Memorandum

City of Lawrence

Finance Department

TO:	Thomas M Markus, City Manager
FROM:	Bryan Kidney, Finance Director
DATE:	September 12, 2017
RE:	General Obligation Bonds, Series 2017-D Sale Results.

At 11:00 this morning, the City opened bids for General Obligation Bonds, Series 2017-D. Prior to taking bids on the Bonds, Moody’s affirmed its Aa1 rating on the City’s outstanding General Obligation Bonds.

The City received seven bids from interested investment banks, with true interest costs ranging from 2.428% to 2.506%. The bids are summarized below.

Bidder Name	Interest
Morgan Stanley & Co, LLC		2.427911
Citigroup Global Markets Inc.		2.449294
Stifel Nicolaus & Company, Inc.		2.487269
J.P. Morgan Securities LLC		2.494746
UBS Financial Services Inc.		2.498316
Hutchinson, Shockey, Erley & Co.		2.500414
Robert W. Baird & Co., Inc.		2.505854
Estimate as of July 28, 2017		2.97%

The lowest bid, submitted by Morgan Stanley & Co, LLC, conforms to all of the bidding requirements established by the City. This bid was approximately 55 basis points less than the most recent interest rate projections provided by the City’s Municipal Advisor, Springsted, Incorporated.   Staff and Springsted recommend awarding the bonds to Morgan Stanley & Co., LLC

As a result of the lower than anticipated interest rates and a premium bid by Morgan Stanley & Co., LLC, the total principal amount of the Bonds was reduced from an estimated $15,575,000 to $13,975,000. The Bonds will be payable over the next 20 years with level annual debt service. The annual cash flow savings will be used to lower the amount of debt needed to fund future capital improvement costs

The City’s Bond Counsel, Gilmore & Bell, P.C. has updated the draft Ordinance No. 9395 and Resolution No. 7223 to incorporate all of the final terms of the sale to Morgan Stanley & Co, LLC.