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Landes, City TreasurerReference Numbers: Page 2 of 3OFact Sheet Prepared by: Dan Grandcolas, Treasury Division / Finance Department Page 3 of 3 Page 1 of 3FApproving the conversion of IDAVariable Rate Demand Tax-Exempt RevenueJBonds (Kansas City Downtown Redevelopment District), Series 2005A to fixed$Series 2005B and Series 2006A Bonds.variable rate mode.:Approving to fix rates on IDA bonds previously issued in aQinterest rate and the entering into one or more swap agreement agreements for theR y f~zKc ]uccz  ,8=C1MV_egov  dMbP?_*+%DH&Q?'?((\?)?M\\fn-server\ch23300S oF,,LetterPRIV0''''\KhCQMC:\WINNT\system32\spool\DRIVERS\W32X86\3\KM3300.PPDd  SYSASYSASYSASYSASYSACourier2H-publicfoz"F,,U} } } } 1} } } } U} *} } } } *} } }  } }  @@@@ ?@  @ @ @ @@@C@@@@@@!@@@@@@@,@@ ~  ;.A 5 5  5 5  IH &     DJRR  HJRR ETRM  GTRM TI$TRS T F$RR & T ] V f """""""""r # $ %& e7 %(%%%%%%%Y ) * O N + ,O N ) ,O N),ON)",OLMLLLLLLLb) , c JiJJJJJJJK) , e LLLLLLLLLN) , g=LLLLLLLLLN)",OLLLLLLLLLN&)UU,d^^^^^^^^^b~_` c k l ___JJJJKXVUY e m ]UUULLLLN&}LUYjmLUUUUUUUY&}LUYjmhUUUUUUUY&}LUYjmhUUUUUUUY&}LUYjmVLLLLLLLN&}LUYOZLLLLLLLLN&mLUYda^^^^^^^^bmLUY -U ]UUUUUUU,&mLUY/.,mLUY7 ,D lN*`LL66*LT(&&&0FFF0*TT******T* @!@"@#@$@%@&@'@(@)@*@+@,@-@.@/@0@1@2@3@4@5@6@7@8@9@:,;,<,=,>,?,& mLUY8999999999:!mLUY !-!,"mLUY "-" ";6" " " ,&#mLUY7<$mLUY7= $ $ ,&%mLUY7,&mLUY7 &&,'mLUY7'*(mLUY (0(1111111114)mLUY )-) ))6,*mLUY *-*,+mLUY7= +  + = + += +>8$,mLUY7 ,<9-mLUY7? - - ,.mLUY7 . . ,/mLUY /c/_________`0mLUY 0e 0U?U 0 ]0 UUUUUY&1mLUYnUUUVUUUUUY2mLUYnU?U 2 ]2 UUUUUY&3mLUYnUUUVUUUUUY4mLUYnU?U 4 ] 4 UUUUUY&5mLUYnUUUVUUUUUY6mLUYnU?U 6 ]!6 UUUUUY&7mLUYnUUUVUUUUUY8mLUYnU?U 8 ]"8 UUUUUY&9mLUYnULULUUUUUY:mLUYnU?L : ]#: LLLLUY&;mLUYnUUL]LLLLUY&<mLUYnUUL]LLLLUY&=mLUYnUUL]LLLLUY&>mLUYnUUL]LLLLUY&?mLUYnUUL]LLLLUYD l*@h*@*@"@T@`6@@@V*@*@*@*@*@****@,A,B,C,D,E,F,G,HJ I;@J@K@L@M@N@O@P@Q@R@S@T@U@V@ W@ X@Y@Z@[@\@]@^@_,&@mLUYnUUL]LLLLUY&AmLUYnUUL]LLLLUY&BmLUYnUUL]LLLLUY&CmLUYnUUL]LLLLUY&DmLUYnUUL]LLLLUY&EmLUYnUUL]LLLLUY&Fyd^^^^^^^^^bGU G|C"GUULLLLLLLLLLL HH H$H H IxVVW I'%I%@%%%%%%%&JZVU, J-& JA J B' J C J B( J,KmL,DK ,L}L,DL ,MmL,DM ,NmL,DN ,O)L,/O ,P)L, P0)P!!!!111114Q)L, Q-*Q ,R)L, R-+R ,S)L,/S ,T)L,/T ,U)L,/U ,&V)L,EFFFF222223W)L, Wp,WX)L, Xe-X%GG%%%%%%qY)L, Ye. 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The Company intends to create a seven square block, 550,000 square foot entertainment district that will incorporate restaurant, retail, and entertainment venues. The district calls for approximately 100,000 square feet of entertainment space, 105,000 square feet of retail space, 308,000 square feet of restaurants, and 40,000 square feet of service space. In addition to the entertainment district, H&R Block has moved their corporate headquarters to downtown and is the centerpiece of the entertainment district. The City entered into a a Master Development Agreement on April 27, 2004, for development of the entertainment district. The City did not issue bonds in connection with the financing of H&R Block headquarters building. On April 27, 2004, the City executed a Master Development Agreement between the City and Kansas City Live, LLC (an affiliate of The Cordish Company) pursuant to Ordinance No. 031414 the City Council passed on December 18, 2003. The Master Development Agreement, as amended, governs the contractual obligations and relationship of the City and The Cordish Company with respect to the entertainment district ("Project"). Among other things, the Master Development Agreement calls the Bonds to be issued on behalf of the City to finance the City's obligations pursuant to the Master Development Agreement. On behalf of the City, the IDA issued $180 million of its Variable Rate Demand Tax-Exempt Revenue Bonds ("Bonds") in March 2005 and $115 million in July 2006 for the purpose of providing funds to pay the costs of acquiring and clearing property and designing, improving, constructing and equipping necessary infrastructure and improvements including, but not limited to, public parking facilities. <0bXHXqX)DDn   D*  @Text 9$IU] *  x< This ordinance will approve the conversion of $115.015 million of the Variable Rate Demand Tax-Exempt Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2005A to fixed interest rate bonds. It will also authorize and approve certain documents and actions in connection with the issuance of the Bonds and entering into certain agreements to synthetically convert Series 2005B and Series 2006A to fixed rate bonds. The objective of the "restructuring" of the currrent portfolio is to produce a more balanced mix of fixed (conventional bonds and using interest rate swaps) and variable rate debt. Variable Rate to Fixed Rate Conversion Transaction The first step of the restructuring is to convert approximately $115.015 million of the KC Live debt (Series 2005A) into fixed rate debt. The financing team has amended the bond indenture to allow for this conversion to take place using the existing bond documents. The City would issue conventional fixed rate bonds and use the proceeds to refund the Series 2005A Bonds. The new bonds are expected to be delivered in mid-May 2007, with Ambac insuring the bonds and Oppenheimer, the current remarketing agent, serving as the senior underwriter. Swap Transaction The next step is to employ interest rate swaps to convert $134.485 million KC Live debt (Series 2005B and Series 2006A) to synthetic fixed rate debt. Under the expected terms of the interest rate swaps, the City will make a fixed rate payment to the swap counterparties and receive a variable rate payment from the swap counterparties. The variable rate payments are expected to offset the variable rate that the City pays on the underlying Series 2005B and Series 2006A Bonds. Thus, the net cashflow is essentially a fixed rate obligation. Once the City negotiates the swap documents with a lead counterparty, the City will use these documents to competitively bid the swap rate among a group of pre-qualified firms which include UBS Financial Services Inc., Rice Financial Products Company (a non-certified MBE firm), Bank of America N.A. and Lehman Brothers Inc.. This transaction is expected to occur in mid-May 2007. Please refer to the attached Summary of Swap Agreement. Variable Rate Debt No further action is required related to the $45.500 million Series 2006B Bonds. These Bonds will remain in variable rate mode with their interest rates periodically reset. Documents The City will enter into a Series 2005B and Series 2006A Supplement to the Financing Agreement in which the City agrees that the payments it makes to cover debt service and other additional payment requirements under the Indenture on these series of Bonds will include payments to cover the obligations under the swap agreements, all subject to annual appropriation. The City will also enter into a continuing disclosure agreement whereby the City agrees to provide certain financial information for the benefit of the owners of the applicable series of Bonds. <xCXe X@dd ????mnd Swap v3.xls,t@00t@t@}0090>0U0L?0?0?yL0@0qq      7 Oh+'0HPdt  estanleydgrandMicrosoft Excel@Ŝ:@d*@:՜.+,0 PXp x City of KCMO GeneralP1_P2_General!Print_Area  Worksheets Named Ranges  !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXY[\]^_`acdefghiRoot Entry FWorkbook޲SummaryInformation(ZDocumentSummaryInformation8b