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Term/Call Feature: <br />The Bonds are being issued for a term of 15 years. Principal on the Bonds will be due on <br />February 1 in the years 2027 through 2041. Interest will be due every six months beginning <br />February 1, 2026. <br />The Bonds will be subject to prepayment at the discretion of the City on February 1, 2035 or <br />any date thereafter. <br />Bank Qualification: <br />Because the City is expecting to issue no more than $10,000,000 in tax exempt debt during <br />the calendar year, the City will be able to designate the Bonds as "bank qualified" obligations. <br />Bank qualified status broadens the market for the Bonds, which can result in lower interest <br />rates. <br />Rating: <br />The City's most recent bond issues were rated by S&P Global Ratings. The current rating on <br />those bonds is "AA+". The City will request a new rating for the Bonds. <br />If the winning bidder on the Bonds elects to purchase bond insurance, the rating for the issue <br />may be higher than the City's bond rating in the event that the bond rating of the insurer is <br />higher than that of the City. <br />Basis for Recommendation: <br />Based on your objectives, financial situation and need, risk tolerance, liquidity needs, <br />experience with the issuance of Bonds and long-term financial capacity, as well as the tax <br />status considerations related to the Bonds and the structure, timing and other similar matters <br />related to the Bonds, we are recommending the issuance of Bonds as a suitable option. <br />Method of Sale/Placement: <br />We are recommending the Bonds be issued as municipal securities and offered through a <br />competitive underwriting process. You will solicit competitive bids, which we will compile on <br />your behalf, for the purchase of the Bonds from underwriters and banks. <br />An allowance for discount bidding will be incorporated in the terms of the issue. The discount <br />is treated as an interest item and provides the underwriter with all or a portion of their <br />compensation in the transaction. <br />If the Bonds are purchased at a price greater than the minimum bid amount (maximum <br />discount), the unused allowance may be used to reduce your borrowing amount. <br />Premium Pricing: <br />In some cases, investors in municipal bonds prefer "premium" pricing structures. A premium <br />is achieved when the coupon for any maturity (the interest rate paid by the issuer) exceeds <br />the yield to the investor, resulting in a price paid that is greater than the face value of the <br />Presale Report May 12, 2025 <br />City of Lino Lakes, Minnesota Page 2 <br />