Qualified School Construction Bonds & Structured Investments

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18 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

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Ellendale Public School District #40


March 14, 2011

PFM Asset Management
LLC

One Keystone Plaza, Suite 300

North Front & Market Streets

Harrisburg, PA 17110

Phone: 717.232.2723

Fax: 717.233.6073

www.pfm.com






Qualified School

Construction Bonds & Structured Investments

PFM Asset Management
LLC

77 West Port Plaza

Suite 220

St. Louis, MO 63146

Phone:
314.878.5000

Fax:
314.878.5333

www.pfm.com


PFM

Overview of Forward Delivery Agreements (FDAs)


Investment of QSCB Sinking Fund limited to applicable Permitted Sinking Fund Yield
(PSFY)


Since March 2009, resets have ranged from 3.76% to 5.02%


PSFY is fixed based upon the date of pricing of the QSCBs


Investment alternatives include money market funds, portfolios of securities and Forward
Delivery Agreements (FDAs)



FDAs are the only vehicle that provides a guaranteed rate of return if held to maturity


Lock in the rate today on all future deposits to the sinking fund


Structured to match future deposit dates and final withdrawal to pay principal to bondholders


Allows the issuer to lock in yields well above short term interest rates



FDA structure is bankruptcy remote


issuer purchases and maintains outright ownership of
securities delivered under the contract


Tested in the Lehman Brothers bankruptcy



© PFM Asset Management LLC

1

PFM

Ellendale Public SD #40 QSCBs Characteristics


Taxable General Obligation School Building Bonds, Series 2010 (Qualified School
Construction Bonds


Direct Payment)


Priced in June 2010; PSFY is 4.37%


$4,050,000 due July 1, 2025



Annual principal installments into the sinking fund begin July 1, 2011



© PFM Asset Management LLC

2

PFM

3

FDA Mechanics

Provider

Bondholders

Ellendale Public

School District #40

Sinking Fund Payments and rolling
fund balance

Fixed
-
income
securities

Final Payment of
Principal

Sinking Fund Payments


Periodic Purchase of Securities


The Securities, held by the
trustee,
mature every
twelve months,
at which time the funds are used to purchase a new security

(
Every 12 months
)

Trustee

Forward Delivery Agreement (FDA)
Mechanics


Rolling delivery of Treasury and federal agency securities; Interest accrues on sinking fund
payments and rolling fund balance


Ellendale Public SD #40 is always in possession of cash or a security


New security delivered to account at least every twelve (12) months


matures prior to next deposit


Credit exposure of principal limited to underlying securities


© PFM Asset Management LLC

PFM

Ellendale Public SD #40
-

2010 QSCBs Sample FDA


Assumes annual deposits made by Ellendale into the FDA beginning July 1, 2011


Cumulative principal balance builds over time as deposits are made (as shown in brown)


Interest on all previous deposits is compounded on a semi
-
annual basis at rate specified by FDA


Treasury and Agency FDA yielding 3.81%; $903,699.44 of total interest paid


4

© PFM Asset Management LLC

-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
Interest
Rolling Balance
Deposit
PFM

Overview of PFM Asset Management LLC

5


SEC Registered Investment Adviser serving only as a
fiduciary to our clients


Over $40 billion
1

of public assets under management
nationwide


Over 29 years of managing portfolios comprising
high
-
quality securities for public entities


Executes over 200 daily trades for $1 billion in
securities

PFMAM Growth in Assets Under Management

as of December 31, 2010

1

As of December 31, 2010


Over $10B
1

under management


Over 300 clients nationwide


In
-
house Arbitrage Rebate Group


Dedicated Structured

Products Group

Operating Funds

Investment Consulting


$28.2B under management,

including $15B in 16 LGIPs/RIC


Enhanced cash and longer
-
term

strategy options


Customized plan


$15B under advisement


Manager
-
of
-
managers


Multi
-
asset class options


Emerging/Minority Manager
Program

Bond Proceeds

© PFM Asset Management LLC

$ Billion
$5 Billion
$10 Billion
$15 Billion
$20 Billion
$25 Billion
$30 Billion
$35 Billion
$40 Billion
$45 Billion
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
PFM

PFMAM’s Comprehensive Approach to Structured Investments


FDA design


Review legal documents


determine permissible
investments


Independently price and analyze FDAs using
sophisticated pricing models


PFMAM Term Sheet


Complex and thorough document that is tailored to
meet your unique needs


PFMAM reviews and discusses draft bid
specifications with all interested parties including
bond and tax counsel


Helps reduce or eliminate negotiation problems in
final document preparation


facilitates timely and
successful settlement



6

PFMAM delivers a final report at
the conclusion of each transaction
that is consistent with IRS record
keeping requirements



Summarizes major business and
legal provisions of the contract to
provide easy reference for the client



Includes bidding agent certificate,
the final solicitation documents and a
summary of the bids received


Since 2005, PFMAM has structured and competitively procured for clients over 280 structured
investments for over $37.7 billion of proceeds

© PFM Asset Management LLC

PFM

Importance of PFM’s Trading Room & Systems


Senior portfolio management team
with 20 years of experience working
together


Extensive market access and savvy


Advisor, not a broker or principal

Michael Varano


Portfolio Manager


Government Funds


Money Market Pools

Kerri Staub

Trading and Analytics

Jeff Rowe


Certificates of Deposit


Commercial Paper


Bankers’ Acceptances

Joe Creason

Trading and Analytics

Ken Schiebel, CFA


Separate Accounts


Treasuries & Federal Agencies

Matthew St. John

Trading and Analytics

Gregg Manjerovic, CFA


Separate Accounts


Federal Agency,
MBS

&
Municipals

Robert Cheddar, CFA


Chief Credit Officer


Corporate Notes & Commercial
Paper

Peter Noel

Trading and Analytics

Nicole Goshorn

Short
-
term Money Markets &
Repurchase Agreements

Brian Raubenstine

Trading and Analytics

Marty Margolis

Chief Investment Officer



Bloomberg


Tradeweb


Market
Axess


Reuters


Dow
Jones and other
news sources


Credit services:


Moody’s/Standard & Poor’s

PFM Market Access Systems

© PFM Asset Management LLC

7

PFM

Disclosure Statement

This

material

is

based

on

information

obtained

from

sources

generally

believed

to

be

reliable

and

available

to

the

public,

however

PFM

Asset

Management

LLC

cannot

guarantee

its

accuracy,

completeness

or

suitability
.

This

material

is

for

general

information

purposes

only

and

is

not

intended

to

provide

specific

advice

or

recommendation
.

All

statements

as

to

what

will

or

may

happen

under

certain

circumstances

are

based

on

assumptions,

some

but

not

all

of

which

are

noted

in

the

presentation
.

Assumptions

may

or

may

not

be

proven

correct

as

actual

events

occur,

and

results

may

depend

on

events

outside

of

your

or

our

control
.

Changes

in

assumptions

may

have

a

material

effect

on

results
.

Past

performance

does

not

necessarily

reflect

and

is

not

a

guaranty

of

future

results
.

The

information

contained

in

this

presentation

is

not

an

offer

to

purchase

or

sell

any

securities
.



© PFM Asset Management LLC

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