Great Valley School District Proposed Capital Projects Financing - PowerPoint PPT Presentation

Great Valley School District Proposed Capital Projects Financing & Debt Prepayment June 2, 2014 Michael C. Lillys James Gray Managing Director Vice President One Logan Square, 17 th floor One Logan Square, 17th Floor Philadelphia, PA 19103 Philadelphia, PA 19103 Phone: (215) 832-1501 Phone: (215) 832-1519 michael.lillys@rbccm.com Email: james.gray@rbccm.com

G-17 Disclosure RBC Capital Markets, LLC (“RBC CM”) is providing the information contained in this document for discussion purposes only in anticipation of serving as underwriter to the Great Valley School District (the “Issuer”) . The primary role of RBC CM, as an underwriter, is to purchase securities, for resale to investors, in an arm’s -length commercial transaction between the Issuer and RBC CM and that RBC CM has financial and other interests that differ from those of the Issuer. RBC CM is not acting as a municipal advisor, financial advisor or fiduciary to Issuer or any other person or entity. The information provided 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. 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. If the Issuer would like a municipal advisor in this transaction that has legal fiduciary duties to the Issuer, then the Issuer is free to engage a municipal advisor to serve in that capacity. 1

Interest Rate History 10YR AAA Rates 10YR AAA MMD Municipal Market Data Index as of 5/28/14: 2.15% Low Since 1/1/2012: 1.47% January 1, 2012 - Present High Since 1/1/2012: 3.04% 3.1 Avg. Since 1/1/2012: 2.07% 3 2.9 High = 3.04% (1) 2.8 2.7 2.6 2.5 2.4 Rates (%) 2.3 2.2 2.1 2 1.9 Current = 2.15% (3) 1.8 1.7 1.6 1.5 Low = 1.47% (2) 1.4 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Mar-14 May-14 (1) Reflects market conditions as of 9/05/13 2 (2) Reflects market conditions as of 11/30/12 (3) Reflects market conditions as of 5/28/14

Current Aggregate Debt Service AGGREGATE DEBT SERVICE (Before State Reimb) Great Valley School District Series of Series of Series of 2010 Series of 2011 Aggregate Period Ending Series of 2006 2009A 2009B (QSCB) (QSCB) Series of 2012 Series of 2013 Debt Service 06/30/2015 5,491,368 581,038 589,650 60,463 20,747 1,859,810 808,450 9,411,525 06/30/2016 5,492,618 577,913 593,450 60,463 20,314 1,862,250 816,150 9,423,157 06/30/2017 5,517,618 578,200 571,650 60,463 19,882 1,859,150 833,450 9,440,413 06/30/2018 5,516,818 371,700 60,463 19,450 1,863,900 1,405,150 9,237,481 06/30/2019 788,318 60,463 19,018 1,855,150 1,395,150 4,118,098 06/30/2020 785,318 60,463 18,586 1,858,400 1,402,200 4,124,966 06/30/2021 785,955 60,463 18,153 1,858,000 1,396,000 4,118,571 06/30/2022 60,463 17,721 1,855,400 1,394,400 3,327,984 06/30/2023 60,463 17,289 1,855,400 627,300 2,560,452 06/30/2024 60,463 16,857 1,862,800 1,940,120 06/30/2025 60,463 16,424 707,200 784,087 06/30/2026 60,463 15,992 76,455 06/30/2027 60,463 15,560 76,023 06/30/2028 59,614 15,128 74,742 06/30/2029 14,696 14,696 06/30/2030 14,263 14,263 24,378,010 2,108,850 1,754,750 845,633 280,080 19,297,460 10,078,250 58,743,033 Principal Outstanding: $21,485,000 $1,970,000 $1,655,000 $822,706 $345,778 $15,480,000 $9,040,000 Purpose: CR96,98,&01 CR03 CR03A NM NM AR04,09 CR05;AR09B Call Date: 02/15/2016 08/15/2014 08/15/2014 Anytime Anytime 08/15/2020 02/15/2018 AR: Advance Refunding CR: Current Refunding NM: New Money 3

Summary of Proposed Transactions  District will issue $9,995,000 of new debt Will fund capital replacements, renovations and improvement to six school buildings and the administrative offices and - technology throughout the District 10 year borrowing term - A bond issue is the most cost-effective method of financing - By keeping the principal amount at $10 million or less the District will be able to obtain the lowest possible rates (Bank - Qualified) and the shortest possible call provision of 5 years Annual debt service payments will be approximately the same as the 2009 A and B Bonds - Interest rates are very favorable , it’s a good time to issue debt -  District will exercise the “Call Option” (ability to prepay principal) on the 2009 A and B Bonds Annual debt service is approx. $1,170,000 - Cost is approx. $3.7 million, which will be funded with available District funds - 2009 A and B Bonds will be prepaid on the August 15, 2014 call date - Once these bonds are prepaid, the debt service on the new bond issue will not result in any additional budget impact to - the District 4

Bond Issue – Est. Sources & Uses of Funds Sources and Uses of Funds Great Valley School District Series of 2014 (Bond Issue - Current) Dated Date 07/09/2014 Delivery Date 07/09/2014 Sources: Bond Proceeds: Par Amount 9,995,000.00 9,995,000.00 Uses: Project Fund Deposits: Project Fund 9,866,538.75 Delivery Date Expenses: Cost of Issuance 51,000.00 Underwriter's Discount 77,461.25 128,461.25 9,995,000.00 5

Bond Issue – Est. Costs of Issuance Cost of Issuance Great Valley School District Series of 2014 (Bond Issue - Current) Est. Cost of Issuance $/1000 Amount Bond Counsel 2.20110 22,000 Solicitor 0.25013 4,000 DCED/Legal Ads 0.35018 2,000 Rating 1.25063 12,500 Paying Agent 0.15008 1,500 Official Statement 0.40020 4,000 Misc 0.50025 5,000 5.10255 51,000 6

Bond Issue – Est. Debt Service Great Valley School District Series of 2014 (10yr) Period Annual Debt Ending Principal Coupon Interest Debt Service Service 07/09/2014 11/01/2014 1,070,000 0.300% 41,389.29 1,111,389.29 05/01/2015 64,913.50 64,913.50 06/30/2015 1,176,302.79 11/01/2015 1,040,000 0.450% 64,913.50 1,104,913.50 05/01/2016 62,573.50 62,573.50 06/30/2016 1,167,487.00 11/01/2016 1,040,000 0.590% 62,573.50 1,102,573.50 05/01/2017 59,505.50 59,505.50 06/30/2017 1,162,079.00 11/01/2017 470,000 0.880% 59,505.50 529,505.50 05/01/2018 57,437.50 57,437.50 06/30/2018 586,943.00 11/01/2018 1,050,000 1.170% 57,437.50 1,107,437.50 05/01/2019 51,295.00 51,295.00 06/30/2019 1,158,732.50 11/01/2019 1,065,000 1.460% 51,295.00 1,116,295.00 05/01/2020 43,520.50 43,520.50 06/30/2020 1,159,815.50 11/01/2020 1,080,000 1.720% 43,520.50 1,123,520.50 05/01/2021 34,232.50 34,232.50 06/30/2021 1,157,753.00 11/01/2021 1,095,000 1.970% 34,232.50 1,129,232.50 05/01/2022 23,446.75 23,446.75 06/30/2022 1,152,679.25 11/01/2022 1,115,000 2.170% 23,446.75 1,138,446.75 05/01/2023 11,349.00 11,349.00 06/30/2023 1,149,795.75 11/01/2023 970,000 2.340% 11,349.00 981,349.00 06/30/2024 981,349.00 9,995,000 857,936.79 10,852,936.79 10,852,936.79 Note: MMD +20 +10bps 7

Prepayment Requirements - Series 2009A & B Bonds Refunding Requirements Great Valley School District Series of 2014 (CR09A) Period Principal Ending Interest Redeemed Total 08/15/2014 28,018.75 1,970,000.00 1,998,018.75 28,018.75 1,970,000.00 1,998,018.75 Refunding Requirements Great Valley School District Series of 2014 (CR09B) Period Principal Ending Interest Redeemed Total 08/15/2014 24,825.00 1,655,000.00 1,679,825.00 24,825.00 1,655,000.00 1,679,825.00 Total Refunding Requirements 2009A Bonds 1,998,018.75 2009B Bonds 1,679,825.00 Total 3,677,843.75 8

Est. New Aggregate Debt Service NEW AGGREGATE DEBT SERVICE (Before State Reimb.) Great Valley School District (A) (B) (C) (D) (E) (F) [A-B-C+D] [E-A] Current Less: Series of Less: Series of Series of 2014 New Aggregate New Vs. Current Period Ending Aggregate Debt 2009A 2009B (10Yrs) Debt Service Aggregate Debt 06/30/2015 9,411,525 581,038 589,650 1,176,303 9,417,140 5,615 06/30/2016 9,423,157 577,913 593,450 1,167,487 9,419,282 -3,876 06/30/2017 9,440,413 578,200 571,650 1,162,079 9,452,642 12,229 06/30/2018 9,237,481 371,700 586,943 9,452,724 215,243 06/30/2019 4,118,098 1,158,733 5,276,831 1,158,733 06/30/2020 4,124,966 1,159,816 5,284,782 1,159,816 06/30/2021 4,118,571 1,157,753 5,276,324 1,157,753 06/30/2022 3,327,984 1,152,679 4,480,663 1,152,679 06/30/2023 2,560,452 1,149,796 3,710,248 1,149,796 06/30/2024 1,940,120 981,349 2,921,469 981,349 06/30/2025 784,087 784,087 06/30/2026 76,455 76,455 06/30/2027 76,023 76,023 06/30/2028 74,742 74,742 06/30/2029 14,696 14,696 06/30/2030 14,263 14,263 58,743,033 2,108,850 1,754,750 10,852,937 65,732,370 9

Proposed Financing Timetable June 2 Board Adoption of Parameters Bond Resolution for capital projects financing Send out Call Notice for 2009 A and B Bonds Bond Sale – lock-in rates on the bond issue June 3 July 9 Bond issue settlement August 15 Prepayment of 2009 A and B Bonds 10