1. Peck, Shaffer & Williams LLP 1 Structure and Sale of Municipal Securities Matthias Edrich Kwali Farbes January 30, 2009

2. Peck, Shaffer & Williams LLP 2 Presenters Kwali Farbes, is a fourth year associate at Peck Shaffer with a focus on transaction structure, documents and disclosure Matthias Edrich, is a second year associate of Peck Shaffer with a focus on transaction structure, documents, disclosure and tax matters

3. Peck, Shaffer & Williams LLP 3 Types of Finance Structures General Obligation Bonds Revenue Bonds Lease Purchase Agreement with and without Certificates of Participation

4. Peck, Shaffer & Williams LLP 4 Financing Guidelines Financial Management Structuring and Marketing Legal Public Policy

5. Peck, Shaffer & Williams LLP 5 Typical Finance Team ● Issuer ● Issuer’s Counsel ● Bond Counsel● Disclosure Counsel ● Financial Advisor● Underwriter ● Underwriter’s Counsel ● Rating Agencies ● Insurer ● Trustee/Paying Agent/Registrar

6. Peck, Shaffer & Williams LLP 6 Issuer The Issuer is the entity having legal authority to issue bonds. Issuers include: States and their agencies Counties Municipalities School Districts Special Districts “On-behalf-of” entities

7. Peck, Shaffer & Williams LLP 7 Issuer’s Counsel Issuer’s Counsel is to opine that the Issuer: has been legally established is authorized to execute its documents that all required procedures have been followed to approve the issuance of the Bonds

8. Peck, Shaffer & Williams LLP 8 Financial Advisor The Financial Advisor: gives financial advice on structure and sale of the Bonds assists in obtaining the best rating on the Bonds advises with respect to credit enhancement lends knowledge about marketplace advises with respect to Bond pricing

9. Peck, Shaffer & Williams LLP 9 Underwriter The Underwriter may also: give financial advice on structure and sale of the Bonds assist in obtaining the best rating on the Bonds advise with respect to credit enhancement lend knowledge about marketplace advise with respect to Bond pricing Public vs. Negotiated Sale of Bonds

10. Peck, Shaffer & Williams LLP 10 Underwriter’s Counsel Underwriter’s Counsel: gives legal advice on disclosure prepares or assists in the preparation of offering document(s) prepares Bond purchase agreement between Issuer and Underwriter provides legal opinion that all disclosed information is accurate and no material information is omitted

11. Peck, Shaffer & Williams LLP 11 Bond Counsel The Bond Counsel (sometimes called Special Counsel): gives legal advice on structure of transaction assists with election, if required prepares relevant documents that create “contract” with Bond owners provides legal opinion as to validity of Bonds under state law and exemption of interest from federal and state income taxes

12. Peck, Shaffer & Williams LLP 12 Disclosure Counsel The Counsel engaged to provide the Issuer disclosure advice (sometimes called Disclosure Counsel): gives legal advice on disclosure prepares or assists in the preparation of offering document(s) prepares Bond purchase agreement between Issuer and Underwriter provides legal opinion that all disclosed information is accurate and no material information is omitted ** Note that these duties are very much the same as those of Underwriter’s Counsel and many times are the same firm

13. Peck, Shaffer & Williams LLP 13 Rating Agencies These are national companies recognized by industry as experts in analyzing credit worthiness. These agencies: assign letter grades to Bonds designate the quality of credit and risks of specific issues monitor credit health of rated Issuers

14. Peck, Shaffer & Williams LLP 14 Credit Enhancement Providers At this point in history, credit enhancers are not “red hot” commodities, but in more normal times they: provide third-party guarantees of payments to investors cause the Bonds to be designated with the highest ratings

15. Peck, Shaffer & Williams LLP 15 Trustee/Paying Agent/Registrar Usually a bank performs one or more of these roles. There are various duties, but the primary duties include: making payments to the investors keeping records of all Bond owners protecting collateral

16. Peck, Shaffer & Williams LLP 16 Kwali Farbes and Matthias Edrich Presenters’ Information Peck, Shaffer & Williams LLP Suite 1700 1801 Broadway Denver, Colorado 80202 (303) 296-3996 Main (877) 296-0333 WATTS (Toll Free) (303) 296-0344 Facsimile kfarbes@peckshaffer.com medrich@peckshaffer.com www.peckshaffer.com