HomeMy Public PortalAboutAgreement_2016-01-21_BBVA CompassCompass
January 21, 2016
Tracey Hause
Administrative Services Director
Successor Agency to the Temple City Community Redevelopment Agency
9701 Las Tunas Drive
Temple City, CA 91780
Dear Ms. Hause:
Compass Bank, an Alabama banking corporation (the "Bank" or "Lender"), has reviewed the information
provided by the Successor Agency to the Temple City Community Redevelopment Agency ("Borrower") in connection
with the proposed refunding of tax-exempt bonds. Based on the review to date and subject to the timely receipt of a
signed copy of this letter as indicated below, and satisfying the conditions outlined herein, the Bank is pleased to
commit to provide up to $4,415,000 in tax-exempt financing (the "Financings" or "Obligations") as outlined in this
correspondence (this "Commitment Letter").
This Commitment Letter is being provided to the Borrower on a confidential basis. Except as required by law,
neither this Commitment Letter nor its contents may be disclosed, except to individuals who are officers, employees or
advisors of the Borrower who have a need to know of such matters and then only on the condition that such matters
remain confidential.
The Borrower hereby represents and covenants (and it is a condition to the Bank's commitment hereunder) that
all financial information and projections, and all other Information and general economic or specific industry information
(the "Information") that has been or will be made available to the Bank by Borrower and its representatives is or will be,
when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any
untrue statement of a material fad or omit to state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such statements are made. The Borrower
agrees that if at any time prior to the closing of the Financing any of the representations in the preceding sentences
would be incorrect if the Information were being furnished, and such representations were being made, at such time,
then the Borrower will promptly supplement the Information, as the case may be, so that such representations will be
correct at such time. The Borrower understands and acknowledges that in arranging the Financing the Bank may use
and rely on the Information without independent verification thereof. Notwithstanding anything herein to the contrary,
the Bank's obligation to provide the Financing shall be subject to the condition that from the date hereof to the date of
closing the Financing, there shall not have occurred any: (i) material adverse change in the financial condition,
operations or general affairs of the Borrower; (ii) event, court decision, proposed law or rule which may have the effect
of changing the status of the Financing or the interest thereon or the transaction contemplated herein; or (iii)
international or national crisis, suspension of stock exchange trading or banking moratorium materially affecting, in our
opinion, the Bank's ability to close the Financing transaction.
By signing below, the Borrower acknowledges and agrees to the terms and conditions of this Commitment
Letter and agrees to pay upon demand to the Bank all fees and expenses (Including but not limited to all costs and fees
of external legal counsel) in connection with this Commitment Letter and the negotiation, documentation and closing
thereof of this Financing. Bank and Borrower acknowledge and agree that by signing this commitment letter, each parry
is committing and agreeing to work together In good faith to close the transaction in a timely manner.
To accept this Commitment Letter, please execute it in the space provided below and return it to us by no later
than 4:OOpm, Pacific Time, on Wednesday, February 3, 2016. If this Commitment Letter is not accepted in the manner
aforesaid, it shall expire and be of no further force and effect as of that date and time. If this Commitment Letter is
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accepted in the manner aforesaid, the closing and funding of the Financing must occur on or before March 25, 2016.
These deadlines may be extended upon Bank's written approval.
We appreciate the opportunity to provide you this Commitment Letter and look forward to working with you to
expeditiously close this transaction. Please do not hesitate to contact us if you have any questions or if we may be of
further assistance to you at this time.
Sincerely,
ames Manning Diana P sk
Senior Vice President Senior Vice President
ACCEPTED and AGREED TO on 2016:
By:_
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Name: f 0 GGI�
Title: CleAf)er
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Compass
Borrower: Successor Agency to the Temple City Community Redevelopment Agency (the 'Borrower" or
the "Issuer').
Lender: Compass Bank through its Compass Mortgage Corporation (the "Lender" or the "Bank").
Diana Fisk, Senior Vice President
Commercial Banking Group
801 S. Figueroa St., Suite 1100
Los Angeles, CA 90017
Work: (213) 457-2045
Cell: 562-743-0724
diana.fisk@bbva.com
James Manning, Senior Vice President
Government & Institutional Banking
2850 E. Camelback Rd., Ste. 140
Phoenix, AZ 85016
Work: (602) 778-0795
james.manning@bbvacompass.com
Obligation Type: Tax Allocation Refunding Bonds, Series 2016
Obligation Amounts: Up to $4,415,000 for the Tax Allocation Refunding Bonds, Series 2016 (the "Obligation" or
"Financing" or the "Bonds")
Purpose: Refunding Temple City Redevelopment Agency Redevelopment Project Tax Allocation
Refunding Bonds Series 2005, Tax Allocation Refunding Bonds originally to refund Temple City
Financing Authority, 1993 Revenue Bonds (Rosemead Boulevard Redevelopment Project).
Proceeds of the Tax Allocation Refunding Bonds, Series 2016 will refund all of the outstanding
tax allocation bonds of the Borrower.
Security: The principal of, premium, if any, and interest on the Bonds shall be payable from and
secured by the following:
(i) A priority pledge of the tax revenues allocated to the Issuer by the County
Controller -Auditor from the Issuer's Redevelopment Property Tax Trust Fund
for payment of the Issuer's Recognized Obligation Payment Schedule, after
amounts required for pass-through payments, including negotiated pass
through payments and statutory pass-through obligations; and
(ii) all funds and accounts to be held in connection with the Bonds and all
investment earnings on such fund and accounts.
Maturity: 9/1/24 or approximately 9 years from closing
Interest Payment Interest is payable semi-annually on March 1st and September 1st of each year, commencing
Dates: September 1, 2016. Interest to be calculated on a 30/360 basis.
Principal Payment Principal is payable annually each September 1st commencing September 1, 2016.
Dates:
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Interest Rate: Tax Exempt Fixed Rate of 2.46% fixed for the full tenor of the Obligation.** This rate is
indicative and subject to change daily depending on market conditions. At the Borrower's
option fixed rate may be locked up to 60 days prior to closing.
** Indexed to 159 bps over 65% of the prevailing 5 -year LIBOR swap rate. Based on the current
rate of 1.34% for the swap index as of 1/21/16, the interest rate on funded balances today
would be 2.46%.
Prepayment: The Bonds are not subject to optional redemption
Upfront Origination None
Fee:
Covenants: • Affirmative covenant of timely submittal of Recognized Obligation Payments Schedule
CROPS); and
• The Borrower shall not enter into any new enforceable obligations (other than refunding
bonds) which are secured by a lien on the Pledged Collateral that is senior to, or on parity
with, the Bonds; and
• No Debt Service Reserve Fund required.
Representations/ The documents will contain those representations and warranties and covenants customarily
Warranties/ found in transactions of this nature, and others appropriate to the transaction, including but
Covenants: not limited to:
• Standard representations including but not limited to: no adverse litigation and Borrower
has not defaulted or non -appropriated on past obligations.
• No material adverse change in financial condition since fiscal year ended 6/30/14.
• Notices of (i) any default on any obligation, (ii) material litigation, (iii) material
governmental proceedings and (iv) material adverse effect.
• The Issuer shall covenant that it will comply with all requirements of the Redevelopment
Law and the Dissolution Act to insure the allocation and payment of the Tax Increment
Revenues.
• Issuer shall through its Oversight Board approve the ROPS for the subsequent 12 -month
period and timely file the ROPS with the appropriate officials of the County, the State
Department of Finance and the State Controller; provided, however, the Issuer shall include
in its first ROPS filing each year all principal and interest due and payable on the Bonds in
such fiscal year, with any amounts unpaid in the first ROPS payment included in Issuer's
second ROPS filing. If the Issuer's financing team, in consultation with the Lender,
determines that the ROPS filing procedure described above is not in line with the State
Department of Finance's current practice, such ROPS filings shall be for the next succeeding
semi-annual installment of principal and interest payable on the Bonds.
• Satisfactory language addressing Bank's right to file a writ of mandate to require the
Agency to perform its duty if Agency fails to submit a Recognized Obligation Payment
Schedule by the deadline.
• Bank will sign a traveling "Big Boy' letter in form acceptable to Bank's counsel. Bank will
agree that any future transferee of the Obligation signs a "Big Boy" letter in the
substantially the same form that the Bank signed prior to any transfer.
• The Borrower will indemnify the Bank and its officers against all and any liabilities that
might arise related to the Obligation.
• Additional representations and warranties, and other affirmative and negative covenants
that Bank considers customary and reasonably appropriate for the Credit Facility.
This Obligation is being purchased by BBVA Compass under the following conditions: (i) not
being registered or otherwise qualified for sale under the "Blue Sky" laws; (ii) the Lender will
hold as one single debt instrument; (iii) no CUSIP numbers will be obtained for the Obligation;
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(iv) no official Statement or similar offering document has been prepared in connection with
the private placement of this Obligation; (v) the Obligation will not close through the DTC or
any similar repository and will not be in book entry form. Obligation must be able to be
classified as a loan or held -to -maturity security in order to be acceptable to the Lender.
Note, all of the foregoing are subject to Lender's receipt and satisfactory review.
Financial Reporting: • Annual audited financial statements due within 270 days of fiscal year end.
• Appropriate disclosure due within 270 days of FYE of pertinent information including, but
not limited to:
o 5 year history of assessed valuation,
o Gross increment tax revenues (if max incremental revenues is applicable),
o Details of pass-throughs,
o Net increment tax revenue available for debt service,
o Coverage of Obligation plus parity debt ,if any, against net increment tax revenues
available to pay debt service,
o Coverage of subordinate debt, if any,
o Remaining tax increment distributed to public entities,
o Top 10 taxpayers and percent of gross revenue from each, and
0
• Borrower shall furnish at Lenders request such additional information that Lender may
from time to time reasonably request.
Closing Costs: Borrower will be responsible for costs and expenses related to Lenders counsel and CDIAC
fees. Lenders Counsel fee not to exceed $15,000.
Conditions Prior to the purchase of the Obligations, the following conditions precedent shall have
Precedent: occurred, all of which shall be in form and substance satisfactory to the Lender and its counsel.
• No public rating or official statement required.
• Opinion addressed to the Bank, from counsel to Borrower reasonably acceptable to the
Bank, setting forth such opinions as the Bank may require, including opinions concerning
the legal status of Borrower, the due authorization, execution and delivery of the
Obligation documents, the enforceability of the private placement documents, no conflict
with law, no litigation, and the receipt of all necessary governmental approvals.
• Tax Opinion addressed to the Bank from counsel reasonably acceptable to the Bank that
interest payable with respect to the debt service payments is excludable from gross income
for federal income tax purposes under Section 103 of the Internal Revenue Service Code
and such interest is not an item of tax preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations, although for purposes of computing
the alternative minimum tax imposed on certain corporations, such interest is taken into
account in determining certain income and earnings.
Properly executed documents in form and substance satisfactory to Bank and/or Bank's
counsel evidencing or supporting the Obligation. In terms of service level commitment,
Lenders counsel will respond with initial comments within 7 business days of receiving
draft legal documents from bond counsel, and within 5 business days of receiving any
subsequent iteration of the legal documents.
Additional conditions precedent that Bank considers customary and reasonably appropriate
for the Credit Facility, including further information disclosures.
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Goveming Law: This transaction shall be governed by and construed in accordance with the laws of the State of
California.
Commitment: The commitment to purchase the Bonds shall be through March 25, 2016.
This commitment letter is issued in reliance on the accuracy of all information, representations, schedules, and other
data and materials submitted by Borrower, all of which are deemed material. This commitment letter does not contain
all of the terms and conditions or other provisions that may be included in the final documents evidencing the Obligation.
The terms and provisions of this correspondence are confidential and may not be disclosed by Borrower to any other
person or entity. However, the foregoing restrictions on disclosure shall not apply to disclosure(s): (i) to Borrowers legal
counsel or financial advisor for purposes of advising Borrower with respect hereto and provided, however, that such
counsel and financial advisor agree to preserve the confidentiality of this correspondence; or (ii) in response to any
properly issued subpoena from any court or other governmental authority with jurisdiction over Borrower, provided that
Lender has been furnished reasonable advance notice of the intended disclosure and the opportunity to prevent or limit
the scope of any such disclosure.
Lender is providing the information contained in the document in connection with a proposed arm's-length commercial
banking transaction between Borrower and Lender. This information is provided to you pursuant to and in reliance upon
the "independent municipal investment advisor exemption" or "request for proposals exemption" provided under the
municipal advisor rules of the Securities and Exchange Commission, 17 C.F.R. § 240.15Ba1-1 et seq. (the "Municipal
Advisor Rules").
Lender is acting for its own interest and has financial or other interests that differ from yours. Lender is not acting as a
municipal advisor or financial advisor, and has no fiduciary duty to you or any other person pursuant to Section 15B of
the Securities Exchange Act of 1934 or otherwise. The information provided in this document is not intended to be and
should not be construed as "advice" within the meaning of Section 15B of the Securities Exchange Act of 1934 and the
Municipal Advisor Rules.
Lender is not recommending that you take any action with respect to the information contained in this document. Before
acting on this information, you should discuss it with your own financial and/or municipal, legal, accounting, tax, and
other advisors as you deem appropriate. If you would like a municipal advisor in this transaction that has legal fiduciary
duties to you, then you are free to engage a municipal advisor to serve in that capacity.
Lender does not provide legal, compliance, tax or accounting advice. Accordingly, any statements contained herein as to
tax matters are not intended by Lender to be used and cannot be used by any taxpayer for the purpose of avoiding tax
penalties that may be imposed on such taxpayer.
This commitment letter is intended for the sole and exclusive benefit of Borrower and Lender and may not be relied upon
by third parties.
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