Michael L. Fitzgerald, Treasurer of State

REQUEST FOR PROPOSALS LEAD MANAGING AND CO-MANAGER UNDERWRITERS TOBACCO SETTLEMENT ASSET-BACKED BONDS

ISSUING OFFICE State of Iowa Treasurer’s Office

Issued on January 22, 2021

1. INTRODUCTION

1.1 In 2000, the General Assembly enacted HF 2579 creating the Tobacco Settlement Authority (the “Authority” or “TSA”) in order to provide the framework to allow for the securitization of payments stemming from the 1998 Master Settlement Agreement. During the 2001 legislative session, SF 532 was approved, which authorized the securitization of the Tobacco Settlement Revenues (“TSRs”) and the subsequent sale by the State of 100% of the TSRs to the Authority. In October of 2001 the Authority issued $644,245,000 of Series 2001 Tobacco Settlement Asset-Backed Bonds (the “Series 2001 Bonds”) comprising $604,245,000 of tax-exempt bonds and $40,000,000 of taxable bonds. Seventy-eight percent (78.0%) of the available TSRs was pledged for the repayment of the Series 2001 Bonds.

On November 30, 2005, the TSA issued $831,962,030 of Series 2005 Tobacco Settlement Asset- Backed Bonds (the “Series 2005 Bonds”) in order to fully refund the outstanding Series 2001 Bonds, of which $609,052,030 were tax-exempt and $222,910,000 were taxable.

The Authority is a body both corporate and politic, created for the sole purpose of purchasing and receiving any assignment of the TSRs and issuing obligations to fund that purchase. The Authority is comprised of three members: the Treasurer of State, the Auditor of State and the Director of the Department of Management.

The Authority is considering a refunding and restructuring of the outstanding Series 2005 Bonds that may involve the issuance of one or more series of taxable and/or tax-exempt bonds (the “Refunding Bonds”). The structure and timing of any transaction is subject to change based on, among other factors, interest rates in the taxable and tax-exempt markets and dynamics within the tobacco bond market. Chapter 12E of the Iowa Code authorizes the Authority to issue refunding bonds. Under Section 12.30 of the Iowa Code, the Treasurer of State (the “Treasurer”) is authorized to select financing professionals for authorities or state agencies issuing debt obligations.

1.2 The intention of this RFP is to select qualified firms to serve as lead managing underwriter and co-managers for a contemplated issuance of the Refunding Bonds. If your firm would like to be considered for the position of lead managing underwriter for this issuance, please indicate such in your proposal. If your firm does not wish to be considered for the position of lead manager, but would like to be considered for a co-manager position, please indicate such in your proposal. Firms proposing as lead managing underwriter will also be considered for a co-manager position, if not selected as lead managing underwriter.

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2. ADMINISTRATIVE INFORMATION

2.1 Issuing Officer The Issuing Officer, identified below, is the sole point of contact regarding the RFP from the date of issuance until selection of the successful firms.

Randi McLaughlin, Deputy Treasurer State Treasurer’s Office Lucas Building Des Moines, Iowa 50319 Email: [email protected]

2.2 Restriction on Communication and Requests for Clarification From the issue date of this RFP until announcement of the successful firms, firms may contact only the Issuing Officer, and such communication may only be via email. The Issuing Officer will respond only to questions regarding the procurement process. Firms may be disqualified if they contact any Authority board member or state employee of any department or office other than the Issuing Officer regarding this RFP. This prohibition includes the Authority’s financial advisor, transaction counsel, and disclosure counsel. The Authority has retained PFM Financial Advisors LLC as its independent financial advisor for the Refunding Bonds.

Firms must submit questions via e-mail related to the interpretation of this RFP. Questions must be received by the Issuing Officer, as defined above, no later than 3:30 p.m., Central Time, January 27, 2021. Verbal questions will not be permitted. If the questions or requests for clarifications pertain to a specific section of the RFP, please reference the page and section number(s). The Treasurer’s Office will post written responses to the questions and requests for clarifications on the Treasurer’s website at www.iowatreasurer.gov on or around Monday, February 1, 2021. The written responses will be considered part of the RFP.

2.3 Downloading the RFP and Amendments from the Internet The Treasurer will post the RFP and any amendments on the Treasurer’s website at www.iowatreasurer.gov. Responding firms are advised to check the Treasurer’s website periodically for amendments to this RFP.

2.4 Procurement Timetable The following dates are set forth for informational and planning purposes; however, the Treasurer reserves the right to change the dates.

Event Date RFP Issued Friday, January 22nd Written Questions Due to Issuing Officer Wednesday, January 27th, 3:30 pm CT Response by the Treasurer to Questions On or about Monday, February 1st Proposals Due Monday, February 8th, 3:30 pm CT Announce Successful Firm(s) ( Subject to Change) Week of February 15th

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2.5 Amendment to the RFP and Bid Proposal and Withdrawal of Bid Proposal The Treasurer reserves the right to amend the RFP at any time. The firm shall acknowledge receipt of any and all amendments in its proposal. If the amendment occurs after the closing date for receipt of bid proposals, the Treasurer, in his sole discretion, allow firms to amend their bid proposals in response to the amendment if necessary.

The firm may amend its bid proposal. The amendment must be in writing, signed by the firm and received by the due date and time set for the receipt of proposals. Firms who submit proposals in advance of the deadline may withdraw, modify, and resubmit proposals at any time prior to the deadline for submitting proposals. Firms must notify the Issuing Officer in writing if they wish to withdraw their proposals.

2.6 Proposal Conference No proposal conference will be held to discuss this RFP.

2.7 Submission of Proposal The firm’s proposal must be submitted via e-mail addressed to the Issuing Officer pursuant to Section 2.1 and must be received by 3:30 p.m. Central Time, February 8, 2021. This is a mandatory requirement and will not be waived by the Treasurer. Any bid proposal received after this deadline will be rejected. Firms must furnish all information necessary to evaluate their proposal. Proposals that fail to meet the mandatory requirements of the RFP will be disqualified. Verbal information provided by the firm shall not be considered part of the firm's proposal.

2.7.1 Joint proposals will not be accepted.

2.7.2 Proposals should be based solely on the material contained in this RFP or in subsequent modifications to the RFP. Firms are to disregard any draft material they may have received, any newspaper articles they may have read, and any other previous oral or written representations made regarding the subject matter of this RFP.

2.7.3 Firms are specifically notified that failure to comply with or respond to any part of this RFP that requires a response may result in rejection of its proposal. A proposal shall be rejected outright and not evaluated for any one (1) of the following reasons:

2.7.3.1 Failure of the firm to deliver the proposal by 3:30 p.m. central time on the due date. 2.7.3.2 Failure to include the required attachments (Attachments A-B) signed by an individual authorized to legally bind the firm submitting the proposal.

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2.8 Proposal Changes and Addenda The Treasurer shall prepare written addenda in response to all pertinent questions and requests for interpretation submitted in writing.

2.9 Proposal Format These instructions prescribe the format and content of the bid proposal. They are designed to facilitate a uniform review process. Failure to adhere to the proposal format may result in the disqualification of the bid proposal.

2.9.1 The bid proposal shall be in Adobe PDF format.

2.9.2 The bid proposal shall be an attachment to an e-mail addressed to the Issuing Officer listed in Section 2.1. The subject line of the email should read: “Proposal for Underwriter for a Refunding of the 2005 Tobacco Bonds”

2.9.3 The Treasurer prefers a concise response. Bid proposals from firms responding for the role of lead managing underwriter shall be limited to no more than ten (10) pages. Bid proposals for firms responding for the role of co-manager(s) shall be limited to no more than five (5) pages.

Response sections not included in the aforementioned page limits include:  Transmittal Letter  Section 5 – Firm Information  Section 6 – Transaction Proposal: Only subsection 6.3 excluded from page limit  Section 7 – Cost Proposal  Attachment A – Bid Compliance and Certification Form  Attachment B – Authorization to Release Information

2.10 Technical Proposal The following documents and responses shall be included in the bid proposal in the order given below:

2.10.1 Transmittal Letter One copy of the transmittal letter must be submitted as part of the proposal. The transmittal letter must clearly indicate that it is the transmittal letter, identify the firm submitting the proposal, and indicate the name, title, address, telephone number and e- mail address of the person in the firm who may be contacted by the Treasurer regarding the contents of firm’s proposal. The transmittal letter must also contain any requests for confidential treatment of information submitted by the firm as required by section 2.22 of this RFP. The transmittal letter is not included in the page count limits described in section 2.9.3.

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2.10.2 Responses to Questions and Information Requested in Section 5 and Section 6. Please restate each question in that section followed by your response. Please refer to the applicable page count limits described in section 2.9.3 for your firm’s responses to these sections.

2.10.3 Cost Proposal Firms responding for the role of lead managing underwriter shall provide a cost proposal for its proposed services as indicated in Section 7. The Cost Proposal is not included in the page count limits described in section 2.9.3. Please note: No fees will be paid if the bonds are not issued.

2.10.4 Bid Compliance and Certification Form The firm shall sign and submit with the bid proposal the document included as Attachment A in which the firm certifies that the contents of its proposal are true and accurate. The Bid Compliance and Certification Form is not included in the page count limits described in section 2.9.3.

2.10.5 Authorization to Release Information The firm shall sign and submit with the bid proposal the document included as Attachment B in which the firm authorizes the release of information to the Treasurer. The Authorization to Release Information is not included in the page count limits described in section 2.9.3.

2.11 Rejection of Proposals Issuance of the RFP in no way constitutes a commitment by the Treasurer to select a vendor. At any time prior to execution of a written contract, the Treasurer reserves the right to reject any or all proposals received in response to this RFP, in whole or in part, for any reason.

2.12 Bid Proposal Clarification Process The Treasurer reserves the right to contact a firm after the submission of bid proposals for the purpose of clarifying a bid proposal to ensure mutual understanding. The Treasurer will not consider information received if the information materially alters the content of the bid proposal. An individual authorized to legally bind the firm shall sign responses to any request for clarification. Responses shall be submitted to the Issuing Officer within the time specified in the request. Failure to comply with requests for additional information may result in rejection of the bid proposal as noncompliant.

2.13 Interviews The Treasurer reserves the right to schedule online interviews with the firms after the submission of proposals.

2.14 Cost of Proposal The costs of preparation and delivery of the bid proposal are solely the responsibility of the firm submitting such proposal.

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2.15 Evaluation of Bid Proposals Submitted Bid proposals that are timely submitted and are not subject to disqualification will be reviewed in accordance with Section 8 of the RFP.

Following the selection by the Treasurer, each firm submitting a proposal for underwriter will receive an emailed confirmation of the Treasurer’s decision.

2.16 In accordance with Iowa Code Section 72.3, the proposals will remain confidential until the evaluation committee has reviewed all of the proposals submitted in response to this RFP and firms have been notified regarding the selection. Per Iowa Code Article 22, the proposals will be available for inspection after firms have been notified of the selection.

2.17 The Treasurer may use any information provided in the proposal to obtain additional criminal history and credit data on all persons identified in a firm’s proposal.

2.18 Waiver of Deficiencies The Treasurer reserves the right to waive or permit cure of nonmaterial variances in a bid proposal if, in the judgment of the Treasurer, it is in the Authority’s best interest to do so. Nonmaterial variances include minor informalities that do not affect responsiveness; that are merely a matter of form or format; that do not change the relative standing or otherwise prejudice other firms; that do not change the meaning or scope of the RFP; or that do not reflect a material change in the services. In the event the Treasurer waives or permits cure of nonmaterial variances, such waiver or cure will not modify the RFP requirements or excuse the firm from full compliance with RFP specifications or other contract requirements if the firm is selected. The determination of materiality is in the sole discretion of the Treasurer.

The Treasurer reserves the right to waive minor deficiencies in a proposal. The decision as to whether a deficiency will be waived or will require the rejection of a proposal will be solely within the discretion of the Treasurer.

2.19 All proposals shall be firm for a period of ninety (90) days to allow the evaluation committee to fully evaluate all proposals and make selections deemed in the best interest of the Treasurer and the Authority.

2.20 Copyrights By submitting a proposal for lead managing underwriter, the firm agrees that the Treasurer may copy the proposal for purposes of facilitating the evaluation or to respond to requests for public records. The firm consents to such copying by submitting a proposal and warrants that such copying will not violate the rights of any third party. The Treasurer will have the right to use ideas or adaptations of ideas that are presented in the proposals.

2.21 Disposition of Bid Proposals

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All proposals become the property of the Treasurer and the Authority. At the conclusion of the selection process, the contents of all bid proposals will be in the public domain and may be open to inspection by interested parties subject to exceptions provided in Iowa Code Chapter 22 or other applicable law

2.22 Public Records and Requests for Confidentiality The Treasurer’s release of public records is governed by Iowa Code Chapter 22. Firms are encouraged to familiarize themselves with Chapter 22 before submitting a proposal. The Treasurer will copy and produce public records upon request as required to comply with Chapter 22 and will treat all information submitted by a Firm as non-confidential records unless the Firm requests that specific parts of the Proposal be treated as confidential at the time of the submission as set forth herein, AND the Treasurer determines the information is confidential under Iowa or other applicable law.

Any request for confidential treatment of information must be included in the Transmittal letter with the Firm’s proposal. In addition, the Firm must state the specific grounds under Iowa Code Chapter 22 or other applicable law that is the basis for its request for confidential treatment; provide information in support of its request (including any information as may be requested by the Treasurer); and explain why disclosure is not in the best interest of the public. The request for confidential treatment of information must also include the name, address, and telephone number of the person authorized by the Firm to respond to any inquiries by the Treasurer concerning the confidential status of the materials.

Any proposal submitted which contains confidential information must be conspicuously marked on the outside as containing confidential information, and each page upon which confidential information appears must be conspicuously marked as containing confidential information. Identification of the entire proposal as confidential may be deemed non-responsive and disqualify the firm.

If the firm designates any portion of its proposal in response to this RFP as confidential, the firm must submit one copy of its proposal marked “Public Copy” from which the confidential information has been redacted. The confidential material must be redacted in such a way as to allow the public to determine the general nature of the material removed and to retain as much of the proposal as possible. The redacted copy is in addition to the official proposal that the firm submits to the Treasurer for evaluation.

The Treasurer will treat the information marked confidential as confidential information to the extent such information is determined confidential under Iowa Code Chapter 22 or other applicable law by the Treasurer or a court of competent jurisdiction.

The firm’s failure to request confidential treatment of material will be deemed by the Treasurer as a waiver of any right, or expectation of, confidentiality that the Firm may have had.

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2.23 Restrictions on Gifts and Activities Iowa Code chapter 68B contains laws which restrict gifts which may be given or received by state employees and requires certain individuals to disclose information concerning their activities with state government. Firms are responsible for determining the applicability of this chapter to their activities and for complying with these requirements. In addition, Iowa Code Chapter 722.1 provides that it is a felony offense to bribe a public official.

2.24 Construction of RFP with Laws and Rules This RFP and the resulting contract shall be governed by Iowa law and regulations. Changes in applicable laws and rules may affect the selection process or the resulting contract. Firms submitting proposals are responsible for ascertaining pertinent legal requirements and restrictions. Any and all litigation or actions commenced in connection with this RFP shall be brought in the appropriate Iowa forum.

2.25 Release of Claims With the submission of a proposal, each firm agrees that it will not bring any claim or have any cause of action against the Treasurer of State or the Authority based on any misunderstanding concerning the information provided herein or concerning the Treasurer of State’s failure, negligent or otherwise, to provide the firm with pertinent information as intended by this RFP. Additionally, each firm releases each source of information of all claims, whether known or unknown, consulted by the Treasurer to obtain information regarding the firm’s criminal history, credit data, the firm’s product, services, personnel or subcontractors which the Treasurer deems pertinent to this RFP.

2.26 Decision to Proceed The Treasurer reserves the right to decide whether to proceed with any refunding transaction.

2.27 News Release Prohibition Firms shall not issue any news releases or make any statement to the news media pertaining to this RFP or a proposal or contract or work resulting from this RFP without the prior written approval of the Treasurer.

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3. GENERAL TERMS AND CONDITIONS OF SELECTION

3.1 Selection The selection(s) that the Treasurer may make as a result of this RFP will be based upon the proposals submitted by the successful firm(s) to this solicitation. The Treasurer reserves the right to either make the selection without further negotiation with the successful firm(s) or to negotiate terms with the selected firm if the best interest of the Authority would be served.

3.2 The Treasurer may negotiate the compensation of the selected firm based on the final structure utilized in the transaction in order to provide for the optimal execution and pricing of the transaction.

3.3 The Authority will engage the firm(s) subject to the terms and conditions specified by the Treasurer, to include: 3.3.1 The specifications, terms and conditions of the RFP. 3.3.2 The offer contained in the bid. 3.3.3 Any written changes or clarifications made in accordance with the provisions herein. 3.3.4 Any other terms necessary.

3.4 The selection and compensation of underwriter’s counsel is subject to the approval of the Treasurer.

3.5 The firm will not subcontract or assign any of its work under the programs without the written consent of the Treasurer and the Authority.

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4. SCOPE OF SERVICES

4.1 Services to be rendered by the lead managing underwriter with respect to the financing include, but are not necessarily limited to the following:

4.1.1 Work with the Authority and financial advisor to manage and oversee all aspects of the transaction, including the development and implementation of the financing schedule, the process of obtaining ratings, and the procurement of other necessary transaction team participants at the direction of and on behalf of the Authority (e.g., cash-flow and escrow verification agent, IHS Global Inc., etc.).

4.1.2 Develop and recommend to the Authority and financial advisor a plan of finance for the proposed transaction, including developing all analytical models needed to analyze the TSRs and alternative financing structures.

4.1.3 Assist the Authority and its counsel in developing the legal framework for the proposed transaction consistent with the plan of finance, including but not limited to identifying and considering bankruptcy, risk and tax-related issues.

4.1.4 Provide comments on and approve drafts of the Offering Circular and other documents required to market and sell the bonds.

4.1.5 Identify the market and potential investors who are most likely to purchase the offering at rates most favorable to the Authority. Provide proactive investor information and conduct marketing efforts to the firm’s investor base in coordination with the market plan. Engage with co-managers as appropriate to incorporate their participation in the marketing efforts to best allow for the successful execution of the transaction.

4.1.6 Manage the process of marketing and selling the bonds and manage the selected underwriter selling group throughout the marketing and sale process. Provide on-going analysis of market conditions leading up to and through the day of the sale, and advise the Authority with regard to market conditions and timing of the sale of the proposed bonds.

4.1.7 As needed, purchase, or participate in the purchase of, the obligations upon terms and conditions mutually acceptable to the Authority and the Underwriting Team as set forth in a bond purchase agreement.

4.1.8 Utilize the firm’s capital to underwrite bonds, as necessary.

4.2 Services to be rendered by co-managers with respect to the financing include, but are not necessarily limited to the following:

4.2.1 Purchase, or participate in the purchase of, the obligations upon terms and conditions mutually acceptable to the Authority and the Underwriting Team as set forth in a bond purchase agreement.

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4.2.2 Conduct proactive investor information and marketing efforts to the firm’s investor base in coordination with the market plan of the lead managing underwriter.

4.2.3 Provide distribution of the Authority’s bonds to interested investors.

4.2.4 Utilize the firm’s capital to underwrite bonds, as necessary.

4.2.5 Attend and participate in meetings of the Authority and the financing team as requested.

4.2.6 Other related services as requested by the Authority.

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5. FIRM INFORMATION - REQUIRED RESPONSE

All responding firms are required to respond to this section. This section will not be included in the page count limits detailed in section 2.9.3.

5.1 Provide the following information on the firm in tabular format:

5.1.1 Identify the role, as described in Section 1.2, that the firm wishes to be considered for fulfilling as related to this transaction (Lead Managing Underwriter or Co-Manager). Firms proposing as lead managing underwriter will also be considered for a co-manager position during the selection process. 5.1.2 Number of years in business. 5.1.3 The location of the firm headquarters and principal place of business (if different from headquarters). 5.1.4 Specify the location of the office(s) where the firm will perform services under the terms of this RFP. 5.1.5 Number of years’ experience with providing the types of services sought by the RFP. 5.1.6 Provide contact information for at least two (2) government issuers of tobacco bonds your firm has worked with directly since January 2016.

5.2 Provide a list of the proposed team members from the firm who would be involved in this transaction, including:

5.2.1 Full Name 5.2.2 Education 5.2.3 Years of experience in public finance and employment history 5.2.4 Experience with respect to tobacco settlement bonds 5.2.5 Expected role in this transaction.

5.3 Provide the following financial information, in tabular form, as of the firm’s most recent reporting quarter:

5.3.1 Total equity capital position and excess net capital position. 5.3.2 The maximum amount of bonds the firm may underwrite based on this excess net capital amount. 5.3.3 Since January 1, 2019 with respect to tobacco securitization bonds, provide the total amount of bonds the firm has traded in the secondary market and indicate the firm’s average daily inventory.

5.4 Describe your firm’s willingness to commit capital to underwrite bonds, including specific examples of your firm’s having committed capital (tobacco settlement transactions are preferred).

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5.5 Describe any investigative, disciplinary or enforcement actions pending against your firm and information on any such investigations which concluded with an enforcement or disciplinary action against your firm in the last three years.

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6. TRANSACTION PROPOSAL - REQUIRED RESPONSE

6.1 The questions under section 6.1 are required responses from ALL proposing firms (firms that are responding for the role of lead managing underwriter OR co-manager).

6.1.1 Provide a summary of the tobacco transactions for which the firm has served as an underwriter since January 2016. For each transaction, identify the firm’s specific role (book- runner, joint book-runner, co-senior manager, co-manager, or selling group member) and include the issuer name, date, par amount, tax status, term and final maturity.

6.1.2 List any tobacco-related transactions on which your firm is currently engaged and which are expected to price in 2021, as well as your firm’s role in the transaction.

6.1.3 Describe your firm’s recommended marketing approach, including, but not limited to, a discussion of the depth of investor demand for a large tobacco securitization transaction in the post COVID-19 pandemic market. Describe your firm’s distribution capabilities that would lead to a successful execution of your proposed approach.

6.1.4 Provide any suggestions for enhancing the effectiveness of the underwriting team.

6.1.5 Describe why your firm should be selected as an underwriter for the Authority’s transaction. In your description, please include the key strengths of your firm and personnel that distinguish you from other firms. Describe any particular expertise your firm could provide regarding tobacco securitization.

6.2 Note: Only firms responding for the role of lead managing underwriter are required to provide responses to the questions in section 6.2.

6.2.1 Describe your firm’s recommended structural approach, including, but not limited to, a discussion of the legal / tax implications of the bond structures, as well as strategies related to ratings structures and the ratings procurement process.

6.2.2 Provide a description of how your proposed strategy is structured to avoid the expected default and meet requisite bond covenants, and legal/tax requirements, including the additional bonds test, debt equity test, and any other requirements relevant to the structure described in question 6.2.1.

6.2.3 Provide a summary of the key financial benefits of your transaction proposal, including the delay or avoidance of default, earlier receipt of future residual TSRs versus current projections, increased resiliency of newly issued bonds against future consumption declines, etc. Assume a 5.0% discount rate for any PV calculation on near-term or long-term debt service savings / receipt of residual TSRs.

6.2.4 Discuss other bond and tobacco market risks and sensitivities to your proposed strategy including pricing levels, domestic cigarette consumption announcements or any other relevant factors that could impact the viability of a refunding or new money transaction.

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6.2.5 Provide a detailed marketing plan for the transaction.

6.2.6 Describe your firm’s approach to pricing tobacco securitization bonds.

6.2.7 How many co-managers would you recommend be included in the underwriting team?

6.2.8 If it is determined to proceed, the Treasurer and Authority expect to take an accelerated path towards the execution of a transaction. Please provide a draft outline of a financing schedule with proposed timelines for key components of a transaction.

6.3 Note: Only firms responding for the role of lead managing underwriter are required to provide responses to the questions in section 6.3. (This section will not be included in the page count limits detailed in section 2.9.3.)

6.3.1 Please provide a one page summary of key assumptions; a one page comparative summary of results; and detailed cash flows of your firm’s proposed transactional strategy. The analysis should be based on the IHS Global Inc. consumption projection report published for the 2020 Michigan Finance Authority transaction (2007 Sold Tobacco Receipts), dated October 8, 2020. Please include the following with your analysis:

6.3.1.1 Interest rate assumptions detailing coupons and yields on a maturity-by- maturity basis including spreads to AAA MMD (or US Treasury for taxable bonds) as of close of business Friday, January 22, 2021.

6.3.1.2 Detailed bond sizing reports (e.g., DBC reports) specifying estimated sources and uses of funds, bond pricing assumptions, summary of refunded bonds, debt service, bond summary statistics (including transaction PV01), appropriate escrow reports, maturity-by-maturity takedown levels, detailed underwriter’s expenses report, and any other reports necessary to provide sufficient detail to the transaction structure and core assumptions.

6.3.1.3 Pro forma model cash flows detailing the proposed transactions, including detailed TSR assumptions/projections, break-even results (pre-/post-refunding), pre- and post-refunding cash flows, and details related to any other key assumptions and results that are important factors to your proposal.

6.3.1.4 Provide a discussion of non-traditional financing vehicles that may be necessary to successfully execute a transaction and your firm’s approach and experience with these methods (e.g. open market purchase of outstanding bonds, bond exchange, etc.). Please include in this discussion the market and other drivers which may necessitate their use.

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7. COST PROPOSAL

Only firms responding for the role of lead managing underwriter are required to respond to this section. This section will not be included in the page count limits detailed in section 2.9.3. The selected firms will only be compensated upon successful completion of the transaction. Fees and expenses will only be paid from bond proceeds.

7.1 Please provide a detailed description and breakdown of your proposed fees as lead managing underwriter for the contemplated tobacco transaction. Delineate the following cost components as applicable:

7.1.1 Takedown (maturity-by-maturity) 7.1.2 Underwriter’s and other associated expenses (provide detailed budget) 7.1.3 Underwriter’s Counsel(s)—Provide an indication of the likely range of fees based on your experience with other transactions

7.2 Please state the basic assumptions used in developing these figures and any variables that might affect your provided fee levels.

The takedown levels provided in the respondent’s proposals may be used to form the basis for the underwriter’s compensation on the transaction. Changes to takedown levels provided in proposals will be made at the discretion of the Treasurer. Any such changes will be negotiated as needed, on a mutually agreed upon basis, based on the final structure and components of the transaction in order to provide optimal results for the Authority.

7.3 Please indicate syndication rules and designation policies that you think appropriate for optimal execution of the transaction. Please note that underwriter compensation and all syndication and designation rules and policies are subject to the approval of the Treasurer.

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8. EVALUATION CRITERIA

8.1 Introduction Selection of a firm to serve as lead managing underwriter and other firms to serve as co-senior managers or co-managers will be based on the criteria described below. A firm’s proposal should provide clarity and detail to allow the evaluation committee to adequately judge the expertise, experience, and capabilities of the firm and make an appropriate recommendation to the Treasurer. The purpose of the evaluation process is not necessarily to select the firm with the lowest cost, but rather to select the firm with the best combination of attributes to perform the services listed in Section 4 – Scope of Services.

8.2 Evaluation Steps The evaluation and selection process shall consist of the following:

8.2.1 Review of the bid proposals to assess compliance with mandatory requirements 8.2.2 Detailed evaluation of the experience of the firm and bankers assigned to this transaction, the proposed services, structure, solutions offered, and cost. 8.2.3 Evaluation committee recommendation to the Treasurer 8.2.4. Selection of a firm(s) by the Treasurer

8.3 Evaluation Criteria The evaluation committee will evaluate all proposals and make a recommendation to the Treasurer using, but not limited to, the following criteria, which are listed in no particular order.

8.3.1 Experience and Qualifications a. Relevant experience of firm in tax-exempt and taxable tobacco securitization financing. b. Relevant experience, knowledge, and expertise of assigned bankers and underwriters as indicated in the response and by references. c. Reputation of the firm as evidenced by references obtained by the Authority.

8.3.2 Technical Proposal a. Well-developed and coherent financing, structuring and marketing plans along with the staff and technical resources to execute the plans. b. Clarity and creativity evidenced by the response to the RFP. c. Ability to work well with other team members in a cooperative manner. d. Other information provided in response to Section 6 of the RFP.

8.3.3 Cost Proposal a. The firm’s cost proposal will be evaluated in relation to other fee proposals received. The winning proposal may not be the proposal with the lowest cost.

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ATTACHMENT A - BID COMPLIANCE AND CERTIFICATION FORM

By submitting a proposal in response to the Request for Proposals (“RFP”) issued by the Treasurer of Iowa for an Underwriter for a Refunding of the 2005 Tobacco Bonds, the undersigned certifies the following:

1. I certify that I have the authority to legally bind the investment banking firm (the Firm) indicated below to the specific terms and conditions and technical specifications required in this RFP and offered in the Firm’s proposal.

2. I understand that by submitting this proposal, the investment banker signing below agrees to the following:

2.1 The Firm will provide services which meet the requirements of this RFP.

2.2 The Firm will provide the services at the prices quoted by the investment banker in their proposal, subject to further negotiation at the discretion of the Treasurer.

3. I certify that no attempt has been made or will be made the Firm to induce any other firm to submit or not to submit a proposal for the purpose restricting competition.

4. I certify that the information contained in the proposal is true and accurately portrays all aspects of the Firm’s ability to provide the services described in the RFP. The investment banker has not made any knowingly false statements in its proposal.

5. I am aware that any substantive misinformation or misrepresentation may disqualify the Firm’s proposal from further consideration.

6. I hereby certify that I have not had discussions with any of the municipal credit rating services subsequent to the date of receipt of this RFP about the Authority’s intentions. Investment banker acknowledges this condition and prohibition will extend from the date of receipt of this RFP until the conclusion of the selection process.

7. I hereby certify total compliance with all terms, conditions and specifications of this RFP except as expressly stated below. (Add a separate page if necessary.)

RFP Item Number Comments

Firm Name: ______

Address: ______

______

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Authorized Signature: ______

Printed Name: ______

Title: ______

Telephone: ______

Email: ______

Date: ______

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ATTACHMENT B - AUTHORIZATION TO RELEASE INFORMATION

To: Treasurer of the State of Iowa

The undersigned, on behalf of the investment banking firm (the “Firm”) designated below, hereby authorizes the Treasurer to obtain information regarding the firm’s performance on other contracts, agreements or other business arrangements, its business reputation, and any other matter pertinent to evaluation and the selection of a successful firm in response to this Request for Proposal.

The Firm hereby releases, acquits and forever discharges the State of Iowa, the Treasurer, and the Authority and their officers, directors, employees and agents from any and all liability whatsoever, including all claims, demands and causes of action of every nature and kind affecting the firm that it may have or ever claim to have relating to information, data, opinions, and references obtained by the Treasurer in the evaluation and selection of a successful investment banker in response to this Request for Proposal.

The Firm authorizes representatives of the Treasurer to contact any and all of the persons, entities, and references which are, directly or indirectly, listed, submitted, or referenced in the firm’s proposal submitted in response to this Request for Proposal.

The Firm further authorizes any and all persons and entities to provide information, data, and opinions with regard to the firm’s performance under any contract, agreement, or other business arrangement, the firm’s ability to perform, the firm’s business reputation, and any other matter pertinent to the evaluation of the firm. The Firm, and its partners, officers, directors, employees and agents hereby releases, acquits and forever discharges any such person or entity and their officers, directors, employees and agents from any and all liability whatsoever, including all claims, demands and causes of action of every nature and kind affecting the undersigned that it may have or ever claim to have relating to information, data, opinions, and references supplied to the Treasurer in the evaluation and selection of a successful firm in response to this Request for Proposal.

A photocopy or PDF of this signed Authorization is as valid as an original.

Sincerely,

______Name of Firm

______Name and Title of Individual Authorized to Legally Bind the Firm

______Signature of Individual Authorized to Legally Bind the Firm

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