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BofA SECURITIES
<br />March 11, 2021
<br />Kathryn Downs
<br />Executive Director of Finance & Management Services Agency
<br />City of Santa Ana
<br />20 Civic Center Plaza
<br />Santa Ana, CA 92701
<br />Dcar Ms. Downs:
<br />On behalf of BofA Securities, Inc. ("BofA Securities" or "BofA" ), we are pleased to submit our proposal to provide
<br />underwriting services for the City of Santa Ana (the "City"). Our team is well qualified to provide the City with
<br />rnmprehensive honking services, marketing and underwriting execution. While we detail our rredentinls and
<br />recommendations herein, we would like to highlight the following qualifications:
<br />• Leadership with Taxable and POB Financings — BofA has a long and accomplished history in the public finance
<br />sector, and most relevant to the City's proposed financing, we are a leading senior -managing underwriter of
<br />taxable bonds nationally since 2010. During this timeframe, BofA has served as senior manager on $3.2 billion
<br />of pension obligation bonds ("POBs") nationally. Over the past 36 months, we served as lead manager on
<br />California POBs for issuers including the cities of Riverside ($432 million), Gardena ($101 million), El Cajon
<br />($147 million) and Downey ($114 million) as well as pension -related Fnancings for the cities of Gainesville, FL
<br />($206 million) and Fort Lauderdale, FL ($167 million). Notably, BofA is the only major Wall Street firm with
<br />recent and relevant experience underwriting California P08s over this timeframe.
<br />• Leadership with Large Financings (Greater than $500 million) — Over the past five years, BofA has held a
<br />leading market position in California for transactions sized greater than 5500 million — a significant threshold
<br />at which underwriters are tasked with the most challenging offerings. We believe our dominant position in
<br />this segment of the rnarket is a reflection of our banking and underwriting team's ability to flawlessly execute,
<br />rndrkel and price large and/or complex financings.
<br />• Significant Experience Leading Underwriting Syndicates - Given our experience with large transactions, we
<br />are a frequent book -running senior manager for transactions with underwriting syndicates and would be able
<br />to help lead and mobilize the City's underwriting team to ensure efficient execution of the City's transaction,
<br />This week, BofA served as book -running senior manager on the State of California's $1.9 billion March 2021
<br />General Obligation Bonds for which we successfully managed an underwriting syndicate of more than SO co -
<br />managers and selling group members.
<br />• POB Structuring Expertise — Our team's structuring capabilities and approach to POBs is second to none For
<br />example, BofA has developed a proorletory model that optimizes the selection of arnorti2ation bases, taking
<br />into account market conditions and the issuer's savings obiectives. As the City evaluates how much of its
<br />unfunded liability to refinance, BofA can help the City determine the most favorable amortization bases to
<br />refund as well as the POB debt structure that meets the City's financing objectives. Furthermore, we have
<br />capabilities to run simulation and stress test analyses on a real-time basis, which is important as the City
<br />evaluates risks associated with the proposed pension refinancing bonds.
<br />• Comprehensive Financing Approach — For the proposed POB financing, we have taken a holistic view of the
<br />City's finances, debt and credit profile in order to tailor scenarios around the City's objectives. As detailed
<br />herein, we provide samples of SD% and 9D% UAL financing scenarios with debt service structured to reduce
<br />the City's projected budgetary gaps in its 10-Year General Fund Financial outlook —while not exceeding the
<br />current unfunded liability payments in any year. To further enhance savings, we also discuss potential
<br />refinements such as an "index eligible" term bond and the use of bond insurance. Depending on the ultimate
<br />timing for bringing the POBs to market, we also discuss the possible use of short-term notes (TRANS or BANS)
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