June 24, 2019 Scott Shearer & Ken Phillips Ben Kapenstein - - PDF document

June 24, 2019

REFINANCING OPPORTUNITY Scott Shearer & Ben Kapenstein Ken Phillips

East Penn School District Topics of Discussion June 24, 2019

1) Refinancing Opportunity The District’s financing team consisting of PFM Financial Advisors and RBC Capital markets has identified a refinancing opportunity on the Series A of 2012 & Series of 2014 Bonds. The goal of the refinancing will be to realize interest rate savings. Current projections show savings of approximately $155,000. Statistics on Issues Being Considered for Refinancing 2) Bank Qualified (“BQ”) vs. Non-Bank Qualified (“Non-BQ”)

• a. Holders of BQ bonds enjoy certain additional tax benefits, possibly resulting in higher demand.
• b. BQ bonds typically have lower interest rates and a shorter call feature than non-BQ bonds.

c. Depending on market forces, it may make sense to refunding all or only a portion of the Series A of 2012 and Series

• f 2014.
• i. The Financing Team recommends that the District keep the refinancing flexible enough to price the bonds

in the way that will most benefit the District.

Outstanding Par $6,770,000 Interest Rates 2.00% - 2.75% Call Date 11/15/17

Series A

• f 2012

Outstanding Par $6,540,000 Interest Rates 2.00% - 3.25% Call Date 5/15/2019

Series

• f 2014

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HISTORICAL MMD CURVE ILLUSTRATION ‐ SINCE JANUARY 1, 1998 SPOT ANALYSIS ‐ 10 YEAR MMD ‐ SINCE JANUARY 1, 1998 SPOT ANALYSIS ‐ 10 YEAR MMD ‐ SINCE JANUARY 1, 2018

MUNICIPAL MARKET UPDATE

June 17, 2019

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year Range Average Current

Maturity Year Yield (%)

1.10 1.60 2.10 2.60 3.10 3.60 4.10 4.60 5.10

Yield (%)

1.500 1.700 1.900 2.100 2.300 2.500 2.700 2.900

Jan‐18 Feb‐18 Mar‐18 Apr‐18 May‐18 Jun‐18 Jul‐18 Aug‐18 Sep‐18 Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19 Mar‐19 Apr‐19 May‐19 Jun‐19

Yield (%)

Since 1/1/1998 Amount Date Min 1.290 6/27/2016 Max 5.370 5/18/2000 Average 3.208 n/a Current 1.660 6/17/2019 Since 1/1/2018 Amount Date Min 1.610 6/7/2019 Max 2.770 11/2/2018 Average 2.310 n/a Current 1.660 6/17/2019

PFM Financial Advisors LLC 6/17/2019

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EAST PENN SCHOOL DISTRICT SUMMARY OF OUTSTANDING INDEBTEDNESS A B 1 2 3 4 5 6 7 8 9 Fiscal G.O. Bonds G.O. Bonds G.O. Bonds G.O. Bonds G.O. Bonds G.O. Notes G.O. Bonds Total Year Series of Series A of Series of Series of Series B of Series of Series of Debt Ended 2012 2012 2013 2014 2015 2016 2018 Service 6/30/2019 946,426 847,470 424,200 713,841 200,100 2,606,010 4,420,296 10,158,343 6/30/2020 1,529,976 749,620 712,941 717,250 2,595,627 3,818,494 10,123,909 6/30/2021 1,532,176 752,470 726,691 733,850 1,437,925 4,961,744 10,144,856 6/30/2022 1,528,826 750,070 739,941 739,950 4,975,163 8,733,950 6/30/2023 1,533,961 752,420 742,407 740,700 4,979,494 8,748,981 6/30/2024 1,526,260 753,651 757,971 681,750 2,045,203 5,764,836 6/30/2025 774,563 763,293 756,985 2,294,840 6/30/2026 766,990 764,481 1,531,471 6/30/2027 779,553 764,488 1,544,040 6/30/2028 785,801 771,969 1,557,770 6/30/2029 780,588 782,513 1,563,100 6/30/2030 TOTALS 9,372,188 8,481,925 424,200 8,234,228 3,813,600 6,639,562 25,200,393 62,166,096 LOCAL EFFORT REQUIREMENTS 10 11 12 13 14 15 16 17 18 Fiscal G.O. Bonds G.O. Bonds G.O. Bonds G.O. Bonds G.O. Bonds G.O. Notes G.O. Bonds Total Year Series of Series A of Series of Series of Series B of Series of Series of Local Ended 2012 2012 2013 2014 2015 2016 2018 Effort 6/30/2019 827,789 748,825 379,065 703,447 200,100 2,323,868 3,906,318 9,089,414 6/30/2020 1,338,190 662,365 702,561 717,250 2,314,610 3,374,491 9,109,467 6/30/2021 1,340,114 664,883 716,110 733,850 1,282,247 4,384,808 9,122,012 6/30/2022 1,337,184 662,763 729,167 739,950 4,396,666 7,865,730 6/30/2023 1,341,675 664,839 731,597 740,700 4,400,494 7,879,305 6/30/2024 1,334,939 665,927 746,935 681,750 1,807,393 5,236,945 6/30/2025 677,469 674,446 745,963 2,097,878 6/30/2026 677,713 753,350 1,431,063 6/30/2027 688,813 753,356 1,442,170 6/30/2028 694,335 760,729 1,455,064 6/30/2029 689,728 771,119 1,460,847 6/30/2030 TOTALS 8,197,360 7,494,638 379,065 8,114,335 3,813,600 5,920,725 22,270,171 56,189,894 Principal**: 7,930,000 6,770,000 6,540,000 3,440,000 3,986,000 22,920,000 51,586,000 PE%: 29.96% 27.82% 25.43% 3.48% 0.00% 25.88% 27.79% PE% Status: Permanent Permanent Permanent Permanent Estimate Permanent Permanent AR% (18-19): 41.84% 41.84% 41.84% 41.84% 41.84% 41.84% 41.84% Call Date: 3/15/2017 11/15/2017 Non-Callable 5/15/2019 4/1/2020 Make Whole Non-Callable Purpose: CurRef - 2006A CurRef - 2004AA & 2007 CurRef - 2007 & 2008 Adv Ref - 2009 Cur Ref 2010A Cur Ref 2011 Cur Ref 1998, 2003A, 2004A, 2007 ** Outstanding as of June 17, 2019 DEBT SERVICE REQUIREMENTS

PFM Financial Advisors LLC 6/17/2019

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East Penn School District Preliminary Refinancing Schedule Series of 2019 - Refunds the Series A of 2012 & Series of 2014

Preliminary Refinancing Schedule Date Objective Monday, June 24, 2019 * Regularly Scheduled Board Meeting *

• Presentation on Refinancing Opportunity
• Authorize Financing Team to Proceed

Monday, July 08, 2019 * Regularly Scheduled Board Meeting *

• Board considers Maximum Parameters Resolution

July 2019

• POS / Credit Rating Preparation
• Due Diligence Call with Financing Team / District
• Credit Rating Interview

Late July/Early August

• Bond Sale - Series of 2019

September 2019

• Estimated Settlement Date

S M T W T F S S M T W T F S 1 1 2 3 4 5 6 2 3 4 5 6 7 8 7 8 9 10 11 12 13 9 10 11 12 13 14 15 14 15 16 17 18 19 20 16 17 18 19 20 21 22 21 22 23 24 25 26 27 23/30 24 25 26 27 28 29 28 29 30 31

June 2019 July 2019

S M T W T F S S M T W T F S 1 2 3 1 2 3 4 5 6 7 4 5 6 7 8 9 10 8 9 10 11 12 13 14 11 12 13 14 15 16 17 15 16 17 18 19 20 21 18 19 20 21 22 23 24 22 23 24 25 26 27 28 25 26 27 28 29 30 31 29 30

August 2019 September 2019

PFM Financial Advisors LLC 6/17/2019

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EAST PENN SCHOOL DISTRICT SERIES OF 2012A Bonds to be Refunded 1 2 3 4 5 6 7 8 Semi-Annual Fiscal Year State Local Date Principal Rate Interest Debt Service Debt Service Aid Effort 11/15/2019 600,000 2.000 77,810.00 677,810.00 5/15/2020 71,810.00 71,810.00 749,620.00 87,254.93 662,365.07 11/15/2020 615,000 2.000 71,810.00 686,810.00 5/15/2021 65,660.00 65,660.00 752,470.00 87,586.67 664,883.33 11/15/2021 625,000 2.000 65,660.00 690,660.00 5/15/2022 59,410.00 59,410.00 750,070.00 87,307.31 662,762.69 11/15/2022 640,000 2.000 59,410.00 699,410.00 5/15/2023 53,010.00 53,010.00 752,420.00 87,580.85 664,839.15 11/15/2023 655,000 2.250 53,010.00 708,010.00 5/15/2024 45,641.25 45,641.25 753,651.25 87,724.16 665,927.09 11/15/2024 680,000 2.350 45,641.25 725,641.25 5/15/2025 37,651.25 37,651.25 763,292.50 88,846.39 674,446.11 11/15/2025 700,000 2.375 37,651.25 737,651.25 5/15/2026 29,338.75 29,338.75 766,990.00 89,276.78 677,713.22 11/15/2026 730,000 2.500 29,338.75 759,338.75 5/15/2027 20,213.75 20,213.75 779,552.50 90,739.04 688,813.46 11/15/2027 755,000 2.550 20,213.75 775,213.75 5/15/2028 10,587.50 10,587.50 785,801.25 91,466.39 694,334.86 11/15/2028 770,000 2.750 10,587.50 780,587.50 5/15/2029 780,587.50 90,859.51 689,727.99 TOTALS 6,770,000 864,455.00 7,634,455.00 7,634,455.00 888,642.01 6,745,812.99 PE% 27.82% (Temporary) AR% 41.84% (2018-2019) Net 11.64% Effective Reimbursement Optional Redemption: November 15, 2017 PFM Financial Advisors LLC 6/24/2019

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EAST PENN SCHOOL DISTRICT SERIES OF 2014 Bonds to be Refunded 1 2 3 4 5 6 7 8 Semi-Annual Fiscal Year State Local Date Principal Rate Interest Debt Service Debt Service Aid Effort 11/15/2019 550,000 2.000 84,220.63 634,220.63 5/15/2020 78,720.63 78,720.63 712,941.25 10,380.65 702,560.60 11/15/2020 575,000 2.000 78,720.63 653,720.63 5/15/2021 72,970.63 72,970.63 726,691.25 10,580.86 716,110.39 11/15/2021 600,000 2.000 72,970.63 672,970.63 5/15/2022 66,970.63 66,970.63 739,941.25 10,773.78 729,167.47 11/15/2022 615,000 2.125 66,970.63 681,970.63 5/15/2023 60,436.25 60,436.25 742,406.88 10,809.68 731,597.19 11/15/2023 645,000 2.450 60,436.25 705,436.25 5/15/2024 52,535.00 52,535.00 757,971.25 11,036.30 746,934.95 11/15/2024 660,000 2.450 52,535.00 712,535.00 5/15/2025 44,450.00 44,450.00 756,985.00 11,021.94 745,963.06 11/15/2025 685,000 2.750 44,450.00 729,450.00 5/15/2026 35,031.25 35,031.25 764,481.25 11,131.09 753,350.16 11/15/2026 705,000 3.000 35,031.25 740,031.25 5/15/2027 24,456.25 24,456.25 764,487.50 11,131.18 753,356.32 11/15/2027 735,000 3.250 24,456.25 759,456.25 5/15/2028 12,512.50 12,512.50 771,968.75 11,240.11 760,728.64 11/15/2028 770,000 3.250 12,512.50 782,512.50 5/15/2029 782,512.50 11,393.63 771,118.87 TOTALS 6,540,000 980,386.88 7,520,386.88 7,520,386.88 109,499.24 7,410,887.64 PE% 3.48% (Temporary) CARF% 41.84% (2018-2019) Net 1.46% Effective Reimbursement Optional Redemption: May 15, 2019 PFM Financial Advisors LLC 6/24/2019

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EAST PENN SCHOOL DISTRICT REQUIRED TO CALL BONDS SETTLE: 9/15/2019 1 2 3 4 SERIES A OF 2012 Date Principal Interest Total 9/15/2019 6,770,000.00 51,873.33 6,821,873.33 TOTALS 6,770,000.00 51,873.33 6,821,873.33 5 6 7 8 SERIES OF 2014 Date Principal Interest Total 9/15/2019 6,540,000.00 56,147.08 6,596,147.08 TOTALS 6,540,000.00 56,147.08 6,596,147.08 PFM Financial Advisors LLC 6/24/2019

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EAST PENN SCHOOL DISTRICT SERIES OF 2019 Settle 9/15/2019 REFUNDS THE SERIES A OF 2012 & SERIES OF 2014 Dated 9/15/2019 1 2 3 4 5 6 7 8 9 10 11 Semi-Annual Fiscal Year State Proposed Existing Date Principal Coupon Yield Interest Debt Service Debt Service Aid Local Effort Local Effort Savings 43,600.00 11/15/2019 1,015,000 2.000 1.460 78,108.33 1,093,108.33 5/15/2020 224,175.00 224,175.00 1,317,283.33 87,251.89 1,230,031.44 1,364,925.67 134,894.23 11/15/2020 1,045,000 3.000 1.560 224,175.00 1,269,175.00 5/15/2021 208,500.00 208,500.00 1,477,675.00 97,875.63 1,379,799.37 1,380,993.73 1,194.36 11/15/2021 1,095,000 4.000 1.600 208,500.00 1,303,500.00 5/15/2022 186,600.00 186,600.00 1,490,100.00 98,698.62 1,391,401.38 1,391,930.16 528.78 11/15/2022 1,140,000 4.000 1.640 186,600.00 1,326,600.00 5/15/2023 163,800.00 163,800.00 1,490,400.00 98,718.49 1,391,681.51 1,396,436.35 4,754.84 11/15/2023 1,205,000 4.000 1.680 163,800.00 1,368,800.00 5/15/2024 139,700.00 139,700.00 1,508,500.00 99,917.37 1,408,582.63 1,412,862.03 4,279.40 11/15/2024 1,265,000 4.000 1.770 139,700.00 1,404,700.00 5/15/2025 114,400.00 114,400.00 1,519,100.00 100,619.47 1,418,480.53 1,420,409.16 1,928.63 11/15/2025 1,330,000 4.000 1.970 114,400.00 1,444,400.00 5/15/2026 87,800.00 87,800.00 1,532,200.00 101,487.17 1,430,712.83 1,431,063.38 350.55 11/15/2026 1,395,000 4.000 2.150 87,800.00 1,482,800.00 5/15/2027 59,900.00 59,900.00 1,542,700.00 102,182.65 1,440,517.35 1,442,169.78 1,652.42 11/15/2027 1,465,000 4.000 2.350 59,900.00 1,524,900.00 5/15/2028 30,600.00 30,600.00 1,555,500.00 103,030.47 1,452,469.53 1,455,063.50 2,593.97 11/15/2028 1,530,000 4.000 2.470 30,600.00 1,560,600.00 5/15/2029 1,560,600.00 103,368.27 1,457,231.73 1,460,846.86 3,615.13 TOTALS 12,485,000 2,509,058.33 14,994,058.33 14,994,058.33 993,150.03 14,000,908.31 14,156,700.62 155,792.32 PE% 15.83% (Estimated) CARF% 41.84% (2018-2019) Net 6.62% Effective Reimbursement *Assumes estimated interest rates. Actual rates to be determined at time of pricing. PFM Financial Advisors LLC 6/24/2019

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EAST PENN SCHOOL DISTRICT SERIES OF 2019 Composition of the Issue SOURCES: Bonds 12,485,000.00 Original Issue Premium / (Discount) 1,103,384.15 Accrued Interest 0.00 Total 13,588,384.15 USES: Required to Call Series A of 2012 6,821,873.33 Required to Call Series of 2014 6,596,147.08 Underwriter's Discount $7.00 87,395.00 Bond Insurance $0.00 0.00 Cost of Issuance 80,000.00 Miscellaneous Expenses/Rounding 2,968.73 Total 13,588,384.15 Dated Date 9/15/2019 0.33 Settlement Date 9/15/2019 0.33 Yield of the Issue 2.092710 Date Price OIP/(OID) 11/15/2019 100.088% 893.20 11/15/2020 101.657% 17,315.65 11/15/2021 105.089% 55,724.55 11/15/2022 107.251% 82,661.40 11/15/2023 109.296% 112,016.80 11/15/2024 110.962% 138,669.30 11/15/2025 111.731% 156,022.30 11/15/2026 112.224% 170,524.80 11/15/2027 112.193% 178,627.45 11/15/2028 112.479% 190,928.70 TOTAL 1,103,384.15 OIP/(OID) Calculations ESTIMATED PFM Financial Advisors LLC 6/24/2019

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Disclosures: PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide or give a specific

• recommendation. Financial advisory services are provided by PFM Financial Advisors LLC and

Public Financial Management Inc. Both are registered municipal advisors with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) under the Dodd-Frank Act of 2010. Investment advisory services are provided by PFM Asset Management LLC which is registered with the SEC under the Investment Advisers Act of 1940. Additional applicable regulatory information is available upon request. Swap advisory services are provided by PFM Swap Advisors LLC which is registered as a municipal advisor with both the MSRB and SEC, a commodity trading advisor with the Commodity Futures Trading Commission, and a member of the National Futures Association. Consulting services are provided through PFM Group Consulting LLC. PFM financial modeling platform for strategic forecasting is provided through PFM Solutions LLC. For more information regarding PFM’s services or entities, please visit www.pfm.com. The information and any analyses contained in this presentation are taken from, or based upon, information obtained from the recipient or from publicly available sources, the completeness and accuracy of which has not been independently verified, and cannot be assured by PFM. The information and any analyses in these materials reflect prevailing conditions and PFM’s views as

• f this date, all of which are subject to change. To the extent projections and financial analyses

are set forth herein, they may be based on estimated financial performance prepared by or in consultation with the recipient and are intended only to suggest reasonable ranges of

• results. Opinions, results, and data presented are not indicative of future performance. Actual rates

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