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STIFEL
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<br />i. NTE Underwritine Fees
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<br />Stlfel's cost proposal Is comprehensive, competltive and reallstic to
<br />deliver the lowest cost of borrowing for the City. Based on a par amount
<br />of $671 million, we propose a gross spread of $1.86 per bond.
<br />a) Sales Takedown. Designed to compensate sales professionals for
<br />marketing the POBs as aggressively as possible, ensuring the lowest
<br />interest cost.
<br />b) Management Fee. Stifel does not propose a management fee if
<br />selected as sole manager of the City's POBs. If selected as senior
<br />manager, we propose a flat $30,000 fee.
<br />c) Expenses. Remaining fees are attributable to continuing disclosure,
<br />IPREO, and various other expenses.
<br />d) Underwriter's Counsel. The three firms and contacts we propose to
<br />serve as our counsel are Juan Galvan at Jones Hall, Albert Reyes, at
<br />Kutak Rock, and Kevin Hale at Orrick.
<br />Expenses
<br />$0.15
<br />$102,500
<br />Average Takedown
<br />1.70
<br />1,143,165
<br />Total Gross Spread
<br />$1.86
<br />$1,245,665
<br />MIMM
<br />Underwriter's Counsel
<br />$0.04
<br />$2S,000
<br />Miscellaneous I ccs
<br />0.00
<br />1,391
<br />IPREO Fees
<br />0.09
<br />61,688
<br />Blue Sky Survey
<br />0.00
<br />500
<br />DTC Setup
<br />0.00
<br />Soo
<br />CDIAC
<br />0.01
<br />5,000
<br />CUSIP Numbers
<br />0.00
<br />621
<br />Day Loan
<br />0.01
<br />7,500
<br />Total Expenses
<br />$0.15
<br />$102,500
<br />It is important to emphasize that the City's financing costs are primarily (more than 99%) determined by the interest rates
<br />set on the POBs while the underwritin fee ee represents roughly 0.2%of the total estimated par amount. Over the 13.3 year
<br />average life of the proposed POBs, the City will pay approximately $253.5 million in interest costs (assuming the City's
<br />issues $671 million in Bonds). By comparison, our proposed fee of $1.86 equates to $1,246,000. Each $0.50 in takedown
<br />equates to $335,000 while each basis point (0.01%) in interest rate equates to approximately $720,000 in interest costs.
<br />8. Q.arr,Ifla,;m�taura�;
<br />I. Certifications
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<br />Please refer to Appendix A.
<br />9. ira_ IIrrrr_r a:meP
<br />i. References
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<br />Please refer to Appendix A.
<br />City Council
<br />23-217
<br />5/18/2021
<br />City of Santa Ana I Proposal to Provide Underwriting Services Page 15
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