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STIFEL
<br />D. Discuss the investors you would target for the City's POBs. Briefly discuss your firm's marketing strategy for placing the City's POBs, including whether or not you
<br />would use a formal investor relations program and/or internet roadshow. Describe any challenges in the marketing of POBs by a CA municipality in the current market.
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<br />Our banking and underwriting team structure, market, and price more bonds than the competition (that includes taxable
<br />bonds and POBs!). Our constant market presence provides a unique insight into active potential buyers (not just the top
<br />bondholders) for the City's POBs.
<br />Three -Part Investor Targeting Strategy
<br />Stifel has a three part strategy for targeting investors:
<br />1. Target Anchor Investors. First, Stifel's underwriter will
<br />identify and market to investors that buy POBs who we
<br />see as 'anchor investors.' These investors (e.g. bond
<br />funds) were large buyers of the recent Chula Vista and
<br />Orange POBs.
<br />2. Broaden Outreach. We will broaden our outreach to a
<br />growing list of POB buyers, including municipalities,
<br />and international buyers, to help drive down the
<br />interest rate.
<br />3. Leverage Private Client Group. Stifel will leverage its
<br />Private Client platform to generate interest from
<br />individual retail and smaller money managers
<br />interested in purchasing for retirement portfolios.
<br />Targets for Anchor Orders. The
<br />accompanying table identifies about 50
<br />buyers of recent California POB
<br />issuances and details which part of the
<br />yield curve they tend to target. Based
<br />on our recent experience with the
<br />Chula Vista and Orange POBs and the
<br />significant secondary trading activity
<br />Stifel executed on other POBs, we
<br />identified several investors as anchor
<br />orders for the City's POBs, highlighted
<br />in yellow. Of course, the make-up of
<br />the anchor group is subject to change
<br />and will be re-evaluated based on
<br />insight from our sale of the Huntington
<br />Beach POBs scheduled next week
<br />(among others).
<br />40/86 Advisor
<br />AIG
<br />American Family Life
<br />Americo Life Insurance
<br />ASB Capital Mgmt
<br />Baird Advisors
<br />Bel Air Investment Advisors
<br />Belle Haven Investments
<br />Bethpage FCU
<br />BlackRock
<br />Bluefin Trading
<br />Brean Capital LLC
<br />Cantor Fitzgerald
<br />Colorado Financial Mgmt Inv.
<br />Federated Life Insurance
<br />Fiduciary Trust Co. of NY
<br />First New York Securities
<br />First Technology FCU
<br />Global Atlantic Advisors
<br />Globe Life
<br />Goldman Sachs AM
<br />Gurtin Fixed Income
<br />Hexagon Asset Mgmt
<br />Invesco
<br />Municipal Demand to Further Drive
<br />Demand. Our broker colleagues serve as investment
<br />advisors to many municipalities around the country.
<br />We've utilized the demand from these buyers to help
<br />drive down interest rates that we set in the short -end of
<br />our POB transactions (first 5 years). Over the past 6
<br />months, Stifel garnered nearly $70 million of orders from
<br />municipalities to purchase high-grade taxable bonds, as
<br />illustrated in the accompanying chart.
<br />- Liberty Mutual Group
<br />Mackay Shields
<br />Millennium Partners
<br />Multi -Bank Securities
<br />National Exchange Bank
<br />National Rural Insurance
<br />Neuberger Berman
<br />Norwest Trust
<br />Old Orchard
<br />Performance Trust
<br />PIMCO
<br />Ramirez Asset Mgmt
<br />RE Advisors Corporation
<br />Searle & Company
<br />SNW Asset Mgmt
<br />Southern Farm Bureau Life
<br />Spring Lake Asset Mgmt
<br />Union Bank
<br />Victory Capital Mgmt
<br />Wasmer Schroeder
<br />Watermill Asset Mgmt
<br />Wllington Capital Mgmt
<br />. Wells Capital Mgmt
<br />Whittier Trust
<br />Maturity 1
<br />2
<br />3
<br />4
<br />5
<br />$1,000
<br />$1,000
<br />$1,000
<br />$1,000
<br />$1,000
<br />-
<br />-
<br />-
<br />-
<br />1,875
<br />3,150
<br />-
<br />-
<br />2,000
<br />1,520
<br />2,030
<br />1,000
<br />-
<br />-
<br />-
<br />3,805
<br />5,155
<br />1,840
<br />1,175
<br />stem, TX -
<br />3,000
<br />4,000
<br />-
<br />1,500
<br />1,500
<br />3,000
<br />2,500
<br />4,035
<br />-
<br />-
<br />1,000
<br />2,225
<br />-
<br />1,000
<br />-
<br />Investor Takeaways: Chula Vista and Orange POBs
<br />$500
<br />Step 3: Leverage Private Client Group Throughout
<br />$400
<br />$300 Step 2: Broaden Outreach
<br />(Municipalities; Int'I Buyers) Step 1: Establish
<br />Anchor Orders
<br />$200
<br />1�-
<br />$100
<br />$0 - -----
<br />N M V Ln w r, co m O N M V Ln w n c ti v cn
<br />O O O O O O O O O O O O O O O O O O O O
<br />N N N N N N N N N N N N N N N N N N N N
<br />■ Trading Account ■ Broker/Dealer ■ Hedge Fund ■International Other
<br />■ Bond Fund ■ Insurance ■ Trading Account ■ Municipality
<br />Allen, TX
<br />Chula Vista, CA
<br />Clovis, CA
<br />Laguna Beach, CA
<br />Oceanside, CA
<br />Oxnard, CA
<br />Lubbock, TX
<br />San Antonio Water Sy
<br />Pasadena, CA
<br />Redlands, CA
<br />Thousand Oaks, CA
<br />Santa Clara County, CA - - 17,640 - -
<br />Total $6,305 $11,655 $31,630 $9,420 $10,940
<br />Total
<br />$5,000
<br />1,875
<br />3,150
<br />2,000
<br />3,550
<br />1,000
<br />11,975
<br />7,000
<br />12,535
<br />3,225
<br />1,000
<br />17,640
<br />$69,950
<br />City of Santa Ana I Proposal to Provide Underwriting Services Page 13
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