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23 <br />Basis for Recommendation: <br />Based on our knowledge of your situation, your objectives communicated to <br />us, our advisory relationship as well as characteristics of various municipal <br />financing options, we are recommending the issuance of General Obligation <br />Improvement Bonds as a suitable financing option because this is the most <br />overall cost effective option that still maintains future flexibility for the <br />repayment of debt. <br />Method of Sale /Placement: <br />In order to obtain the lowest interest cost to the City, we will solicit <br />competitive bids for purchase of the Bonds from local banks in your area and <br />national underwriters. <br />We have included an allowance for discount bidding equal to 1.20000% of the <br />principal amount of the issue. The discount is treated as an interest item and <br />provides the underwriter with all or a portion of their compensation in the <br />transaction. <br />If the Bonds are purchased at a price greater than the minimum bid amount <br />(maximum discount), the unused allowance may be used to lower your <br />borrowing amount. <br />Premium Bids: Under current market conditions, most investors in municipal <br />bonds prefer "premium" pricing structures. A premium is achieved when the <br />coupon for any maturity (the interest rate paid by the issuer) exceeds the yield <br />to the investor, resulting in a price paid that is greater than the face value of <br />the bonds. The sum of the amounts paid in excess of face value is considered <br />"reoffering premium." <br />The amount of the premium varies, but it is not uncommon to see premiums <br />for new issues in the range of 2.00% to 10.00% of the face amount of the <br />issue. This means that an issuer with a $2,000,000 offering may receive bids <br />that result in proceeds of $2,040,000 to $2,200,000. <br />For this issue of Bonds we have been directed to use the premium to reduce <br />the size of the issue. The adjustments may slightly change the true interest <br />cost of the original bid, either up or down. <br />You have the choice to limit the amount of premium in the bid <br />specifications. This may result in fewer bids, but it may also eliminate large <br />adjustments on the day of sale and other uncertainties. <br />Review of Existing Debt: <br />We have reviewed all outstanding indebtedness for the City and find that there <br />are no refunding opportunities at this time. <br />We will continue to monitor the market and the call dates for the City's <br />outstanding debt and will alert you to any future refunding opportunities. <br />Continuing Disclosure: <br />Because the City has more than $10,000,000 in outstanding debt (including <br />this issue) and this issue is over $1,000,000, the City will be agreeing to <br />provide certain updated Annual Financial Information and its Audited <br />Financial Statement annually as well as providing notices of the occurrence of <br />certain "material events" to the Municipal Securities Rulemaking Board (the <br />"MSRB "), as required by rules of the Securities and Exchange Commission <br />+� Presale Report March 24, 2015 <br />City of St. Anthony, Minnesota Page 2 <br />