of securities has the primary responsibility for disclosure to investors.
The review of the official statement by the underwriter is solely for purposes of satisfying the underwriters'
obligations under the federal securities laws and such review should not be construed by an issuer as a
guarantee of the accuracy or completeness of the information in the official statement.
Two Buckhead Plaza, Suite 702 /1 3050 Peachtree Road, N.W. // Atlanta, GA 30305 /! T 404.240.6840 // www.raymondjames.corn
Raymond James & Associates, Inc., member New York Stock Exchange'SIPC
RAYMOND JAMES®
IV. Disclosures Concerning Structure of Municipal Securities Financing:
Since RJA has recommended to the Issuer a financing structure that may be considered a "complex
municipal securities financing" for purposes of MSRB Rule G-17, attached is a description of the material
financial characteristics of that financing structure as well as the material financial risks of the financing
that are known to the underwriter and reasonably foreseeable at this time.
In accordance with the requirements of MSRB Rule G-17, if RJA recommends a "complex municipal
securities financing" to the Issuer that is not otherwise described herein, this letter will be
supplemented to provide disclosure of the material financial characteristics of that financing structure
as well as the material financial risks of the financing that are known to the underwriter and reasonably
foreseeable at that time.
If you or any other Issuer official has any questions or concerns about these disclosures, then please
make those questions or concerns known immediately to the undersigned. In addition, the Issuer should
consult with its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable,
to the extent it deems appropriate.
It is our understanding that you have the authority to bind the Issuer by contract with us, and that you
are not a party to any conflict of interest relating to the subject transaction. If our understanding is
incorrect, please notify the undersigned immediately.
Under MSRB Rules, we are required to seek your acknowledgement that you have received this letter.
Accordingly, please send me an email to that effect. Depending on the structure of the transaction that
the Issuer decides to pursue, or if additional potential or actual material conflicts are identified, we may
be required to send you additional disclosures regarding the material financial characteristics and risks
of such transaction and/or describing those conflicts. At that time, we also will seek your
acknowledgement of receipt of any such additional disclosures.
We look forward to working with you and the Issuer in connection with the issuance of the Bonds. We
appreciate your business.
Sincerely,
RAYMOND JAMES & ASSOCIATES, INC.
By:
Cc: City of Tybee Island (GA) - Obligor
Two Buckhead Plaza, Suite 702 i/ 3050 Peachtree Road, N.W. /i Atlanta, GA 30305 /1 T 404.240.6840 /1 www.raymondjames.com
Raymond James & Associates, Inc., member New York Stock ExcnangeiS'PC