1. Overview of Short-term Cash Collateralized Tax-exempt Bonds
FOR THOSE PERMISSIONED
Overview of Short-term Cash Collateralized Tax-exempt Bonds
Southeast Mortgage Advisory Council Conference
May 13, 2015
Crowne Plaza – Perimeter at Ravina, Atlanta, Georgia
Stifel, Nicolaus & Company, Incorporated
2660 Eastchase Lane
4th Floor
Montgomery, Alabama 36117
John B. Rucker, III
Managing Director

2. Disclaimer
This confidential discussion material (this “Material”) has been prepared by Stifel, Nicolaus & Company, Incorporated (“Stifel”) for the Southeast Mortgage Advisory Council (“SMAC”) annual conference. All materials, including proposed terms and conditions, are indicative and for discussion purposes only. Finalized terms and conditions are subject to further discussion and negotiation. Any opinions expressed are our present opinions only and Stifel is under no obligation to update those opinions. All information, including any price indications provided is supplied in good faith based on information we believe, but do not guarantee, to be accurate or complete. We are not responsible for errors or omissions contained herein. Stifel does not provide accounting, tax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and counsel. Certain provided information may be based on Stifels’ own good faith understanding of the application of certain accounting rules as they apply. Stifel makes no representation as to whether its understanding of certain accounting rules is correct and, by providing such information, is not providing you with any accounting advice, including, without limitation, any advice regarding the potential income statement or balance sheet impact from any proposed transaction. All information provided was supplied in good faith based on information which we believe, but do not guarantee, to be accurate or complete. Further information regarding these Materials may be obtained upon request. This Material, and any advice, recommendations, information or work product provided by Stifel is not intended for the benefit of any third party and may not be relied upon by any third party. Any reproduction of this Material, in whole or in part, is strictly prohibited. Stifel, Nicolaus & Company, Incorporated is not acting as a Financial Advisor or Municipal Advisor. The primary role of Stifel, as investment banker, is to purchase securities, for resale to investors, in an arm’s-length commercial transaction between the Issuer and Stifel. Stifel has financial and other interests that differ form those of the Issuer. Stifel is not acting as a municipal advisor, financial advisor or fiduciary to the Issuer or any other person or entity. The information provided is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of The Issuer should consult with its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate.

3. Why does this structure work?
……the yield curve has steepened
……pushing short-term rates to all-time lows
“AAA” Municipal Yield Curve
SIFMA Index
Since the credit crisis in 2007, the yield curve has steepened by over 340 basis points.
Source: Bloomberg
Thomson Reuters Municipal Market Data (MMD) AAA curve is a proprietary yield curve that provides the offer-side of AAA rated state general obligation bonds
SIFMA is a high-grade market index released by Municipal Market Data. The index includes 7-day tax-exempt variable rate demand obligations with the highest short-term ratings

4. Short-term Cash Collateralized Bonds
Short-term Tax-exempt Bonds
Conventional Loan
Underwriter
Trustee
Bond Proceeds
Lender
Bond Proceeds
Bonds
Bond Proceeds
Loan Proceeds
Bond Investor
Negative Arbitrage Account
Project Fund
Collateral Fund
Interest due
on Bonds
Construction Draw
Developer
The Project Fund and Collateral Fund will always equal the par amount of the Bonds. A draw from the Project Fund must be accompanied by depositing the same amount in the Collateral Fund. After the Project is placed in service, the Bonds will be retired with proceeds from the Collateral Fund.
Project Costs
Housing Project
Notes:
The Developer will need to deposit the interest due on the Bonds through the Mandatory Tender Date or Final Maturity Date at closing
The taxable loan can be FHA-insured, Fannie, Freddie and USDA enhanced loans

5. The bonds can be structured under various terms.
Option 1: The bonds can be priced with a two-year maturity
0.75%
May 1, 2015
Bond Closing
May 1, 2017
Final Maturity
Option 2: The bonds can be priced with a two-year maturity with a one-year mandatory tender
0.35%
_____%
May 1, 2015
Bond Closing
May 1, 2016
Mandatory Tender
May 1, 2017
Final Maturity
Notes: For discussion purposes only. Subject to change based on current market conditions. Assumes a 24-month construction period
On or before the Mandatory Tender Date, the Remarketing Agent will remarket the Bonds with a new interest rate and a final maturity May 1, 2017, subject to optional redemption. The interest rate will not be known until the Mandatory Tender Date.