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Getting the Most from Your Cash Flow Borrowing Program

Getting the Most from Your Cash Flow Borrowing Program. Education Cash Flow (ECF) FY 2012 Program A. Piper Jaffray & Co. Des Moines Public Finance 3900 Ingersoll Avenue, Suite 110 Des Moines, IA 50312 800 333-6008. Matt Gillaspie Senior Vice President matthew.r.gillaspie@pjc.com

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Getting the Most from Your Cash Flow Borrowing Program

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  1. Getting the Most from Your Cash Flow Borrowing Program Education Cash Flow (ECF) FY 2012 Program A

  2. Piper Jaffray & Co. Des Moines Public Finance 3900 Ingersoll Avenue, Suite 110 Des Moines, IA 50312 800 333-6008 Matt Gillaspie Senior Vice President matthew.r.gillaspie@pjc.com 515 247-2353 Timothy Oswald Managing Director timothy.j.oswald@pjc.com 515 247-2358 Travis Squires Vice President travis.r.squires@pjc.com 515 247-2354

  3. Education Cash Flow (ECF) Fund • Meeting your cash flow borrowing needs • A partnership of Piper Jaffray and Iowa School Finance Information Services (ISFIS)

  4. So, what is ECF? • A 28E entity to allow school districts to meet their cash flow needs. • Only school districts are members of the 28E. • Annual structure is flexible to meet changing market conditions.

  5. Who is Involved? • Piper Jaffray – Underwriter/Line of Credit Organizer • Kutak Rock – bond counsel • ISFIS – Administrator • Let’s look at each party’s responsibilities:

  6. Piper Jaffray • Piper: • Reviews cash flow estimates; reviews warrant sizing amount. • Review with schools compliance with tax laws. • Arranges for credit support or lender where appropriate. • Secures credit rating, where appropriate. • Sells warrants to investors when public securities offered.

  7. Kutak Rock • Denver-based national bond counsel. • Extensive work in school TRANS programs around the country. • Experience in Iowa.

  8. ISFIS • Program Administrator. Responsible for: • Building cash flow software interface. • Loading data from the Department of Management and the Department of Education. • Collecting documents from districts. • Handling day to day transactions. • Answering phone call, emails and questions from districts. • Producing monthly statements/general accounting.

  9. Other Parties • Third party trustee who holds the warrants and administers day-to-day investments. • Lender if line of credit structure is used.

  10. Anticipated Program Structure Program structure will be driven by economics. We anticipate: • Warrants underwritten by Piper – not a line of credit. • School will have local flexibility to reinvest idle proceeds. • You can depend on ECF to provide you the information to make an informed decision regarding reinvestment. • Two draw dates – either July 1 or August 1.

  11. Timelines • March 18: Cash flow submission begins. • April 1: Deadline for cash flow submission. • April/May: Boards approve resolution to participate. • June 10: Last date to drop out of July draw. • July 1: Closing of July draw – all warrant funds delivered to schools requesting July funds. • July 10: Last date to drop out of August draw. • August 1: Closing of August draw- all warrant funds delivered to schools requesting July funds.

  12. Timelines • Note: you may draw none, some or all of your warrant on 7/1, and then none, some or all of your remaining balance on 8/1. • Sinking fund timelines: • 11/25/11 First sinking fund payment due (25%) • 12/25/11 Second sinking fund payment due (50%) • 1/25/12 Third sinking fund payment due (75%) • 2/25/12 Final sinking fund payment due (100%)

  13. Am I going to have gobs of paperwork to fill out? • Paperwork has been streamlined to maximum extent possible. • Cash flow submitted via Excel: pre-loaded data where possible. • Final cash flow signed by school and mailed to ECF. • No workout plans required, but we will work with schools to develop realistic long range cash flow plans if needed. • All resolutions have been prepared. • We’re here to help – if you have questions, call or email.

  14. How do I evaluate my options? • Look at net borrowing cost. Take into consideration: • Up-front fees • Rate of return on idle funds • Services provided • Program transparency • Make sure comparison is apples to apples. • Use tools to figure net borrowing cost.

  15. What do Piper and ISFIS commit to? • Evaluate the marketplace. • Offer a customer driven program: we’ll make sure the solution fits the market conditions. • Give schools the tools to make the decision that is in the school’s best interest. • Provide continuing customer services – when you have questions we’ll find the answers.

  16. Thanks for considering ECF • We really appreciate the opportunity to earn your business. • Please do not hesitate to contact us if you have questions. Larry Sigel ISFIS 515-251-5970 515-490-9951 (cell) larry.sigel@isfis.net Matt Gillaspie Piper Jaffray 515-247-2353 800-333-6008 Matthew.R.Gillaspie@pjc.com

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