D.A. Davidson & Co.: Providing Financial Solutions for Communities
D.A. Davidson & Co., a full-service brokerage and investment banking firm, specializes in financing projects for communities across the United States. Their Public Finance team has completed numerous negotiated transactions and ranks among the top firms nationally. Senior Vice President Jerry Spethman leads their South Dakota investment banking team, offering expert guidance on municipal finance.
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LENNOX SCHOOL DISTRICT NO. 41-4 GENERAL OBLIGATION BONDS AN OVERVIEW PRESENTED BY: Jerry Spethman Senior Vice President D.A. Davidson & Co. 450 Regency Parkway, Suite 400 Omaha, NE 68114 Office (866) 466-9368 E-mail: jspethman@dadco.com
D.A. Davidson & Co. is a full-service brokerage and investment banking firm with a Fixed Income Capital Markets Group that specializes in financing projects for communities across the United States. From securing funding for a new elementary school building to structuring multi-million-dollar financings for professional athletic facilities, we are committed to strengthening infrastructure, expanding businesses and enriching the lives of the people in our communities. Our bankers are passionate about providing service excellence and transaction follow-through to guide you through the complexities of project funding. Since 1982, the firm has underwritten in excess of $3 billion of bonds and certificates for South Dakota issuer clients.
PUBLIC FINANCE RANKINGS National Negotiated Rankings: In 2022 D.A. Davidson & Co. completed 292 negotiated transactions totaling $3.6 billion. This ranked D.A. Davidson 5th highest nationally in number of transactions. Number of Issues Mkt. Share Par Amount (US$ mil) Lead Manager Rank Stifel Nicolaus & Co Inc Piper Sandler & Co RBC Capital Markets Raymond James D A Davidson & Co Robert W Baird & Co Inc BofA Securities Inc J P Morgan Securities LLC Wells Fargo & Co 701 373 345 311 292 202 197 153 136 1 2 3 4 5 6 7 8 9 15.3 8.2 7.5 6.8 6.4 4.4 4.3 3.4 3.0 16,001.8 11,658.9 23,019.6 10,793.3 3,602.4 4,036.7 28,439.7 28,889.0 15,041.2
PUBLIC FINANCE RANKINGS National Negotiated Rankings: In 2022 D.A. Davidson & Co. completed 292 negotiated transactions totaling $3.6 billion. This ranked D.A. Davidson 18th highest nationally in par amount of transactions. Par Amount (US$ mil) Mkt. Share Number of Issues Lead Manager Rank J P Morgan Securities LLC BofA Securities Inc RBC Capital Markets Citi Morgan Stanley Stifel Nicolaus & Co Inc Goldman Sachs & Co LLC Wells Fargo & Co Barclays Jefferies LLC Piper Sandler & Co Raymond James Siebert Williams Shank & Co Ramirez & Co Inc Loop Capital Markets UBS Financial Services Inc Robert W Baird & Co Inc D A Davidson & Co 28,889.0 28,439.7 23,019.6 21,142.3 20,013.9 16,001.8 15,971.8 15,041.2 13,857.4 12,559.7 11,658.9 10,793.3 9,525.0 6,992.8 5,399.2 4,889.6 4,036.7 3,602.4 1 2 3 4 5 6 7 8 9 10.3 10.1 8.2 7.5 7.1 5.7 5.7 5.4 4.9 4.5 4.2 3.8 3.4 2.5 1.9 1.7 1.4 1.3 153 197 345 122 131 701 94 136 98 70 373 311 38 49 41 39 202 292 10 11 12 13 14 15 16 17 18
PERSONNEL PERSONNEL Jerry Spethman Senior Vice President, Public Finance Banker Jerry Spethman is an investment banker with a focus on school districts and municipalities throughout the Midwest and northern Plains states. He has worked in the municipal finance business since 1998 and has underwritten both tax-exempt and taxable bonds for the capital needs of issuer clients in South Dakota, Nebraska, Iowa, North Dakota and Arizona. As the lead member of the firm s South Dakota investment banking team, he has helped guide issuers through the election process, new money transactions and refinancing/restructuring outstanding debt. In addition to holding FINRA Securities Licenses of Series 7, 50, 53 and 63, Jerry holds a bachelor s degree from Creighton University and a law degree from Creighton University School of Law.
Financing Participants All Transactions SCHOOL DISTRICT SUPERINTENDENT, BUSINESS MANAGER AND BOARD OF EDUCATION ARCHITECTURAL FIRM PROVIDES DRAFTING SERVICES, CONSTRUCTION COST ESTIMATES AND OVERSEES BID PROCESS ON BEHALF OF THE SCHOOL DISTRICT BOND COUNSEL LAW FIRM REPRESENTS THE SCHOOL DISTRICT, DRAFTS RESOLUTION AUTHORIZING THE ISSUANCE OF THE BONDS/CERTIFICATES, ISSUES OPINION ON TAX EXEMPT STATUS OF BONDS/CERTIFICATES AND VERIFIES THE BONDS/CERTIFICATES HAVE BEEN VALIDLY ISSUED PURSUANT TO STATE LAW UNDERWRITING FIRM STRUCTURES THE FINANCING OF BONDS/CERTIFICATES, SELLS THE BONDS/CERTIFICATES AND CLOSES THE FINANCING OF THE BONDS/CERTIFICATES REGISTRAR/PAYING AGENT BANK WHICH ENSURES THE PRINCIPAL AND INTEREST PAYMENTS MADE BY THE SCHOOL DISTRICT ON THE BONDS/CERTIFICATES ARE SENT TO THE PURCHASERS IN A TIMELY FASHION
Debt Limitations Bonds and Capital Outlay Certificates UNDER THE SOUTH DAKOTA CONSTITUTION THE TOTAL INDEBTEDNESS OF A SCHOOL DISTRICT MAY NOT EXCEED 10% OF THE ASSESSED VALUE OF THE PROPERTY WITHIN SUCH SCHOOL DISTRICT. SOUTH DAKOTA LAW FURTHER PROVIDES THAT THE PORTION OF THE TOTAL DEBT REPRESENTED BY CAPITAL OUTLAY CERTIFICATES MAY NOT EXCEED 3% OF A SCHOOL DISTRICT S TAXABLE VALUATION.
LENNOX SCHOOL DISTRICT NO. 41-4 DEBT MARGIN AS OF FEBRUARY 13, 2023 The District s debt margin is as follows: Constitutional Debt Limit (10% of Assessed Value) Less Outstanding Capital Outlay Certificates Less Outstanding General Obligation Bonds* (1,185,000) Debt Margin $101,248,932 (11,480,000) $88,583,932 *SERIES 2019 FINAL PRINCIPAL PAYMENT DUE 07/01/23
LENNOX SCHOOL DISTRICT NO. 41-4 C.O. CERTIFICATE STATISTICS AS OF 2/13/2023 2022 Pay 2023 Taxable Valuation: Maximum Borrowing Percentage: Maximum Borrowing Amount: 2022 Pay 2023 Taxable Valuation: Max Per Project Borrowing Percentage*: Max Per Project Borrowing Amount*: Outstanding C.O. Certificate Principal: $928,363,370 x 3.00% $27,850,901 $928,363,370 x 1.50% $13,925,450 $11,480,000 *Not subject to referendum
General Obligation Voter Approved Bonds FINANCING OPTION: The question of issuing school district bonds may be submitted at a special election or such question may be voted on at an election held in conjunction with the statewide primary or statewide general election. General Obligation Bonds Authorized under South Dakota Codified Laws, Section 6-8B-2 and 13-19-9, as amended: Max Term: 50 Years Authority: 60% majority vote in favor of issuing the bonds by District patrons voting at an election Max Levy: Unlimited Security: All taxable property located within the boundaries of the school district General Obligation bonds allow the District to pledge its ad valorem taxing authority towards the repayment of the debt. No limitation on the rate or amount of the levy needed to make payments on the bonds.
LENNOX SCHOOL DISTRICT NO. 41-4 20-YEAR GENERAL OBLIGATION BOND EXAMPLE - ASSUMPTIONS PROJECTED CLOSING DATE: PROJECTED BORROWING AMOUNT: MAXIMUM ANNUAL PAYMENT AMOUNT: BOND LEVY STARTING FY 2023-24: DISTRICT S 2022 PAY 2023 TAXABLE VALUE: NET BOND PROCEEDS FOR PROJECT: JULY13, 2023 $16,500,000 $1,554,000 $1.18 PER $1,000 $928,363,670 $17,585,786.95 25-YEAR GENERAL OBLIGATION BOND EXAMPLE - ASSUMPTIONS PROJECTED CLOSING DATE: PROJECTED BORROWING AMOUNT: MAXIMUM ANNUAL PAYMENT AMOUNT: BOND LEVY STARTING FY 2023-24: DISTRICT S 2022 PAY 2023 TAXABLE VALUE: NET BOND PROCEEDS FOR PROJECT: JULY13, 2023 $16,500,000 $1,401,750 $1.01 PER $1,000 $928,363,670 $17,365,365.55
$16,000,000* Lennox School District No. 41-4 General Obligation Bonds, Series 2023 (Preliminary Election & Financing Timeline - May 9th Bond Election Date) March 13, 2023 Resolution calling Bond Election adopted by Board of Education March 20, 2023 First meeting of citizen's committee March 27, 2023 Second meeting of citizen's committee April 13, 2023 First public meeting with community April 20, 2023 Second public meeting with community April 27, 2023 Third public meeting with community, if necessary May 9, 2023 Bond Election May 11, 2023 Board of Education canvasses the results of the Bond Election May 22, 2023 Board of Education adopts resolution authorizing issuance of the Bonds May 30, 2023 Rating request submitted to S&P Global Ratings (S&P) June 8, 2023 Conference call with S&P rating analysts June 9, 2023 Submit request for bond insurance June 13, 2023 Rating received from S&P June 14, 2023 Commitment received from bond insurer June 16, 2023 Preliminary Official Statement deemed final June 19, 2023 Preliminary Official Statement available for distribution June 20, 2023 Davidson begins marketing efforts on Bonds June 27, 2023 Davidson takes indications of interest June 28, 2023 Davidson formally takes orders for the District's Bonds June 29, 2023 Bond Purchase Agreement (BPA) signed July 13, 2023 Closing ______________________ *Preliminary; subject to change. Prepared by Jerry Spethman, SVP, D.A. Davidson & Co.
BOND ELECTION Lennox School District 41-4 Tuesday, May 09, 2023 Date of publications: Days From Voter Registration Days From Election not before not after Friday Resolution Authorizing Election 3/13/23 Absentee Ballot Voting Start First Notice of Voter Registration 2nd Notice of Voter Registration VOTER DEADLINE 1st Notice of Election 2nd Notice of Election Ballot ELECTION 46 Friday, March 24, 2023 Wednesday, April 5, 2023 Wednesday, April 12, 2023 Monday, April 24, 2023 Wednesday, April 26, 2023 Wednesday, May 3, 2023 Wednesday, May 3, 2023 Tuesday, May 9, 2023 Sunday, April 2, 2023 Sunday, April 9, 2023 Friday, April 7, 2023 Friday, April 14, 2023 Monday, April 24, 2023 Friday, April 28, 2023 Friday, May 5, 2023 19 12 15 13 6 6 Saturday, April 22, 2023 Saturday, April 29, 2023 Tuesday, May 9, 2023 ELECTION
$16,000,000* Lennox School District No. 41-4 General Obligation Bonds, Series 2023 (Preliminary Election & Financing Timeline - September 12th Bond Election Date) July 10, 2023 Resolution calling Bond Election adopted by Board of Education July 17, 2023 First meeting of citizen's committee July 24, 2023 Second meeting of citizen's committee August 16, 2023 First public meeting with community August 23, 2023 Second public meeting with community August 30, 2023 Third public meeting with community, if necessary September 12, 2023 Bond Election September 14, 2023 Board of Education canvasses the results of the Bond Election September 26, 2023 Board of Education adopts resolution authorizing issuance of the Bonds October 2, 2023 Rating request submitted to S&P Global Ratings (S&P) October 10, 2023 Conference call with S&P rating analysts October 11, 2023 Submit request for bond insurance October 24, 2023 Rating received from S&P October 25, 2023 Commitment received from bond insurer October 26, 2023 Preliminary Official Statement deemed final October 27, 2023 Preliminary Official Statement available for distribution October 30, 2023 Davidson begins marketing efforts on Bonds November 6, 2023 Davidson takes indications of interest November 7, 2023 Davidson formally takes orders for the District's Bonds November 8, 2023 Bond Purchase Agreement (BPA) signed November 21, 2023 Closing ______________________ *Preliminary; subject to change. Prepared by Jerry Spethman, SVP, D.A. Davidson & Co.
BOND ELECTION Lennox School District 41-4 Tuesday, September 12, 2023 Date of publications: Days From Voter Registration Days From Election not before not after Friday Resolution Authorizing Election 7/10/23 Absentee Ballot Voting Start First Notice of Voter Registration 2nd Notice of Voter Registration VOTER DEADLINE 1st Notice of Election 2nd Notice of Election Ballot ELECTION 46 Friday, July 28, 2023 Wednesday, August 9, 2023 Wednesday, August 16, 2023 Monday, August 28, 2023 Wednesday, August 30, 2023 Wednesday, September 6, 2023 Wednesday, September 6, 2023 Tuesday, September 12, 2023 Sunday, August 6, 2023 Sunday, August 13, 2023 Friday, August 11, 2023 Friday, August 18, 2023 Monday, August 28, 2023 Friday, September 1, 2023 Friday, September 8, 2023 19 12 15 13 6 6 Saturday, August 26, 2023 Saturday, September 2, 2023 Tuesday, September 12, 2023 ELECTION
TAXABLE VALUATION HISTORY Lennox School District No. 41-4 Lincoln, Minnehaha and Turner Counties, South Dakota Taxable Valuation 928,363,670 789,352,848 728,932,740 737,625,695 696,898,206 661,547,466 Increase or Decrease from Prior Year Amount 139,010,822 60,420,108 -8,692,955 40,727,489 35,350,740 School Year 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 Percentage 17.61 8.29 -1.18 5.84 5.34 Average Change: 53,363,241 7.18 Prepared by Jerry Spethman, SVP 2/13/2023
DISCLOSURE D.A. DAVIDSON & CO. IS VERY INTERESTED IN SERVING AS UNDERWRITER FOR THE PROPOSED ISSUANCE. AS UNDERWRITER, D.A. DAVIDSON & CO. S PRIMARY ROLE WILL BE TO PURCHASE AS PRINCIPAL, OR ARRANGE FOR THE PLACEMENT OF THE SECURITIES IN A COMMERCIAL ARM S LENGTH TRANSACTION WITH THE ISSUER, AND MAY HAVE FINANCIAL AND OTHER INTERESTS THAT DIFFER FROM THOSE OF THE ISSUER. IN ITS CAPACITY AS UNDERWRITER AND NOT AS FINANCIAL ADVISOR, D.A. DAVIDSON & CO. MAY PROVIDE ADVICE CONCERNING THE STRUCTURE, TIMING, TERMS, AND OTHER SIMILAR MATTERS CONCERNING THE ISSUANCE OF THE SECURITIES. HOWEVER, D.A. DAVIDSON & CO. DOES NOT ASSUME ANY FINANCIAL ADVISORY OR FIDUCIARY RESPONSIBILITIES WITH RESPECT TO THE ISSUER.
