Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
FINAL PRICING BOOK
Final Pricing Book City of Clearwater, Florida Water and Sewer Revenue Refunding Bonds, Series 2017 Pricing Date: January 26, 2017 Closing Date: February 28, 2017 Bank of America Merrill Lynch U a a • a ■ • Section 1 Transaction Overview ■ a Bankof America ■ Merrill Lynch • ■ 7 e LLEARWAFER 1 a Transaction Overview • Transaction Summary 1 ■ Issuer: City of Clearwater, Florida 1 ■ Sale Date: January 26, 2017 al Closing Date: February 28, 2017 i • Par Amount: $69,270,000 ■ Description: Water and Sewer Revenue Refunding Bonds, Series 2017 • II Structure: Fixed rate serial bonds maturing December 1, 2020 through December 1, 2039 • ■ Use of Proceeds: Advance refund the callable Water • Optional Redemption: December 1, 2026 at Par • II Ratings: Moody's: Aa2 / S&P: AA (stable) • . Financial Advisor: Stifel, Nicolaus & Company, Incorporated • Bond Counsel: Bryant Miller Olive • II Disclosure Counsel: Nabors, Giblin & Nickerson, P.A. • Underwriters Counsel: GrayRobinson, P.A. 1 Senior: Bank of America Merrill Lynch II Underwriters: Co -Managers: RBC Capital Markets and Wells Fargo • 1 1 II Bank of America Merrill Lynch 1 Transaction Overview Narrative $69,270,000 Water and Sewer Revenue Refunding Bonds, Series 2017 On January 26, 2017, Bank of America Merrill Lynch senior managed a $69,270,000 Water and Sewer refunding transaction for the City of Clearwater, Florida. The proceeds will be used to advance refund the Series 2009A Bonds for debt service savings. BofAML worked closely with the finance team to update the offering documents, allowing for additional disclosure for investors. In connection with the transaction, Moody's and S&P upgraded the City's Water and Sewer Bonds from Aa3/AA- to Aa2/AA, respectively. City of Clearwater, Florida $69,270,000 Water and Sewer Revenue Refunding Bonds, Series 2017 BofA Merrill Lynch January 2017 The week leading up to pricing was defined by a choppy municipal market as Treasury yields increased and municipal supply was elevated. During the pricing, investor demand focused on certain parts of the yield curve. Amidst this difficult market backdrop and spotty investor demand, BofAML re -priced and re-couponed several maturities. In fact, lower coupons were used in five maturities to broaden the investor base and increase the overall savings for the transaction — on a yield -to -maturity basis, the callable lower coupon bonds saved the City from 11 to 24 basis points. As a result, the City received approximately $60 million in orders from 19 different institutional investors and an additional $6 million of orders from retail investors. To support the pricing and maintain the integrity of the yield curve, BofAML committed to underwrite over $13 million bonds in maturities that were not fully subscribed. As a result of aggressive pricing and a capital commitment from BofAML, the City realized over $6.3 million in present value savings, or 9.4% of refunded bonds. The City secured over $6.3 million in present value savings (9.4% of the refunded par) Bank of America 4:41;"' Merrill Lynch Transaction Overview Rating Agency Process MOODY'S 114,0510aea.eVICe Clearwater (City of), FL Water & Sewer Enterprise New issue • Moody's upgrades to na2 Ckrwater, rl, W&S er Bonds. nts,®,s nae to Be. Ret Bonds sees 2017 0 ,.r...aa..,re.e..,• r.,,.,,,,.santor....oss...,.n.......ur......:.eu w, War 30u tommmtualle.130 M_.. ' ape aer.w.s.w.r..r.d..w+oa.e. CM. Strwe . • w,t.uru.wr•rM,u..r •• ...0 �jryvwt.^.evrte^.e • e.aaora .M+••.• e...++ ano.e .uv.U.4Yta....Wpm* • Moody's: Aa2 UPGRADED from Aa3 "The upgrade to Aa2 reflects the system's established and stable customer base, well- managed financial operations supported by annual rate increases, healthy debt service coverage with strong liquidity levels, above average debt profile, and adequate legal provisions." S&P Global Ratings RatingsDirect Clearwater, FL Water, Sewer Revenue Bond Rating Raised To 'AA' From 'AA-' On Revised Criteria artna s. Fp Isar Global ...am Oaa .• Mot. rat tr.... It 1.E., v... rat.. Clatarts.0r. Fla outsta.a. aad 6.0, I.011ur csts'• 00.00 201/ rat. It. guar revommo. nrunatro eon. TT.e cAttlualt . areas at My It 30. tra. or sus .tate urs error at.... . rmr..tr.r.• .14 S. 0,013. crwra ..13a0 Cosety Oral. It la Shout 30 .1. mos at Tampa .p a of rmo.dmat 141 omd Olvecom. Tam onto. Gonna atom< v. 3aa .ter aocount. 11.743 •Tem out.. rettoet• our uprectatim tart tr. sattastatau• so rat. rates as ..0111 te salat.• strong SO. dterVI....00 .4 Otte. lipstalty S&P: AA (stable) UPGRADED from AA - "The upgrade reflects the very strong enterprise and financial risk profiles of the system, as well as the revision of our water and sewer criteria.. The stable outlook reflects our expectation that city will continue to raise rates as needed to maintain strong debt service coverage and strong liquidity as it implements its capital program.." BankofAmerica Merrill Lynch Transaction Overview Refunding Overview Annual Debt Service Savings Millions $10.5 - $9.0 - $7.5 - $6.0 - $4.5 - $3.0 - $1.5 - $0.0 0 N CO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N Par Amount Escrow Deposit True Interest Cost Average Life (years) Gross Savings PV Savings -as a % of Refunded Par Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Fiscal Year (9/30) X11 LD N 00 Ql m m m m m 0 0 0 0 0 N N N N N 0 0 N • Series 2017 Principal Series 2017 Interest Refunded 2009A Debt Service $69,270,000.00 $75,014,549 3.753% 18.3 $10,626,949 $6,335,204 9.414% $123,259,796 $9,458,500 $5,416,029 Bank ofAmerica �'I Merrill Lynch ■ r ■ r ■ ■ a r ■ ■ ■ ■ ■ r ■ r ■ ■ ■ ■ ■ s ■ ■ ■ ■ ■ i r Transaction Overview Summary of Syndicate Members' Price Views OVERALL PRICE VIEWS Maturity (12/1) 5% 2020 10 2021 12 2022 15 2023 17 2024 20 2025 22 2026 25 2027 28 2028 30 2029 30 2030 30 2031 30 2032 30 2033 30 2034 30 2035 30 2036 30 2037 30 2038 30 2039 30 Minimum 4% Average Maximum 5% 4% 5% 4% - 15 - 20 - 18 - 23 - - 20 25 - 22 - 28 - - 25 - 30 - 27 - 33 29 35 - 31 38 35 33 42 40 50 40 35 50 40 60 45 35 57 40 65 50 35 63 40 70 55 36 68 40 75 60 36 69 40 75 65 36 71 40 75 70 36 73 40 75 70 36 73 40 75 70 36 73 40 75 70 36 73 40 75 70 36 73 40 75 Note: Price views show indicative spreads to interpolated MMD expressed in basis points. SENIOR BofA Merrill Lynch 5% 4% 20 23 25 28 30 33 35 38 40 50 40 60 40 65 40 70 40 75 40 75 40 75 40 75 40 75 40 75 40 75 40 75 CO -MANAGERS RBC Wells Fargo 5% 4% 5% 10 16 12 18 15 20 17 22 20 25 22 25 25 27 28 35 28 30 40 30 35 35 50 30 40 35 60 30 45 35 70 30 50 38 73 30 55 38 73 30 60 38 73 30 65 38 73 30 70 38 73 30 70 38 73 30 70 38 73 30 70 38 73 30 70 4% BankofAmerica Merrill Lynch Transaction Overview Pricing Progression ORDER PERIOD OPEN VERBAL AWARD FINAL PRICING MaturityIVf D (December 1) 1/25/1 , n. pfea - e 'n S=pre li ... o /26/17) Oda le 2020 1.44% 5.00% 19 bps 1.63% 5.00% 19 bps 1.63% 5.00% 1.44% 19 bps 1.63% 2021 1.63% 5.00% 23 bps 1.86% 5.00% 23 bps 1.86% 5.00% 1.64% 22 bps 1.86% 2022 1.80% 5.00% 25 bps 2.05% 5.00% 23 bps 2.03% 5.00% 1.80% 23 bps 2.03% 2023 1.99% 5.00% 25 bps 2.24% 5.00% 25 bps 2.24% 5.00% 1.99% 25 bps 2.24% 2024 2.12% 5.00% 27 bps 2.39% 5.00% 27 bps 2.39% 5.00% 2.12% 27 bps 2.39% 2025 2.24% 5.00% 30 bps 2.54% 5.00% 30 bps 2.54% 5.00% 2.24% 30 bps 2.54% 2026 2.33% 5.00% 30 bps 2.63% 5.00% 30 bps 2.63% 5.00% 2.34% 29 bps 2.63% 2027 2.41% 5.00% 33 bps 2.74% 5.00% 33 bps 2.74% 5.00% 2.42% 32 bps 2.74% 2028 2.48% 5.00% 35 bps 2.83% 5.00% 35 bps 2.83% 5.00% 2.49% 34 bps 2.83% 2029 2.56% 5.00% 35 bps 2.91% 5.00% 35 bps 2.91% 5.00% 2.57% 34 bps 2.91% 2030 2.62% 5.00% 35 bps 2.97% 5.00% 35 bps 2.97% 5.00% 2.63% 34 bps 2.97% 2031 2.69% 5.00% 35 bps 3.04% 5.00% 35 bps 3.04% 5.00% 2.70% 34 bps 3.04% 2032 2.75% 5.00% 35 bps 3.10% 5.00% 35 bps 3.10% 5.00% 2.76% 34 bps 3.10% 2033 2.81% 5.00% 35 bps 3.16% 5.00% 35 bps 3.16% 5.00% 2.82% 34 bps 3.16% 2034 2.87% 3.50% 80 bps 3.67% 3.50% 86 bps 3.73% 3.50% 2.88% 85 bps 3.73% 2035 2.92% 5.00% 35 bps 3.27% 5.00% 35 bps 3.27% 5.00% 2.93% 34 bps 3.27% 2036 2.96% 5.00% 35 bps 3.31% 4.00% 70 bps 3.66%* 4.00% 2.97% 69 bps 3.66% 2037 2.99% 5.00% 35 bps 3.34% 4.00% 70 bps 3.69%* 4.00% 3.00% 69 bps 3.69% 2038 3.00% 4.00% 70 bps 3.70% 4.00% 70 bps 3.70% 4.00% 3.01% 69 bps 3.70% 2039 3.01% 4.00% 70 bps 3.71% 4.00% 70 bps 3.71% 4.00% 3.02% 69 bps 3.71% Note: Spreads to interpolated MMD expressed in basis points. *Coupon of maturity changed. Bank of America �I Merrill Lynch ■■■■■IN■•1/■IN■•II■■■r■■■r■■■II11■■■11■ ■ I ■ a ■ a S r Section 2 Market Environment ■ ■ Bank of America��I ■ Merrill Lynch a ■ LLL:Th NATER MUG*. BIAVIIFIJL• BAT TO BE‘f_li 1 1 Market Environment Negotiated Calendar A Par ($MM) 450,000 389,795 279,985 270,000 Nil 229,930 223,870 198,075 144,000 • 142,212 125,000 122,885 • 116,329 110,205 • 108,180 105,350 111 96,140 89,495 82,915 111 80,000 77,680 77,645 75,000 11 71,460 68,000 • 64,740 62,009 IN 55,800 55,000 • 55,000 • 44,000 40,000 36,700 34,990 111 34,260 33,150 • 33,135 33,000 31,815 S 31,710 31,180 111 26,140 26,070 • 25,000 R 1 Issuer Bay Area Toll Authority Mayor and City Council of Baltimore City of Philadelphia Texas Public Finance Authority The Rector and Visitors of the University of Virginia Kentucky State Property and Buildings Commission Spring Independent School District Eagle County School District No. RE -50J North Carolina Turnpike Authority Prosper Independent School District Massachusetts Development Finance Agency Sherwood School District No. 88J California Public Finance Authority Arizona Industrial Development Authority Medical Center Hospital Authority Mayor and City Council of Baltimore Albuquerque-Bernalillo County Water Utility Authority Regional Transportation District City of North Charleston Temple City Unified School District Illinois Finance Authority Columbus City School District City of Mobile Summit School District RE 1 City of Clearwater Illinois Housing Development Authority City of Redding Taylor County City of Billings Belmont -Redwood Shores School District Parker County Novi Community School District Georgetown Independent School District Dormitory Authority of the State of New York Everman Independent School District Successor Agency to the RDA of the City of Santa Clarita Utah State Charter School Finance Authority Grosse Pointe Public School System City of Galveston Community Unit SD No. 10, Ford, Champaign Cos et al Utica Community Schools City of Commerce City El Monte City School District State Description CA MD PA TX VA KY TX CO NC TX MA OR CA AZ GA MD NM CO SC CA IL OH AL CO FL IL CA TX MT CA TX MI TX NY TX CA UT MI TX IL MI CO CA San Francisco Bay Area Toll Bridge Rev Bonds Subordinate Project Revenue Bonds General Obligation Refunding Bonds, Series General Obligation and Refunding Bonds General Revenue Pledge Refunding Bonds State Property and Buildings Commission School Building Bonds, Series 2017 General Obligation Bonds Monroe Expressway Toll Revenue Bonds School Building Bonds, Series 2017 Revenue Bonds, Series 2017 General Obligation Bonds Revenue Bonds, Series 2017 Education Revenue Bonds Revenue Anticipation Certificates Refunding Revenue Bonds, Series 2017D Senior Lien Joint Water and Sewer System Sales Tax Revenue Bonds Limited Obligation Bonds, Series 2017A 2017 General Obligation Bonds Revenue Bonds, Series 2017 General Obligation Bonds General Obligation Warrants General Obligation Bonds Water and Sewer Refunding Bonds, Series 2017 Revenue Bonds, 2017 Series A Electric System Refunding Revenue Bonds, Limited Tax GO Bonds, Series 2017 Sewer Revenue Bonds, Series 2017A General Obligation Refunding Bonds Road Bonds, Series 2017 2017 School Building and Site Bonds, School Building Bonds, Series 2017 Revenue Bonds, Series 2017A Refunding Bonds, Series 2017 Tax Allocation Refunding Bonds, Series 2017 Charter School Revenue Bonds 2017 Refunding Bonds Combination Tax and Revenue Certificates of General Obligation School Building Bonds, 2017 School Building and Site and Refunding Refunding Certificates of Participation General Obligation Refunding Bonds Source: IPREO Muni Calendar week of 1/23/17; negotiated deals w/ par of $25mm or more only; the City's transaction is shaded yellow. Lead Manager BA Merrill Lynch Citigroup RBC Capital Mkts Jefferies JPMorgan Citigroup RBC Capital Mkts George K. Baum BA Merrill Lynch Raymond James Barclays Capital Piper Jaffray Ziegler Cap Mkts RBC Capital Mkts Barclays Capital Citigroup JPMorgan Piper Jaffray Wells Fargo Secs Morgan Keegan BA Merrill Lynch KeyBanc Cap Mkts Raymond James George K. Baum BA Merrill Lynch Citigroup Citigroup Frost Bank Piper Jaffray Piper Jaffray Raymond James Stifel Nicolaus Stifel Nicolaus Raymond James William Blair Stifel Nicolaus D.A. Davidson Raymond James Coastal Securities Stifel Nicolaus Stifel Nicolaus Stifel Nicolaus Mesirow Financial BankofAmerica Merrill Lynch Market Environment Scheduled Economic News Releases US Calendar of Business Indicators Economic News Releases Monday (1/23) Tuesday (1/24) Wednesday (1/25) Thursday (1/26) Friday (1/27) 10:30 am Dallas Fed Mfg Survey 9:45 am PMI Manufacturing Index Flash 10:00 am Existing Home Sales 10:00 am Richmond Fed Manufacturing Index 7:00 am MBA Mortgage Applications 9:00 am FHFA House Price Index 10:30 am EIA Petroleum Status Report 8:30 am International Trade in Goods 8:30 am Jobless Claims 10:00 am New Home Sales 8:30 am Durable Goods Orders 8:30 am GDP 10:00 am Consumer Sentiment BankofAmerica Merrill Lynch 1 1 • r 1 Market Environment Interest Rates Ire ,TER 10 -year and 20 -year MMD rates remain close to their five-year averages ■ MMD OVER THE PAST 5 YEARS Change High Average Low 10 -Year MMD 20 -Year MMD 3.04% 4.27% 2.04% 2.84% 1.29% 1.80% 3.25% 1 1 1 2.75% - 1 1 1 2.25% - 1 1 1 1.75% 1 1 1 1.25% 1 Jan -16 Apr -16 Jul -16 Oct -16 Jan -17 Jan -12 Source: Thomson Reuters as of 1/25/17. Jan -13 Jan -14 Jan -15 Jan -16 Jan -17 10 -Year MMD — 20 -Year MMD BankofAmerica �'' Merrill Lynch Market Environment Weekly Municipal Bond Issuance (billions) $18 - $16 - $14 - $12 - $10 - $8 - $6 - $4 - $2 $0 Jan -16 Municipal bond issuance reached a record high in 2016 2016-17 YTD Weekly Average: $8 billion Apr -16 Source: Thomson Reuters and IPREO as of 1/23/17. Jul -16 Oct -16 Jan -17 • Negotiated Competitive Average Ban kofAmericaI Merrill Lynch aaaaaamaialuaaaaanaaaaairarparaaa■aa Market Environment Comparable Transactions Sale Date Amount Issuer Description Rating Due Sr. Manager Maturity Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Call Feature January 18, 2017 $35,100,000 City of West Palm Beach, FL Utility System Aa2 / AA+ / NR October 1 Citigroup January 12, 2017 $62,595,000 City of Cape Coral, FL Special Obligation Aa3 / AA- / NR October 1 BofA Merrill Lynch November 17, 2016 $21,800,000 City of Ocoee, FL Water & Sewer System NR / AA+ / AA October 1 Stifel, Nicolaus & Co., Inc. November 3, 2016 $47,760,000 Martin County, FL Utilities System NR / AA / AA October 1 RBC Capital Markets November 3, 2016 $38,520,000 City of Marco Island, FL Utility System Aa3 / NR / AA - October 1 BofA Merrill Lynch Coupon Yield Spread Coupon Yield Spread Coupon Yield Spread Coupon Yield Spread Coupon Yield 2.000% 1.00% 17 2.000% 0.80% 11 3.000% 1.16% 16 4.000% 0.96% 12 5.000% 1.47% 35 3.000% 1.34% 19 4.000% 1.06% 12 5.000% 1.68% 36 4.000% 1.57% 26 5.000% 1.19% 16 5.000% 1.87% 40 4.000% 1.74% 28 5.000% 1.34% 21 5.000% 1.37% 24 5.000% 1.73% 18 5.000% 2.04% 41 5.000% 1.89% 32 5.000% 1.43% 23 5.000% 1.47% 27 5.000% 1.89% 20 5.000% 2.19% 44 5.000% 2.11% 34 5.000% 1.55% 21 5.000% 1.62% 28 3.000% 2.07% 24 5.000% 2.35% 46 5.000% 2.32% 38 5.000% 1.74% 27 5.000% 1.79% 32 5.000% 2.19% 25 5.000% 2.47% 48 5.000% 2.51% 42 5.000% 1.91% 31 5.000% 1.94% 34 5.000% 2.32% 26 5.000% 2.59% 49 5.000% 2.63% 44 5.000% 2.03% 33 5.000% 2.07% 37 5.000% 2.41% 27 5.000% 2.70% 51 5.000% 2.74% 44 5.000% 2.17% 37 5.000% 2.19% 39 5.000% 2.52% 30 5.000% 2.82% 55 5.000% 2.83% 43 5.000% 2.28% 38 5.000% 2.32% 42 5.000% 2.61% 31 5.000% 2.88% 54 5.000% 2.93% 44 5.000% 2.37% 38 5.000% 2.44% 45 5.000% 2.70% 32 3.000% 3.19% 77 5.000% 2.99% 44 5.000% 2.45% 40 5.000% 2.49% 44 5.000% 2.76% 30 3.000% 3.30% 80 5.000% 3.06% 44 4.000% 2.81% 69 4.000% 2.81% 69 5.000% 2.82% 30 3.250% 3.36% 80 5.000% 3.14% 45 4.000% 2.87% 68 4.000% 2.88% 69 5.000% 2.88% 30 5.000% 3.12% 50 5.000% 3.18% 44 4.000% 2.94% 69 3.000% 3.10% 85 5.000% 2.94% 30 5.000% 3.18% 50 3.625% 3.80% 101 4.000% 2.99% 69 4.000% 3.02% 72 3.500% 3.63% 90 3.625% 3.85% 102 4.000% 3.04% 70 4.000% 3.06% 72 3.500% 3.67% 90 3.750% 3.90% 104 3.125% 3.22% 85 5.000% 3.30% 50 4.000% 3.15% 75 3.500% 3.72% 90 4.000% 3.18% 75 4.000% 3.64% 80 3.250% 3.41% 95 4.000% 3.21% 75 4.000% 3.65% 80 3.250% 3.37% 90 Spread October 1, 2027 @ Par Note: Shows spread based on MMD at time of verbal award. October 1, 2027 @ Par October 1, 2026 @ Par October 1, 2026 @ Par October 1, 2026 @ Par Bank of America Merrill Lynch • U • • i ■ ■ Section 3 Bond Distribution Summary • • ■ Bank of America • Merrill Lynch „izt - ; rER • • gi Bond Distribution Summary Orders by Maturity • i ■ a w CLEARWATER SUMMARY OF ORDERS BY MATURITY . Maturity, ` Principal 2020 670,000 • 2021 700,000 Retail Orders 475,000 700,000 • 2022 730,000 2,180,000 • 2023 770,000 970,000 • 2024 805,000 400,000 ■ 2025 850,000 2026 885,000 • Priority Orders 600,000 625,000 900,000 685,000 Subscription Balance Levels (Excl. Stock) 1.6x (405,000) 1.9x (625,000) 4.2x (2,350,000) Stock Orders 195,000 2.1x (885,000) 0.5x 405,000 430,000 250,000 0.3x 600,000 600,000 2027 930,000 200,000 0.0x 885,000 885,000 0.2x 730,000 730,000 • 2028 975,000 15,000 200,000 0.2x 760,000 760,000 2029 1,020,000 35,000 905,000 0.9x 80,000 80,000 • 2030 1,070,000 955,000 0.9x 115,000 115,000 • 2031 1,125,000 1,000,000 0.9x 125,000 125,000 . 2032 1,180,000 100,000 1,180,000 1.1x (100,000) ■ 2033 7,220,000 200,000 10,115,000 1.4x (3,095,000) 7,220,000 2034 7,530,000 325,000 7,095,000 1.0x 110,000 2,000,000 • 2035 7,860,000 25,000 7,835,000 1.0x - i 2036 8,225,000 8,225,000 1.0x - - • 2037 8,555,000 300,000 8,555,000 1.0x (300,000) • 2038 8,905,000 50,000 9,155,000 1.0x (300,000) 3,385,000 • 2039 9,265,000 45,000 750,000 0.1x 8,470,000 8,470,000 ■ Total $ 69,270,000 $ 6,020,000 $ 59,030,000 0.9x $12,280,000 $ 24,995,000 a a a • Note: Subscription levels exclude stock orders. a a Ban k of America "W Merrill Lynch Bond Distribution Summary Distribution of Orders Despite the strong demand for the offering, certain maturities weren't fully subscribed for; so BofAML (on behalf of the syndicate) offered to underwrite the remaining balances at the original pricing yields $16 - $14 - $12 - $10 - Lox -1117. $6 - $4 - $ 2 4.2x pm 0.5x 0.3x 0.0x 0.2x 0.2x 0.9x 0.9x 0.9x 1.ix $0 rri� r'r i r'i■r�r�i 1.0x 0.1x O 1 N M Lf1 lD 1- CO Q1 N N N N N N N N N N M CO m m CO ▪ m en • M M m 0 O O O 0 0 0 0 O 0 0 0 0 O O O O O O O N N N N N N N N N N N N N N N N N N N N Note: Subscription levels exclude stock orders. Retail Orders ■ Priority Orders Stock Orders Bonds Available Bank of America "'I Merrill Lynch • ■ ■ ■ ■ ■ • • • • • ■ • • • • • • • • • • ■ ■ • U • • • • • • • • a Bond Distribution Summary Orders by Priority and Underwriter ■ ■ ■ • • • • • • ■ • • ■ ■ ■ ■ ■ ■ ■ ■ ■ ORDERS BY PRIORITY & UNDERWRITER Underwriter Retail Orders Group Net Orders Stock Orders Total % of Orders Total BofA Merrill Lynch $ 5,365,000 $ 55,730,000 $ 13,965,000 $ 75,060,000 83% RBC Capital Markets 100,000 - 100,000 0% Wells Fargo 555,000 3,110,000 11,220,000 14,885,000 17% Total $ 6,020,000 $ 58,840,000 $ 25,185,000 $ 90,045,000 Orders by Underwriter III ■ BofA Merrill Lynch RBC Wells Fargo • a • • Orders by Order Type ■ Group Net • Retail Stock . Note: Stock orders include unsold balance underwritten by BofAML on behalf of the Syndicate. Bank of America 'I Merrill Lynch • Section 4 Financing Documents i ■ ■ Bankof America • Merrill Lynch ■ ■ a a a Financing Documents • Preliminary Official Statement Cover a a a a a a a a a a a a a a a a ■ a a a a a a a a a a a c 3 .13 PRELIMINARY OF'FiCIAL STATEMENT DATED JANUARY 20. 2017 NEW ISSUE - FULL BOOK -ENTRY Ratings.: S&P: "AA" (stable outlook) Moody's: "Aa2" (See "RATINGS.' herein) in the opinion of bond retuned., assuming compliance by the City with certain covenants, under misting statutes, regulations, and Judicial dorsums, the interest on the Series 2017 Bonds will be errduded from gross income for federal income tar purposes of the holders thereof and will not be an item of tar preference for purposes of the federal alternate tr minimum tar imposed on indi uaduaLs and corporations. However, interest on the Series 9017 Bonds shall be taken into account in determining adjusted current Printings for purposes of computing the alternate ve m in i mum tar on corporations. See TAX 3L4 TIERS' herein for a description of other tar consequences to holders of the Series 2017 Bonds. CITY OF CLEARWATER, FLORIDA $64,740,000* Water and Sewer Revenue Refunding Bonds. Series 2017 noted: Date of Delivery Due: December 1, ma bows below The Water and Sewer Revenue Refunding Banda, Series 2017 (the 'Series 3017 Bonds') of the City of Clearwater, Florida (the 'City') are being issued in fully registered form and, when initially issued, will be registered to Cede & Co.. as nominee of The Depository Trost Company. New York. New York U.S. Bank National Association. Orlando, Florida, is acting as the Paying Agent and Bond Registrar for the Series 3017 Bonds. The Series 2017 Bonds will be purchased in book -entry form only, in the denomination of $.000 or any integral multiple thereof. There will be no physical delivery of bond certificates to individual Bondholders Interest on the Series 2017 Bonds will be payable at the rates shown on the inside cover semi-annually beginning on June 1.2017 and on each December 1 and June 1 thereafter. Principal of, and premium. if any, on the Series 3317 Bonds will be payable on the dates and in the amounts shown on the inside cover or upon redemption prior to maturity. The Series 2017 Bonds will be issued pursuant to the authority of and in full compliance with (a) the charter of the City, (b) the Constitution and the laws of the State of Florida. particularly Chapter 188. Part 11. Florida Statutes, and other applicable provisions of law, and (c) Ordinance No. 3074- 84 enacted by the City on August 2. 1984 (the' 1984 Ordinance'), as amended and supplemented by Ordinance No. t1)15-01, enacted November 15.3001 (the '3001 Ordinance" and, together with the 1984 Ordinance, the 'Original Ordinance'), as further amended and supplemented by Ordinance No. 8620.14, enacted December 4. 2014 (the '2014 Amending Ordinance' and, together with the Original Ordinance. the "Bond Ordinance"), and. as further supplemented by Resolution No. 174:. adopted by the City on January 19, 2017 (the 'Resolution') See °APPENDIX C - Copies of Original Ordinance, 2014 Amending Ordinance and Resolution' attached hereto. The 2014 Amending Ordinance contains amendments to the Original Ordinance which will not became effective until the City has received both the consent of the Holden; of two-thirds of the principal amount of Bonds Outstanding and the insurer of any Outstanding Bonds. It is possible that the City will receive the requisite consent of the Holders of Bonds upon issuance of the Series 2017 Bonds (dependent on the aggregate principal amount of bands to be refunded by the Series 2017 Bonds). However. the City has not requested the consent of the insurer of the Outstanding Series mo 2003 Bonds, which finally mature on December 1, 2018. The City anticipates that such amendments will become effective on December 1, 2018, m.1 or earlier upon the issuance of a sufficient principal amount of Additional Bonds and defeasance of the Series 2003 Bonds. The Series 2017 Bonds o will be secured by the common Reserve Account until the amendments become effective, at which time the Series 2017 Bonds will no longer be secured by the Reserve Account or any other reserve fund or account under the Bond Ordinance_ BY ACCEPTANCE CW THEM SERIES 017 BONDS, PURCHASERS OF THE SERIES 2017 BONDS CONSENT TO THE AMENDMENTS PROVIDED IN THE 3014 AMENDING ORDINANCE, See 'SUMMARY OF 2014 AMENDING ORDINANCE' herein and 'APPENDIX C - Copies of Original Ordinance, 2014 Amending Ordinance and m 5 Resolution' attached hereto. o The Series 2017 Bonds are being issued for the purpose of (i) advance refunding and redeeming on December I, 2019. all or a portion of the 0 ll .. outstanding principal amount of the City's Water and Sewer Revenue Bonds, Series 201.11A. maturing on or after December I. 2020. (i) advance a refunding and redeeming on December I.2021. all or a portion of the outstanding principal amount of the Cry's Water and Sewer Revenue Refunding >o Bonds. Series 2011. maturing on or after December 1. 2022. and (di) paying the costs of issuing the Series 3017 Bonds n fi The Series 2017 Bonk; and the intermit thereon are payable solely frau the Net Revenues derived from the operation of the water. sewer and reclaimed water utility system of the City (the 'System'), as further described herein. The lien of the Series 2017 Bonds on the Net Revenues of the g System is on parity with the holders of the City's outstanding Water and Sewer Revenue Refunding Bonds, Series 30(11, the City s outstanding Water eo o and Sewer Revenue Bonds, Series 2000A which are not refunded with the proceeds of the Series 3017 Bads the City's outstanding Water and Sewer 2 E Revenue Refunding Bonds, Series 20 098, the City's outstanding Water and Sewer Revenue Refunding Bonds. Series 2011 which are not refunded ,"_ E with the proceeds of the Series 2017 Bonds, and the City's outstanding Water and Sewer Revenue Refunding Bond, Series 2014 (collectively, the n tttm��� m 'Parity Bonds'), as further described herein_ .3 -am Neither the Series 2017 Bonds nor the interest thereon constitute a general obligation or indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation. No owner or owners of any Series 2017 Bonds shall ever have the right to compel the mexercise a( the ad valorem taxing power of the City, or any other taxing power in any form on any real or personal property of the City, to pay the Series 2017 Bonds or the intermit thereof) The City shall not be obligated to pay the Series 2017 Bonds or any interest thereon except from the Net Revenues of the System. in the manner provided in the Bond Ordinance on parity with the Parity Bonds. < This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read this entire Official a Statement to obtain information essential to the making of an informed investment decision. 2 a The Series 2017 Fonds are offered when, as and if issued and accepted 6y the Underwriters subject to the approval of legality by Bryant Miller(diee P..4., Tallahassee, Florida, Bond Counsel. Certain other legal matters will be passed upon for the City � by Pamela A.Akin, Esquire, City Attorney, and by Nabors, Giblin &.Nickerson, P.A., Tampa, Florida, Disclosure Counsel to the City. GrayRobinann, PA, Tampa, Florida �n § is serving as counsel to the underwriters. Stifel, .Vimtaus & Company, Incorporated Orlando, Florida is serving as Financial Advisor to the g.m City. It is exported that the Series 20!7 Bonds, in deytniticr book.emtryform, will be atoilabtejor delivery through 117r- in New Pont Vesu York 5 2o on or about Febrsarg 2017 The Series 2017 Bonds may be subject to optional sad mandatory redemption prior to maturity as described herein. BofA Merrill Lynch O RBC Capital Markets, LLC a. 2017 g. f, t may, subsea to change Wells Fargo Securities BankofAmerica �I Merrill Lynch Financing Documents Final Official Statement Cover NEW MITE - VOl t. RON K-RNTRY Ratings: S&P: "AA" (stable outlook) Maody's: „Aa2„ (See "RATINGS" herein) in the opinion of bond counsel, assuming compliance by the City with certain covenants, under existing statute's. regulations, and judicial derisioas, the interest on the Series 2017 Bonds trill be excluded from gross income for federal Income tar purposes of the holders thereof and Will not be an item of tax pre. in•ertce for proposes of the feoierul atterna!ire minimum tar imposed on indiriduaLs and corporations. However, interest on the Series 2017 Bonds shall be takers into account in determining adjusted current earnings for purposes of computing the alternative minimum tar on emp rations. Ser 'T.4X MATTERS' herein for a description of other tar consequences to holders of the Series 2017 Bonds. CITY OF CLEARWATER, FLORIDA $69.2 70,000 Water and Sewer Revenue Refunding Bonds, Series 2017 Dated: Date of Delivery Due: December 1, as shown below The Water and Sewer Revenue Refunding Bonds. Series 2417 (the 'Series 2017 Bonds') of the City of Clearwater. Florida (the "Trey') am being Issued In fully registered form and when initially tented, will he registered to Cede & Co., as nominee of The Depository Trust Company. New York, New York U.S. Bank National Association. Orlando. Florida is acting as the laying Agent and Bond Registrar for the Series 2017 Bonds. The Series 2017 Bonds will be purchased In book -entry form only. m the denomination of 35.000 or any integral multiple thereof. There will be no physical delivery of loud certificates to individual Bondholders. Interest on the Series 2017 Bonds will be payable at the rates shown on the Inside cover semi-annually beginning on June 1, 2017 and on each December 1 and June 1 thereafter. Principal of. and premium, If any, on the Series 2017 Bonds will be payable on the dates and In the amounts shown on the inside cover or upon redemption prior to maturity. The Series 2017 Bonds will he Issued pursuant to the authority of and in full compliance with (a) the charter of the City. (b) the Constitution and the laws of the State of Florida particularly Chapter 15u. Part II. Florida Statutes. and other applicable provisions of law. and (e) Ordinance No. 387481 enacted by the City on August 2. 1984 (tau '1084 Ordinance'), as amended and supplemented by Ordinance No. tilS-Ole enacted November 15. 2001 (the '2001 Ordinance" and together wtth the 1984 Ordnance. the 'Original Ordinance') as further amended and supplemented by Ordinance No. 8h"b0-14. enacted December 4, 2014 (the '2014 Amending Ordinance' and, together with the Original Ordnance, the 'Bond Ordinance"). and, as further supplemented by Resolution No. 17-02, adopted by the City on January 19, 2017 (the 'Resolution"). See 'APPENDIX C - Copies of Original Ordinance. 2014 Amending Ordinance and Resolution' attached hereto. The 2014 Amending Ordinance contains amendments to the Original Ordinance which will not become effective until the City has received both the consent of the holders of two-thirds of the principal amount t of Bonds Outstanding and the Insurer of any Outstanding Bonds. The City has not requested the consent of the insurer of the O uisli ndmg Series 2003 Bonds. which finally mature on December 1.2018. The ('sty anticipates that such amendments will become effective on December 1. 2918. or earlier upon the Issuance of a sufficient principal amount nt of Additional Bonds and defeasance of the Series 2003 Bonds. The Series 2017 Bonds will be secured by the common Reserve Account until the amendments become effective. at which time the Series 2017 Blonds will no longer be secured by the Reserve Account or any other reserve fund or account under the Bond Ordinance. BY ACCEPTANCE OF THEIR SERIES 2017 BONDS. PURCHASERS OF THE SERIES 2017 BONDS CONSENT TO THE AMENDMENTS PROVIDED IN THE 2014 AMENDING ORDINANCE. See 'SUMMARY OF 2014 AMENDING ORDINANCE' herein and "APPENDIX C - Copies of Original Ordintnue, 2014 Amending Ordinance and Resolution' attached hereto. The Series 2017 Bonds are subject to optional redemption prior to maturity as described herein. The Series 2017 Bonds are being issued for the purpose of l) advance refunding and redeeming on December 1, 2010, all of the outstanding principal amount of the City's Water and Sewer Revenue Bonds. Series 2009A, maturing on or after December 1. 2020 and (U) paying the crests of wiling the Series 2017 Bonds. The Servs 2017 Bonds and the interest thereon are payable solely from the Net Revenues derived from the operation of the water, sewer and reclaimed water utility system of the Ctty (the 'System'), as further described herein The lien of the Series 2017 Bonds on the Net Revenues of the System is on parity with the holders of the City's outstanding Water and Sewer Revenue Refunding Bonds, Series 2002. the City s outstanding Water and Sewer Revenue Bards, Series 20111A which are not refunded with the proceeds of the Series 2017 Bonds. the C lty's outstanding Water and Sewer Revenue Refunding Bonds. Series 2009B, the City's outstanding Water and Sewer Revenue Refunding Bands, Series 2011. and the City's outstanding Water and Sewer Revenue Refunding Rossi, Series 2014 (collectively, the 'Panty. Bonds"). as further described hereat Neither the Series 2017 Bonds nor the Interest thereon CornstIt tat a general obligation or Indebtedness of the City within the meaning of any constItuto al statutory or chatter provision or limitation. No owner or owners of any Series 2017 Bonds shall ever have the right to compel the exercise of the ad valorem taxing power of the ('ity, or any other taxing power m any form on any real or personal property of the City. to pay the Series 2017 Bonds or the interest thereon The Ctty shall not be obligated to pay the Series 2017 Bonds or any interest thereon except from the Net Revenues of the System, in the manner provided In the Bond Ordinance on parity with the Parity Bonds. This cover page contains certain information for quick reference only. It is not a summary of the Issue. Investors must read tilts entire Official Statement to obtain Information essential to the making of an informed investment decision_ The Series 2017 Bonds are offered when as and if issued and scripted by the Underwriters subject to the approval of legality by Bryant Miller (lire P_4., Tallahassee, Florida, Bond Counsel. Certain other Legal matters will be passed upon for the City by Pamela K .skin, (squire, City Attorney, and by Nabors, Giblin. & .Nickerson, P.A, Tampa, Florida, Disclosure Counsel to the City. Graylliobinoon, PA, Tampa, Florida is seeing as counsel to the underwriters. Stifei, Nicolaus & Company, incorporated, Orlando, Florida is serving as Financial Adrisor to the City. It is expected that the Series 2017 Bonds, in definitive boot -entry form, will be available far delivery through DTC in New York, New York on or about F76ruary 38, 2017. BofA Merrill Lynch RBC Capital Markets, LLC Wells Fargo Securities January 3-.:R I" Bank of America "�I Merrill Lynch ■ a ■ a • ■ a a a a U a a a ■ U I ■ a a a ■ ■ ■ a a • • • ■ ■ ■ ■ Moody's Rating Report ■ ■ • ■ • ■ ■ • • • ■ • ■ • a • Bankof America ▪ Merrill Lynch ✓ • LLLARVVAl 'LR ARIKAIT BLAU11}111.• MY TO SLY -II U.S. PUBLIC FINANCE MOODY'S INVESTORS SERVICE CREDIT OPINION 19 January 2017 New Issue Rate this Research Clearwater (City of), FL Water & Sewer Enterprise New Issue - Moody's Upgrades to Aa2 Clearwater, FL's W&S Rev. Bonds; Assigns Aa2 to Rev. Ref. Bonds, Series 2017 mSummary Rating Rationale Moody's Investors Service has assigned a rating of Aa2 to the City of Clearwater's (FL) $64.7 million Water and Sewer Revenue Refunding Bonds, Series 2017. Concurrently, Moody's has upgraded the rating to Aa2 from Aa3 on $50.6 million outstanding parity bonds. The upgrade to Aa2 reflects the system's established and stable customer base, well- managed financial operations supported by annual rate increases, healthy debt service coverage with strong liquidity levels, above average debt profile, and adequate legal provisions. Contacts Nisha Rajan 212-553-1978 Associate Analyst nisha.rajan@moodys.com Edward (Ted) 212-553-6990 Damutz VP -5r Credit Officer edward.damutz@moodys.com Credit Strengths Stable service area with limited customer concentration » Sound financial position with strong liquidity Prudent management that implements annual rate increases and multi-year financial planning Credit Challenges » Service area is largely built out, Limiting future growth Below average wealth levels Above average debt ratio and leveraged capital improvement plan Weather related pressures due to coastal location Rating Outlook Outlooks are not usually assigned to local government credits with this amount of debt outstanding. Factors that Could Lead to an Upgrade Significant and sustained growth in customer base and demand Improved wealth levels » Material improvement in debt service coverage MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Factors that Could Lead to a Downgrade » Deterioration of debt service coverage and/or liquidity » Significant increase in debt or capital needs Key Indicators Clearwater (City of), FL Water & Sewer Enterprise System Characteristics Asset Condition (Net Fixed Assets / Annual Depreciation) 20 years System Size - O&M (in $0005) 47,681 Service Area Wealth: MFI % of US median 90.2% Legal Provisions Rate Covenant (x) 1.15 Debt Service Reserve Requirement No DSRF (after 2018) Financial Strength 2011 2012 2013 2014 2015 Operating Revenue ($000) 61,473 63,743 64,665 68,601 72,303 O&M ($000) 40,304 38,479 37,001 44,732 47,681 Long -Term Debt ($000) 147,467 142,281 149,982 146,099 140,885 Annual Debt Service Coverage (x) 1.45 1.90 2.08 1.86 2.13 Rate Covenant 1.15 1.15 1.15 1.15 1.15 Cash on Hand 342 days 399 days 442 days 201 days 290 days Debt to Operating Revenues (x) 2.4x 2.2x 2.3x 2.1x 1.9x Source: Moody's Investors Service Detailed Rating Considerations Service Area and System Characteristics: Mature Service Area; Sufficient Treatment Capacity and Supply The enterprise is comprised of water, wastewater, and reclaimed water systems, and provides treatment and distribution services to approximately 150,000, including Clearwater's permanent population (112,400) and portions of unincorporated Pinellas County. The city is located approximately 22 miles west of the Citof Tampa (Aa1 Stable), and key drivers of the local economy include tourism, a Large retiree population (represented by the city's median age of 44 years), and related professional services, notably health care and technical/scientific positions. While the city's economy and tax base suffered during the recent recession, it has since experienced three years of full value growth to reach $12.97 billion (fiscal 2016), and unemployment has remained low and steady since 2015 at 4.4%. Population growth in the area has been moderate, increasing 4.4% since 2010, and wealth levels are slightly below average with median -family income equivalent to 90.2% of the nation. The service area is mature and largely built -out, and the system has sufficient water supply and water, sewer, and reclaimed water treatment capacity to accommodate the population growth and meet the area's long-term needs. As of fiscal 2016 (unaudited), there were 37,302 water service connections and 33,763 sewer service connections, the majority of which were residential. The system's water is supplied from the city's existing well fields and through the purchase of water from Pinellas County, which is stipulated through a 30 -year interlocal agreement (expires 2035). The bulk water agreement allows the City of Clearwater to receive up to 15 MGD on an as -needed basis. Pinellas County is under contract to obtain 100% of its water supply from Tampa Bay Water (Aa1 This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 2 19 January 2017 Clearwater (City of), FL Water & Sewer Enterprise: New Issue - Moody's Upgrades to Aa2 Clearwater, FL's W&S Rev. Bonds; Assigns Aa2 to Rev. Ref. Bonds, Series 2017 R a 1 1 Stable), the exclusive supplier of water to the Tampa Bay region, and it currently receives approximately 49 MGD (although it has been 1 previously allotted 70 MGD). MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE The city's own water supply is derived from 43 production wells from the Floridan Aquifer, and has permitted withdrawal capacity of 14.3 MGD. The water supply permit is regulated by the Southwest Florida Water Management District (SWFWMD), which expires in December 2039. The city operates three water treatment plants (WTP): Reverse Osmosis (RO) #1 (capacity of 4.5 MGD), RO #2 1 (brought online in 2015, with capacity of 6.25 MGD), and WTP #3 (capacity of 1.0 MGD), rendering production capacity up to 11.75 MGD. The city plans to convert WTP #3 to an RO plant between 2018-2020, which will further increase water production. The system has decreased its reliance on the County for its water supply, and on average over the last five years, has purchased 35% r of its maximum amount from Pinellas County and produced the remaining 65%. In fiscal 2016, the system produced an average of 8.0 MGD (68%) and purchased an average of 3.7 MGD (32%) from the county. The demand on the water system has remained fairly stable, with fiscal 2015 producing an average of 12.1 MGD with a peak of 13.9 MGD, and fiscal 2016 producing an average of 11.7 MGD with a peak of 14.0 MGD, in comparison to a strong combined capacity of 26.75 MGD. • The customer base is large, with the top ten water customers comprising just 11.9% of total revenues in fiscal 2016. Water storage is i adequate, with 8 storage tanks and a capacity of 25.5 million gallons. The water system reports to be in compliance with alt material state and federal regulations. Water loss was estimated at 5.44% in fiscal 2015. 1 The city also operates a sewage collection system and three wastewater treatment plants (WWTP): Marshall Street (10.0 MGD'-), S Northeast (13.5 MGD) and East (5.0 MGD), yielding a combined design capacity of 28.5 MGD. All three plants use Advanced Wastewater Treatment processes, and Marshall Street and Northeast atso provide sludge dewatering. The plants operate under five- • year FDEP permits, and two are currently in the renewal process and are expected to be approved (Marshall Street's FDEP permit was successfully renewed, effective February 2017-2022; Northeast and East were submitted for renewal in December 2016 and current • permits expire July 2017, and June 2017 respectively). Northeast and East WWTPs are reportedly in compliance with alt water quality regulations. 1 Wastewater usage has remained fairly stable over the past four years, and average usage was 13.8 MGD in fiscal 2015 and 13.5 MGD in fiscal 2016, in relation to its ample 28.5 MGD treatment capacity. Peak system flows in fiscal 2016 by plant are Marshall Street • 19.49 MGD, Northeast 14.41 MGD, and East 7 MGD. The top ten wastewater customers account for just 9.9% of total revenues S in fiscal 2016, which has remained fairly consistent since 2010. The city atso has an interlocal agreement with the City of Safety Harbor (expiring 2018) related to the Northeast WWTP, whereby the city and Safety Harbor share plant O&M costs (effective cost IS reimbursement). The reclaimed water system has a 12 MGD Master Reuse Permit Capacity that is treated at alt three WWTPs, and has 15 MG of storage across three plants (Marshall Street, Northeast, and Skycrest). The city has an interlocal agreement with Pinellas County to provide a minimum of 3 MGD of reclaimed water, and in fiscal 2016, average daily usage was 5.17 MGD, with 7,441 reclaimed water service 1 connections, a 34% increase from 2012. 1 The city is still under a consent order (CO) on its Marshall Street WWTP due to exceeding limits on the discharge of disinfection byproducts (DBPs) in late 2010. The city has addressed the CO by funding $10.2 million in plant improvements (including refurbishing effluent filters) and modifying its operating permit. The city plans to resolve the CO by August 2017. . Additionally, in August 2016 Marshall Street experienced an influent pump station failure due to Hurricane Hermine, which caused sanitary sewer outflows in the service area. The city initiated engineering studies to bring the pump station back to service, which will I most likely result in development of a new station costing around 510-14 miltion. The city is working with FEMA and insurance carriers to determine funding sources for this station. In the meantime, they have implemented reusable controls and 3 new pumps for around w $2.2 million, funded by the system's reserves. Because the system's management has actively assessed and funded improvements to the WWTP, Moody's believes that the risk will be manageable given restoration efforts and its integration into financial planning. 1 1 1 1 3 19 January 2017 Clearwater (City of), FL Water & Sewer Enterprise: New Issue - Moody's Upgrades to Aa2 Clearwater, FL's W&5 Rev. Bonds; Assigns Aa2 to Rev. Ref. Bonds, Series 2017 ■ MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Debt Service Coverage and Liquidity: Solid Financial Position as a Result of Rate Increases and Conservative Long -Term Planning The city's strong willingness to implement rate increases has contributed to a solid financial position and ability to appropriately meet operating and capital costs, debt service needs, and reserve requirements. Between fiscal 2012 and 2016, the city implemented annual rate increases of 4.5% across water, wastewater, and reclaimed water rates, and annual debt service coverage increased to 2.13 times in fiscal 2015, and has averaged approximately 1.99 times over the past four years. Unaudited fiscal 2016 results reflect another stable year with coverage expected at 2.12 times. In July 2016, the city commissioned a new rate study that concluded annual increases of 3.75% to water, wastewater, and reclaimed water rates from fiscal 2017 through 2026 would provide adequate revenue to meet the system's needs going forward. The City Council approved the annual increases between fiscal 2017 and 2021, and plans to adopt the same ordinance from fiscal 2022 through 2026. For fiscal 2017 and 2018, management has budgeted coverage of 2.31 and 1.87 times respectively, which includes the annual rate increases as well as a planned new debt issuance of approximately $75 million in 2018 to fund capital projects. The rate study projects coverage to remain between 1.88 times and 2.02 times from fiscal 2019 to 2026, including debt service from future borrowings, but before inter -fund transfers to the General Fund (Payment in Lieu of Taxes (PILOTs)) and Renewal and Replacement (R&R). PILOT payments are sized at 5.5% of the prior year's operating revenues. R&R transfers are calculated as 5% of the prior year's total operating revenue, and the city has planned additional R&R transfers starting in fiscal 2016 to fund capital projects with cash rather than additional debt. The first additional R&R transfer will be $1 million, and will thereafter increase by $1 million each year until 2025, when it reaches $10 million. If implemented, this will further bolster liquidity levels and ease the debt burden. LIQUIDITY The system's liquidity position is strong, with unrestricted cash and investments of $37.9 million in relation to operating expenses of $47.7 million, yielding 290 days cash on hand in fiscal 2015. Operating expenses include transfers from the system to the city's general fund, which totaled 53.6 million in fiscal 2015. Liquidity is expected to remain healthy, with unaudited financial results reporting a year-end cash balance of $47 million in fiscal 2016. The system also has a financial policy of maintaining an unrestricted working capital reserve equal to three months (25%) of operations and maintenance and purchased water expenses, which contributes to the system's financial stability. Exhibit 2 Historical: Days Cash on Hand Fiscal 2011-2015 v 2 0 u 500 days 450 days 400 days 350 days 300 days 250 days 200 days 150 days 100 days 50 days days 2011 Source: Clearwater, FL Audited Financial Statements 2012 2013 Year 2014 2015 Debt and Legal Covenants Security provisions for the Series 2017 bonds include a rate covenant of 1.15 times annual debt service, and an additional bonds test of 1.20 times maximum annual debt service (MADS). Currently, all outstanding bonds are secured by a cash -funded debt service reserve fund (DSRF) at MADS, however, per a 2014 "Amending Ordinance", the city is allowed to maintain separate DSRFs, funded at $0 if so 4 19 January 2017 Clearwater (City of), FL Water & Sewer Enterprise: New Issue - Moody's Upgrades to Aa2 Clearwater, FL's W&S Rev. Bonds; Assigns Aa2 to Rev. Ref. Bonds, Series 2017 1 1 ■ 1 1 1 1 ✓ 1 1 1 1 1 1 1 1 1 a 1 1 1 1 a 1 1 s 1 1 • ■ a MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE desired, upon two-thirds consent from outstanding bondholders. The Series 2017 bonds will automatically agree to these provisions. If only the Series 2009A is refunded, then the Series 2017 bonds will continue to be secured by the existing cash -funded DSRF through 2018 (the final maturity of the Series 2009A bonds). Thereafter, the DSRF will be eliminated for the Series 2017 bonds. If a portion of the Series 2011 bonds are refunded as well, there will not be a DSRF. While the lack of a DSRF is viewed as a credit weakness, the system's liquidity and financial position somewhat mitigates this factor. White the system's debt position will remain elevated because of additional borrowing plans, the city will likely manage the current high debt levels given management's history of prudent budgeting, well developed capital and debt plans, and timely rate increases to fund pay -go as well as maintain stable metrics. As of fiscal 2015, the debt ratio was 42% and debt to operating revenues was 1.99 times. After the 2018 new debt issuance, debt to operating revenues is expected to increase to 2.63 times. The system maintains a multi-year CIP of approximately $349 million from fiscal 2016-2026, comprised predominantly of wastewater projects (63%), water projects (32%), and public works complex (5%). Funding sources include approximately 55% from future bond proceeds (noted above), 31% from R&R, 10% from sewer revenues, and 3% from water revenues. DEBT STRUCTURE Following the refunding, the system's outstanding parity debt of $77.8 million includes the following rated issuances: Series 2003 ($510 thousand), Series 2009A ($420 thousand), Series 20096 ($10 million), and Series 2011 ($39.6 million), as well as unrated Series 2014 ($27.2 million). The ten year principal amortization rate is 34.5%, and all of the system's debt is fixed rate. DEBT -RELATED DERIVATIVES The system is not party to any derivative agreements. Management and Governance The system is operated by Clearwater's Public Utilities Department. The city has sole rate setting authority for the system, which are adopted through ordinance and require approval by the City Council. Legal Security The bonds are secured by net revenues of the combined water and sewer system. Use of Proceeds Proceeds from this issue ($64.7 million) will be used to refund a portion of the Series 2009A bonds (maturities between 2020-2039) for an estimated net present value savings of $5 million, or 7.4% of refunded principal with no extension of maturities. If market conditions permit, the city may also refund a portion of the Series 2011 bonds. Obligor Profile The system provides water, wastewater, and reclaimed water services to the City of Clearwater and contracts with surrounding jurisdictions. As of 2016, the population of Clearwater was estimated at 112,400. Methodology The principal methodology used in this rating was US Municipal Utility Revenue Debt published in December 2014. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. 5 19 January 2017 Clearwater (City of), FL Water & Sewer Enterprise: New Issue - Moody's Upgrades to Aa2 Clearwater, FL's W&S Rev. Bonds; Assigns Aa2 to Rev. Ref. Bonds, Series 2017 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Ratings Exhibit 3 Clearwater (City of) FL Issue Rating Water and Sewer Revenue Refunding Bonds, Aa2 Series 2017 Rating Type Underlying LT Sale Amount $64,670,000 Expected Sale Date 01/26/2017 Rating Description Revenue: Government Enterprise Source: Moody's Investors Service Endnotes 1 Marshall Street has a short-term peak flow of 25 MGD 6 19 January 2017 Clearwater (City of), FL Water & Sewer Enterprise: New Issue - Moody's Upgrades to Aa2 Clearwater, FL's W&S Rev. Bonds; Assigns Aa2 to Rev. Ref. Bonds, Series 2017 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE © 2017 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES ("MIS") ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBTOR DEBT -LIKE SECURITIES, AND MOODY'S PUBLICATIONS MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT -LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL -BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY'S CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS OR MOODY'S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts alt necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third -party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody's publications. To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any Toss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S. To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody's Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy." Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY'S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser. Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements. REPORT NUMBER 1056578 7 19 January 2017 Clearwater (City of), FL Water & Sewer Enterprise: New Issue - Moody's Upgrades to Aa2 Clearwater, FL's W&S Rev. Bonds; Assigns Aa2 to Rev. Ref. Bonds, Series 2017 t ■ ■ ■ ■ S&P Rating Report • It a a ✓ a I I a ■ _ ▪ Bank of America • Merrill Lynch ■ ■ a S al S&P Global Ratings ■ it I a r I a a i a a •' a a a I a I a aI' a a ■ a RatingsDirect" Summary: Clearwater, Florida; Water/Sewer Primary Credit Analyst: Edward R McGlade, New York (1) 212-438-2061; edward.mcglade@spglobal.com Secondary Contact: Scott D Garrigan, New York (1) 312-233-7014; scott.garrigan@spglobal.com Table Of Contents Rationale Outlook W W W. STANDARDANDPOORS.COM/RATINGSDIRECT THIS WAS PREPARED EXCLUSIVELY FOR USER AMANDA SCHLANG. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. JANUARY 20, 2017 1 1788520 301730372 Summary: Clearwater, Florida; Water/ Sewer Credit Profile US$65.73 mil wtr and swr rev rfdg bnds ser 2017 due 09/30/2040 Long Term Rating Clearwater wtr & swr Long Term Rating Rationale AA/Stable AA/Stable New Upgraded S&P Global Ratings raised its long-term rating on Clearwater, Fla.'s outstanding water and sewer revenue bonds to 'AA' from 'AA-'. Additionally, we assigned our 'AA' rating to the city's series 2017 water and sewer revenue refunding bonds. The outlook is stable. The upgrade reflects the very strong enterprise and financial risk profiles of the system, as well as the revision of our water and sewer criteria (published Jan. 19, 2016, on RatingsDirect). The bonds are pledged by net water and sewer system revenues. In our opinion, the bond provisions are adequate. The city has agreed to maintain rates that yield net revenue equal to 115% of annual debt service. Bond provisions include a 1.2x maximum annual debt service (MADS) additional bonds test and a reserve funded at MADS, providing additional liquidity. However, with the issuance of the these bonds and the series 2014 bonds, the issuer is closer to achieving two-thirds approval to no longer need to fund a reserve fund. The very strong enterprise risk profile reflects: • The diverse, primarily residential customer base, which participates in the broad and diverse Tampa -St. Petersburg -Clearwater metropolitan statistical area (MSA); • Very low industry risk as a monopolistic service provider of an essential public utility; • A pressured market position as water and sewer rates are over $96.57 for 6,000 gallons of usage, although the city reports the average customer uses only 4,000 gallons; and • Good operational management practice and policies, highlighted by strong rate -setting practices with annual rate increases planned through fiscal 2021. The very strong financial risk profile reflects the system's: • Very strong historical debt service coverage (DSC); • Very strong liquidity position; • Moderate debt burden as measured by a debt -to -capitalization ratio of 45.2%; and • Good financial management practices and policies. Enterprise risk Clearwater (estimated population 112,400), on Florida's west coast, is the Pinellas County seat. It is about 20 miles west of Tampa and 20 miles north of St. Petersburg. Tourism remains the most important component of the economy. Management states the local economy has been stable in recent years. We consider the income levels adequate with a WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JANUARY 20, 2017 2 THIS WAS PREPARED EXCLUSIVELY FOR USER AMANDA SCHLANG. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. 1788520 I 301730372 a a s a a a a a r I a a a N a I S a a a r a I a • • I I I 1 1 Summary: Clearwater, Florida; Water/Sewer 1 median household effective buying income (MHHEBI) 82% of national average. The city's unemployment rate for October 2016 was 4.4%, lower than the state and nation. 1 Consistent with "Methodology: Industry Risk" (published Nov. 19, 2013, on RatingsDirect), we consider industry risk for the system to be very low, the most favorable assessment possible on a '1' to '6' scale, with '1' being the best. In our view, utility rates are high compared with the service area's income levels. We calculate the monthly water and 1111 sewer residential rate at $96.57, or 3.1% of MHHEBI, for a usage of 6,000 gallons. Based on our operational management assessment, we view the city to be a '2' on a scale of 1-6, with '1' being the strongest. This assessment reflects that the water and sewer system's customer base is primarily residential and diverse. The system serves about 37,302 water accounts, 33,763 sewer accounts, and 7,441 reclaimed water accounts. The water accounts grew at an average annual rate of about 0.46% during the past five years. The growth in sewer customers has been relatively stable, with an average annual rate of less than 1% during the same period. Management expects future customer growth be stable. In our view the customer base is diverse. The leading customers include major institutional/governmental agencies of Morton Plant Hospital, the city of Clearwater, the Church of Scientology, and Pinellas County Schools. The city operates a water, sewer, and reclaimed water system. In our opinion, the system has sufficient operational capacity to meet its current and future projected demand. The water system consists of three potable groundwater treatment plants, two of which are reverse -osmosis plants, as well as interconnections with the Pinellas County Utilities water system for the wholesale purchase of water. The city expanded its Reverse Osmosis One plant in 2014, and completed the new Reverse Osmosis Two plant in June 2015; combined, these two plants produce 7.8 million gallons per day (mgd). The current Water Plant Three produces 1 mgd and is expected to be upgraded and converted to a reverse -osmosis plant by 2020. This will reduce the city's reliance on the county for water. The water agreement awith the county allows Clearwater to purchase up to 15 mgd. The city currently purchases roughly 3.7 mgd, down from 8.8 mgd in 2008. According to officials, the city well field has permits to withdraw up to 6.25 mgd from the Floridan Aquifer and the combined water treatment permitted capacity is 25 mgd. Eight storage tanks provide 25.5 million gallons of storage capacity. In addition, the sewer system consists of three wastewater treatment plants (WWTPs) with a total treatment capacity of 28.5 mgd, providing, in our view, ample capacity to meet the city's 13.5 mgd average annual daily flow in 2016. Two 1111 of the plants are in compliance with all water quality regulations, while the Marshall Street WWTP is currently under a consent order for effluent limitations exceeding events which occurred in 2010. The city has made modifications and expects the closure of the consent order in the near future. Additionally, this plant experienced a significant influent 11 pump failure during Hurricane Hermine in late August -early September 2016 and the city is working with its engineers, FEMA, and the insurance providers to remedy the situation. 1 Management had approved rate increases of 3.75% through fiscal years 2017-2021. According to officials, rates for both systems remain comparable with surrounding utilities despite annual rate increases. This is consistent with 111 management's strong practice of approving a series of rate increases generally running for about five years out. 1 1 WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JANUARY 20, 2017 3 THIS WAS PREPARED EXCLUSIVELY FOR USER AMANDA SCHLANG. 1788520 1 301730372 NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. Summary: Clearwater, Florida; Water/Sewer Financial risk In our opinion, the system's financial performance in the past three years has been improving and is now at levels we consider strong. Based on the audited financial statements, the total DSC improved from 1.44x in fiscal 2011 to 1.54x in fiscal 2015. Financial performance during this period reflected enhanced revenues due to annual rate increases and a decline in operating expenses. We understand that the utility fund makes annual transfers of payment in lieu of taxes (PILOT) contributions to the general fund. Based on management's 10 -year forecast (i.e., fiscal years 2014-2024), which assumes planned rate increases that have not yet been approved and future bond issues, the total DSC before transfers is expected to be not less than 1.87x. Liquidity has been strong in the past three fiscal years, and we expect that it will likely remain good to strong. Unrestricted cash at the end of fiscal 2015 totaled $37.9 million, equivalent to 269 days of operating expenses, which we consider strong. The city has a formally adopted reserve policy that will maintain a level pursuant to the most recent rate review, or equivalent to three months' operations and maintenance expense, whichever is greater. As per the rate study report, the city projects that unrestricted cash will range between $22.9 million and $33.6 million from 2017 to 2026. We consider the city's debt burden moderate with a debt -to -capitalization ratio equal to 45.2%. It is our understanding that the city's capital improvement program (CIP) totals $160.0 million for fiscal years 2017 to 2022 with debt issuance funding little more than half of the CIP. We understand the city plans to issue $88 million of additional debt through fiscal years 2018 to 2020. We also understand the system entered into a private placement for the issuance of $27.6 million of series 2014 water and sewer revenue refunding bonds, which TD Bank purchased. The 2014 bonds are issued pursuant to a supplemental resolution under the original indenture, on parity with the system's revenue bonds and guided by the same bond provisions. Given this, we do not consider the transaction as presenting any additional contingent liquidity risk. Based on our financial management assessment, we view the system to be a '2' on a scale of 1-6, with '1' being the strongest. Revenue and expenses assumptions are strong, and interim financial reporting is provided to the board through monthly reports. The city has adopted a formal reserve policy for the water system stipulating a minimum of three months' cash on hand in the operating fund. Management maintains a six-year CIP. The city regularly has a ten-year projection of operations and liquidity levels produced. Outlook The stable outlook reflects our expectation that city will continue to raise rates as needed to maintain strong DSC and strong liquidity as it implements its CIP. S&P Global expects that the slow customer base growth, coupled with sufficient capital already in place, will also keep debt levels from rising. Upside scenario Once the system has completed the capital program and no longer relies on the county for water, future capital plans are more moderate, and coverage and liquidity levels were to increase significantly, then we could consider an upgrade. WWW.STANDARDANDPOORS.COM/RATINOSDIRECT JANUARY 20, 2017 4 THIS WAS PREPARED EXCLUSIVELY FOR USER AMANDA SCHLANG. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. 1788520 1 301730372 a Summary: Clearwater, Florida; Water/Sewer Downside scenario If there is material deterioration in financial performance while the city addresses its capital needs, we might lower the rating. Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com. All ratings affected by this rating action can be found on the S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column. W W W. STANDARDANDPOORS. COM/RATINGSDIRECT THIS WAS PREPARED EXCLUSIVELY FOR USER AMANDA SCHLANG. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. JANUARY 20, 2017 5 1788520 1 301730372 Copyright © 2017 by Standard & Poor's Financial Services LLC. All rights reserved. No content (including ratings, credit -related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third -party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit -related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P's opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription) and www.spcapitaliq.com (subscription) and may be distributed through other means, including via S&P publications and third -party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees. STANDARD & POOR'S, S&P and RATINGSDIRECT are registered trademarks of Standard & Poor's Financial Services LLC. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JANUARY 20, 2017 0 THIS WAS PREPARED EXCLUSIVELY FOR USER AMANDA SCHLANG. NOT FOR REDISTRIBUTION UNLESS OTHERWISE PERMITTED. 1788520 1 301730372 a 1 1 1 1 1 1 a a 1 1 a a a R 1 1 f1 1 a 1 a a a Pricing Wires a U • a 3 a a a a 0 a I a I Bank of America �� P a Merrill Lynch a I CLEARWATER 1 Rec'd Date/Time (EST) Sender ST Wire Type/Title it 1/20/2017 3:33:48 PM BA Merrill NY Preliminary Pricing Wire I RE: $ 64,740,000* CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS SERIES 2017 • 1) 1 WE PLAN TO PRICE THIS ISSUE ON THURSDAY, JANUARY 26, 2017. POS LINK: https://www.munios.com/munios-notice.aspx?i=QRJKOpDWpzL PRELIMINARY STRUCTURE IS AS FOLLOWS: 1) MOODY'S: Aa2 S&P: AA FITCH: (STABLE) DATED:02/28/2017 FIRST COUPON:06/01/2017 PO DUE: 12/01 ADD'L ill TAKEDOWN MATURITY AMOUNT* COUPON PRICE ( Pts ) a 12/01/2020 380M 12/01/2021 390M 12/01/2022 405M EV 12/01/2023 430M 12/01/2024 445M II 12/01/2025 470M 12/01/2026 490M II 12/01/2027 515M 12/01/2028 540M II 12/01/2029 560M 12/01/2030 585M 12/01/2031 615M MO 12/01/2032 645M 12/01/2033 7,130M PO 12/01/2034 7,495M 12/01/2035 7,880M II 12/01/2036 8,285M 12/01/2037 8,705M II 12/01/2038 9,155M 12/01/2039 9,620M • CALL FEATURES: Optional call in 12/01/2026 @ 100.00 * - APPROXIMATE SUBJECT TO CHANGE II The Award is expected on Friday, January 27, 2017. Delivery is firm for Tuesday, February 28, 2017. This issue is book entry only. This issue is clearing through DTC. 10 Bank of America Merrill Lynch II RBC Capital Markets Wells Fargo Securities (trade name for Wells Fargo Bank N.A. Municipal Products Group) 1 By: Bank of America Merrill Lynch New York, NY Master Message # Deal Type Neg Rec'd Date/Time (EST) Sender ST Wire Type/Title 1/23/2017 4:37:30 PM BA Merrill NY Negotiated AAU Wire RE: $ 64,740,000 CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS ,SERIES 2017 Master Message # We, as Representative for the Managers, are forming a Group of Underwriters, including ourselves and other Managers, to submit a proposal for the purchase of the Securities described above. You are invited to participate pursuant to the terms of the Master Agreement Among Underwriters. You are presumed to be knowledgeable regarding the terms of the Master Agreement. The members of the account and their respective initial participation are set forth below. The following information applies to the proposed offering: Preliminary Official Statement relating to the Securities dated: Expected Offering Date: 1/26/2017 Expected Award Date: 1/27/2017 Expected Closing Date: 2/28/2017 Prevailing Time: Eastern Printer Information: Telephone: Fax: Email: Representative's Syndicate Address: Bank of America Merrill Lynch One Bryant Park 9th Floor New York,NY 10036 Telephone: (212)449-5095 Fax: (212)548-8747 You must respond to this invitation by 12:00 PM Eastern on Tuesday, January 24, 2017. The Master Agreement Among Underwriters Terms shall apply to the offering and distribution of the Securities described above except as follows: Deal Type Neg We will provide to the Issuer, on behalf of all of the Underwriters, the disclosures required by MSRB Rule G-17 as set forth in MSRB Notice 2012-25 (May 7, 2012) concerning the Underwriters' role and Underwriters' compensation. We agree to furnish a copy of such disclosures to each Underwriter. Each Underwriter is reminded that it is responsible under this Notice to provide to the Issuer disclosure of any potential or actual material conflicts of interest relating to it. UNDERWRITERS PARTICIPATIONS Bank of America Merrill Lynch RBC Capital Markets Wells Fargo Securities (trade name for Wells Fargo Bank N.A. Municipal Products Group) ISSUE TOTAL: 60.000% 20.000% 20.000% $ 64,740,000 1 m 1 1 1 1 1 rn 1 1 1 1 1 1 1 1 1 • • • • • • U a • Recd Date/Time (EST) 1/26/2017 9:19:53 AM Sender BA Merrill ST NY RE: $ 67,690,000* CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS SERIES 2017 ** INCLUDING TAKEDOWNS WE HAVE A RELEASE. ORDERS TODAY UNTIL 11AM EASTERN. ** PRELIMINARY PRICING IS AS U ▪ MOODY'S: Aa2 ■ DATED: 02/28/2017 a • • • DUE: 12/01 MATURITY 12/01/2020 12/01/2021 a 12/01/2022 ■ 12/01/2023 ▪ 12/01/2024 ■ 12/01/2025 ■ 12/01/2026 • 12/01/2027 . 12/01/2028 . 12/01/2029 . 12/01/2030 12/01/2031 U 12/01/2032 ■ 12/01/2033 ■ 12/01/2034 • 12/01/2035 12/01/2036 12/01/2037 U FOLLOWS: Wire Type/Title Preliminary Pricing Wire S&P: AA FITCH: (STABLE) FIRST COUPON:06/01/2017 AMOUNT* COUPON 600M 5.00% (Approx. 625M 5.00% (Approx. 650M 5.00% (Approx. 685M 5.00% (Approx. 715M 5.00% (Approx. 755M 5.00% (Approx. 785M 5.00% (Approx. 830M 5.00% (Approx. $ 870M 5.00% (Approx. $ 905M 5.00% (Approx. $ 955M 5.00% (Approx. $ 1,000M 5.00% (Approx. $ 1,050M 5.00% (Approx. $ 7,115M 5.00% (Approx. $ 7,420M 3.50% (Approx. 7,750M 5.00% (Approx. $ 8,145M 5.00% (Approx. $ 8,560M 5.00% (Approx. $ ADD'L TAKEDOWN PRICE ( Pts ) MMD Spread 1.63 0.30 +19 $ Price 112.234) 1.86 0.30 +23 $ Price 114.232) 2.05 0.30 +25 $ Price 115.942) 2.24 0.30 +25 $ Price 117.217) 2.39 0.30 +27 $ Price 118.379) 2.54 0.30 +30 $ Price 119.204) 2.63 0.30 +30 $ Price 120.277) 2.74 0.30 +33 Price PTC 12/01/2026 119.232) 2.83 0.30 +35 Price PTC 12/01/2026 118.386) 2.91 0.30 +35 Price PTC 12/01/2026 117.639) 2.97 0.30 +35 Price PTC 12/01/2026 117.083) 3.04 0.30 +35 Price PTC 12/01/2026 116.438) 3.10 0.30 +35 Price PTC 12/01/2026 115.889) 3.16 0.30 +35 Price PTC 12/01/2026 115.342) 3.67 0.30 +80 $ Price 97.792) 3.27 0.30 +35 Price PTC 12/01/2026 114.349) 3.31 0.30 +35 Price PTC 12/01/2026 113.990) 3.34 0.30 +35 Price PTC 12/01/2026 113.722) Master Message # Deal Type Neg 12/01/2038 8,955M 4.00% 3.70 0.30 +70 (Approx. $ Price PTC 12/01/2026 102.434) 12/01/2039 9,320M 4.00% 3.71 0.30 +70 (Approx. $ Price PTC 12/01/2026 102.351) CALL FEATURES: Optional call in 12/01/2026 @ 100.00 - APPROXIMATE SUBJECT TO CHANGE Order period until today 11:00 AM, Eastern, Thursday, 01/26/17. Please use Electronic Order Entry to enter orders or call (212) 449-5095 . The managers reserve the right to terminate or extend the order period prior to or later than the above-mentioned time and date and to confirm bonds at their discretion. Blue Sky Survey Filings required: Cleared -AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, GU, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, PR, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY Not applied for -OT, VI, BE, AS, UM, MP PRIORITY OF ORDERS AS FOLLOWS: 1. Florida Retail 2. National Retail 3. Group Net* 4. Member *Except if an investor is affiliated with a syndicate member in which case the economics will be reallocated among the other managers. Please contact the Senior Manager. PRIORITY POLICY: The Senior Manager requests the identification of all priority orders at the time the orders are entered. DEFINITION OF RETAIL: RETAIL ORDERS ARE DEFINED AS ORDERS FOR FLORIDA OR NATIONAL INDIVIDUAL INVESTORS AND BANK TRUST DEPARTMENTS ACTING ON BEHALF OF INDIVIDUAL INVESTORS, WITH A MAXIMUM OF $250,000 PER ORDER. RETAIL ORDERS DO NOT INCLUDE PROFESSIONAL RETAIL, INVESTMENT ADVISORS, MONEY MANAGERS, OR ANY OTHER INSTITUTIONS NOT LISTED ABOVE. ALL RETAIL ORDERS MUST INCLUDE ZIP CODES. THE CITY OF CLEARWATER RESERVES THE RIGHT TO REQUEST COPIES OF ANY OR ALL CONFIRMATIONS OF THE SALE AND MAY RECOVER TAKEDOWN AMOUNTS SHOULD NON BONA FIDE ORDERS BE DISCOVERED. The Award is expected on Friday, January 27, 2017. Delivery is firm for Tuesday, February 28, 2017. This issue is book entry only. This issue is clearing through DTC. Bank of America Merrill Lynch RBC Capital Markets Wells Fargo Securities (trade name for Wells Fargo Bank N.A. Municipal Products Group) By: Bank of America Merrill Lynch New York, NY • U • • Rec'd Date/Time (EST) 1/26/2017 1:14:30 PM Sender ST Wire Type/Title BA Merrill NY Repricing Wire RE: $ 67,690,000* CITY OF CLEARWATER, FLORIDA WATER AND SEWER REVENUE REFUNDING BONDS SERIES 2017 WE HAVE RECEIVED THE VERBAL AWARD. ACCOUNT IS CLOSED. ALL ORDERS ARE CONSIDERED GOOD UNLESS OTHERWISE NOTIFIED. REPRICING IS AS FOLLOWS: MOODY'S: Aa2 DATED:02/28/2017 . DUE: 12/01 I mm MATURITY MO 12/01/2020 12/01/2021 12/01/2022 ■ 12/01/2023 ■ 12/01/2024 ■ 12/01/2025 ■ 12/01/2026 12/01/2027 U 12/01/2028 • 12/01/2029 12/01/2030 II 12/01/2031 12/01/2032 12/01/2033 $ 12/01/2034 ■ 12/01/2035 12/01/2036 12/01/2037 U 12/01/2038 U S&P: AA FITCH: (STABLE) FIRST COUPON:06/01/2017 AMOUNT* COUPON 600M 5.00% (Approx. 625M 5.00% (Approx. 650M 5.00% (Approx. 685M 5.00% (Approx. 715M 5.00% (Approx. 755M 5.00% (Approx. 785M 5.00% (Approx. 830M 5.00% (Approx. $ 870M 5.00% (Approx. $ 905M 5.00% (Approx. $ 955M 5.00% (Approx. $ 1,000M 5.00% (Approx. $ 1,050M 5.00% (Approx. $ 7,115M 5.00% (Approx. $ 7,420M 3.50% (Approx. 7,750M 5.00% (Approx. $ 8,145M 4.00% (Approx. $ 8,560M 4.00% (Approx. $ 8,955M 4.00% ADD'L TAKEDOWN PRICE ( Pts ) 1.63 0.30 $ Price 112.234) 1.86 0.30 $ Price 114.232) 2.03 0.30 $ Price 116.060) 2.24 0.30 $ Price 117.217) 2.39 0.30 $ Price 118.379) 2.54 0.30 $ Price 119.204) 2.63 0.30 $ Price 120.277) 2.74 0.30 Price PTC 12/01/2026 2.83 0.30 Price PTC 12/01/2026 2.91 0.30 Price PTC 12/01/2026 2.97 0.30 Price PTC 12/01/2026 3.04 0.30 Price PTC 12/01/2026 3.10 0.30 Price PTC 12/01/2026 3.16 0.30 Price PTC 12/01/2026 3.73 0.30 $ Price 97.028) 3.27 0.30 Price PTC 12/01/2026 3.66 0.30 Price PTC 12/01/2026 3.69 0.30 Price PTC 12/01/2026 3.70 0.30 119.232) 118.386) 117.639) 117.083) 116.438) 115.889) 115.342) 114.349) 102.764) 102.516) Master Message # Deal Type Neg (Approx. $ Price PTC 12/01/2026 102.434) 12/01/2039 9,320M 4.00% 3.71 0.30 (Approx. $ Price PTC 12/01/2026 102.351) CALL FEATURES: Optional call in 12/01/2026 @ 100.00 * - APPROXIMATE SUBJECT TO CHANGE Blue Sky Survey Filings required: Cleared -AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, GU, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, PR, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY Not applied for -OT, VI, BE, AS, UM, MP PRIORITY OF ORDERS AS FOLLOWS: 1. Florida Retail 2. National Retail 3. Group Net* 4. Member *Except if an investor is affiliated with a syndicate member in which case the economics will be reallocated among the other managers. Please contact the Senior Manager. PRIORITY POLICY: The Senior Manager requests the identification of all priority orders at the time the orders are entered. DEFINITION OF RETAIL: RETAIL ORDERS ARE DEFINED AS ORDERS FOR FLORIDA OR NATIONAL INDIVIDUAL INVESTORS AND BANK TRUST DEPARTMENTS ACTING ON BEHALF OF INDIVIDUAL INVESTORS, WITH A MAXIMUM OF $250,000 PER ORDER. RETAIL ORDERS DO NOT INCLUDE PROFESSIONAL RETAIL, INVESTMENT ADVISORS, MONEY MANAGERS, OR ANY OTHER INSTITUTIONS NOT LISTED ABOVE. ALL RETAIL ORDERS MUST INCLUDE ZIP CODES. THE CITY OF CLEARWATER RESERVES THE RIGHT TO REQUEST COPIES OF ANY OR ALL CONFIRMATIONS OF THE SALE AND MAY RECOVER TAKEDOWN AMOUNTS SHOULD NON BONA FIDE ORDERS BE DISCOVERED. The Award is expected on Friday, January 27, 2017. Delivery is firm for Tuesday, February 28, 2017. This issue is book entry only. This issue is clearing through DTC. Bank of America Merrill Lynch RBC Capital Markets Wells Fargo Securities (trade name for Wells Fargo Bank N.A. Municipal Products Group) By: Bank of America Merrill Lynch New York, NY • a • • • • • • • • • • • • • U • • • • • • • • • U • • • • • I a Recd Date/Time (EST) Sender 1/27/2017 9:11:21 AM BA Merrill ■ RE: $ 69,270,000 CITY OF CLEARWATER, FLORIDA ■ WATER AND SEWER REVENUE REFUNDING SERIES 2017 a • • • • a BONDS WE HAVE RECEIVED THE WRITTEN AWARD. TICKETS WILL BE TODAY AT 11:15AM FINAL PRICING IS AS FOLLOWS: MOODY'S: Aa2 ST NY EASTERN. S&P: AA (STABLE) DATED:02/28/2017 FIRST COUPON:06/01/2017 DUE: 12/01 Wire Type/Title Final Pricing Wire ■ INITIAL TRADE DATE: 01/27/2017 @ 11:15AM Eastern a II 12/01/2020 12/01/2020 II 12/01/2021 . 12/01/2022 ■ 12/01/2023 ■ 12/01/2024 . 12/01/2025 12/01/2026 a 12/01/2027 a 12/01/2028 • 12/01/2029 II 12/01/2030 12/01/2031 11 12/01/2032 ■ 12/01/2033 ■ 12/01/2034 ■ 12/01/2035 . 12/01/2036 12/01/2037 U 12/01/2038 ■ AMOUNT COUPON 670M 5.00% (Approx. 700M 5.00% (Approx. 730M 5.00% (Approx. 770M 5.00% (Approx. 805M 5.00% (Approx. 850M 5.00% (Approx. 885M 5.00% (Approx. 930M 5.00% (Approx. $ 975M 5.00% (Approx. $ 1,020M 5.00% (Approx. $ 1,070M 5.00% (Approx. $ 1,125M 5.00% (Approx. $ 1,180M 5.00% (Approx. $ 7,220M 5.00% (Approx. $ 7,530M 3.50% (Approx. 7,860M 5.00% (Approx. $ 8,225M 4.00% (Approx. $ 8,555M 4.00% (Approx. $ 8,905M 4.00% ADD'L TAKEDOWN PRICE ( Pts ) 1.63 0.30 $ Price 112.234) 1.86 0.30 $ Price 114.232) 2.03 0.30 $ Price 116.060) 2.24 0.30 $ Price 117.217) 2.39 0.30 $ Price 118.379) 2.54 0.30 $ Price 119.204) 2.63 0.30 $ Price 120.277) 2.74 0.30 Price PTC 12/01/2026 2.83 0.30 Price PTC 12/01/2026 2.91 0.30 Price PTC 12/01/2026 2.97 0.30 Price PTC 12/01/2026 3.04 0.30 Price PTC 12/01/2026 3.10 0.30 Price PTC 12/01/2026 3.16 0.30 Price PTC 12/01/2026 3.73 0.30 $ Price 97.028) 3.27 0.30 Price PTC 12/01/2026 3.66 0.30 Price PTC 12/01/2026 3.69 0.30 Price PTC 12/01/2026 3.70 0.30 FITCH: CUSIP 185328JW2 185328JX0 185328JY8 185328JZ5 185328KA8 185328KB6 185328KC4 185328KD2 119.232) 185328KE0 118.386) 185328KF7 117.639) 185328KG5 117.083) 185328KH3 116.438) 185328KJ9 115.889) 185328KK6 115.342) 185328KL4 185328KM2 114.349) 185328KN0 102.764) 185328KP5 102.516) 185328KQ3 Master Message # Deal Type Neg (Approx. $ Price PTC 12/01/2026 102.434) 12/01/2039 9,265M 4.00% 3.71 0.30 185328KR1 (Approx. $ Price PTC 12/01/2026 102.351) CALL FEATURES: Optional call in 12/01/2026 @ 100.00 Blue Sky Survey Filings required: Cleared -AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, GU, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, PR, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY Not applied for -OT, VI, BE, AS, UM, MP PRIORITY OF ORDERS AS FOLLOWS: 1. Florida Retail 2. National Retail 3. Group Net* 4. Member *Except if an investor is affiliated with a syndicate member in which case the economics will be reallocated among the other managers. Please contact the Senior Manager. PRIORITY POLICY: The Senior Manager requests the identification of all priority orders at the time the orders are entered. DEFINITION OF RETAIL: RETAIL ORDERS ARE DEFINED AS ORDERS FOR FLORIDA OR NATIONAL INDIVIDUAL INVESTORS AND BANK TRUST DEPARTMENTS ACTING ON BEHALF OF INDIVIDUAL INVESTORS, WITH A MAXIMUM OF $250,000 PER ORDER. RETAIL ORDERS DO NOT INCLUDE PROFESSIONAL RETAIL, INVESTMENT ADVISORS, MONEY MANAGERS, OR ANY OTHER INSTITUTIONS NOT LISTED ABOVE. ALL RETAIL ORDERS MUST INCLUDE ZIP CODES. THE CITY OF CLEARWATER RESERVES THE RIGHT TO REQUEST COPIES OF ANY OR ALL CONFIRMATIONS OF THE SALE AND MAY RECOVER TAKEDOWN AMOUNTS SHOULD NON BONA FIDE ORDERS BE DISCOVERED. The Award is expected on Friday, January 27, 2017 at 9:00AM Eastern . Delivery is firm for Tuesday, February 28, 2017. This issue is book entry only. This issue is clearing through DTC. Award: Award Time: Delivery: 01/27/2017 9:00AM Eastern 02/28/2017 (Firm) ✓ Initial trade: 01/27/2017 ■ Date of Execution: 01/27/2017 Time of Execution: 11:15AM Eastern r ✓ Bank of America Merrill Lynch II RBC Capital Markets Wells Fargo Securities (trade name for Wells Fargo . Bank N.A. Municipal Products Group) ■ By: Bank of America Merrill Lynch New York, NY II II ✓ ✓ ✓ 1 ✓ ✓ ■ ■ ■ ■ ■ 1 ■ 1 ■ ■ ■ ■ ■ ■ ■ ■ a • a r ■ ■ ■ ■ Section 5 Final Numbers I a • Bank of America ■ Merrill Lynch ■ r • BankofAmerica Merrill Lynch r TABLE OF CONTENTS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Report Page 11 Sources and Uses of Funds 1 111 Bond Summary Statistics 2 Summary of Refunding Results 3 11 Bond Pricing 4 Savings 5 11/ Bond Debt Service 6 1 Summary of Bonds Refunded 7 Aggregate Debt Service 8 1 Escrow Requirements 9 1 Escrow Descriptions 10 Escrow Statistics 11 111 Escrow Sufficiency 12 Escrow Cash Flow 13 Escrow Cost Detail 16 1 Form 8038 Statistics 17 Proof of Arbitrage Yield 19 Cost of Issuance 21 1 Underwriter's Discount 22 111 Disclaimer 23 1 r ■ 1 ✓ ■ ▪ Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch 1 Bankof America Merrill Lynch SOURCES AND USES OF FUNDS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Dated Date 02/28/2017 Delivery Date 02/28/2017 Sources: Bond Proceeds: Par Amount Net Premium Other Sources of Funds: Debt Service Fund Debt Service Reserve Fund 69,270,000.00 4,904,164.65 74,174,164.65 878,554.69 515,693.26 1,394,247.95 75,568,412.60 Uses: Refunding Escrow Deposits: Cash Deposit SLGS Purchases Delivery Date Expenses: Cost of Issuance Underwriter's Discount 0.21 75,014,549.00 75,014,549.21 310,761.57 243,101.82 553,863.39 75,568,412.60 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 1 r a Bank of America Merrill Lynch ■ BOND SUMMARY STATISTICS 1 CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 . Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) II Dated Date 02/28/2017 Delivery Date 02/28/2017 . First Coupon 06/01/2017 Last Maturity 12/01/2039 ■ Arbitrage Yield 3.444430% True Interest Cost (TIC) 3.753298% a Net Interest Cost (NIC) 3.887658% All -In TIC 3.786644% Average Coupon 4.255002% Average Life (years) 18.318 Duration of Issue (years) 12.878 Par Amount 69,270,000.00 la Bond Proceeds 74,174,164.65 Total Interest 53,989,796.25 Net Interest 49,328,733.42 IIII Total Debt Service 123,259,796.25 Maximum Annual Debt Service 9,458,500.00 aAverage Annual Debt Service 5,416,029.13 Underwriter's Fees (per $1000) ■ Average Takedown 3.000000 Other Fee 0.509482 al Total Underwriter's Discount 3.509482 1 Bid Price 106.728833 1 Par Average Average PV of 1 bp Bond Component Value Price Coupon Life change al Bond Component 69,270,000.00 107.080 4.255% 18.318 61,581.40 al 69,270,000.00 18.318 61,581.40 All -In Arbitrage . TIC TIC Yield Par Value 69,270,000.00 69,270,000.00 69,270,000.00 a + Accrued Interest + Premium (Discount) 4,904,164.65 4,904,164.65 4,904,164.65 - Underwriter's Discount -243,101.82 -243,101.82 111 - Cost of Issuance Expense -310,761.57 - Other Amounts - a Target Value 73,931,062.83 73,620,301.26 74,174,164.65 . Target Date 02/28/2017 02/28/2017 02/28/2017 Yield 3.753298% 3.786644% 3.444430% 1 1 1 111 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 2 1 BankofAmerica Merrill Lynch SUMMARY OF REFUNDING RESULTS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Dated Date 02/28/2017 Delivery Date 02/28/2017 Arbitrage yield 3.444430% Escrow yield 1.434259% Value of Negative Arbitrage 3,751,720.84 Bond Par Amount 69,270,000.00 True Interest Cost 3.753298% Net Interest Cost 3.887658% All -In TIC 3.786644% Average Coupon 4.255002% Average Life 18.318 Weighted Average Maturity 18.125 Par amount of refunded bonds 67,295,000.00 Average coupon of refunded bonds 5.238235% Average life of refunded bonds 18.899 Remaining weighted average maturity of refunded bonds 18.888 PV of prior debt to 02/28/2017 @ 3.444430% 84,623,402.64 Net PV Savings 6,335,204.20 Percentage savings of refunded bonds 9.414079% Percentage savings of refunding bonds 9.145668% Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 3 1 1 s 1 1 1 1 1 1 1 1 11 a 1 11 1 is 1 •1 1 1 1 1 1 1 1 1 • 1 1 a Bank of America -a' Merrill Lynch I BOND PRICING CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 • Advance Refunding of Series 2009A Bonds • (FINAL VERIFIED NUMBERS) Maturity Yield to Call Call Premium 111 Bond Component Date CUSIP Amount Rate Yield Price Maturity Date Price (-Discount) Takedown Bond Component: a 12/01/2020 1853281W2 670,000 5.000% 1.630% 112.234 - _ - 81,967.80 3.000 12/01/2021 1853281X0 700,000 5.000% 1.860% 114.232 99,624.00 3.000 12/01/2022 1853281Y8 730,000 5.000% 2.030% 116.060 - - - 117,238.00 3.000 12/01/2023 185328125 770,000 5.000% 2.240% 117.217 - - - 132,570.90 3.000 ■ 12/01/2024 1853281(A8 805,000 5.000% 2.390% 118.379 - - - 147,950.95 3.000 12/01/2025 1853281(86850.000 5.000% 2.540% 119.204 - - - 163,234.00 3.000 12/01/2026 185328KC4 885,000 5.000% 2.630% 120.277 - - - 179,451.45 3.000 a 12/01/2027 185328KD2 930,000 5.000% 2.740% 119.232 C 2.905% 12/01/2026 100.000 178,857.60 3.000 12/01/2028 185328KE0 975,000 5.000% 2.830% 118.386 C 3.120% 12/01/2026 100.000 179,263.50 3.000 12/01/2029 185328KF7 1,020,000 5.000% 2.910% 117.639 C 3.295% 12/01/2026 100.000 179,917.80 3.000 12/01/2030 185328KG5 1,070,000 5.000% 2.970% 117.083 C 3.431% 12/01/2026 100.000 182,788.10 3.000 III 12/01/2031 185328KH3 1,125,000 5.000% 3.040% 116.438 C 3.558% 12/01/2026 100.000 184,927.50 3.000 12/01/2032 18532809 1,180,000 5.000% 3.100% 115.889 C 3.663% 12/01/2026 100.000 187,490.20 3.000 12/01/2033 1853280(6 7,220,000 5.000% 3.160% 115.342 C 3,757% 12/01/2026 100.000 1,107,692.40 3.000 I 12/01/2034 185328KL4 7,530,000 3.500% 3.730% 97.028 - -223,791.60 3.000 12/01/2035 185328KM2 7,860,000 5.000% 3.270% 114.349 C 3.913% 12/01/2026 100.000 1,127,831.40 3.000 12/01/2036 185328KN0 8,225,000 4.000% 3.660% 102.764 C 3.799% 12/01/2026 100.000 227,339.00 3.000 12/01/2037 185328KP5 8,555,000 4.000% 3.690% 102.516 C 3.823% 12/01/2026 100.000 215,243.80 3.000 I 12/01/2038 185328KQ3 8,905,000 4.000% 3.700% 102.434 C 3.834% 12/01/2026 100.000 216,747.70 3.000 12/01/2039 1853281(91 9,265,000 4.000% 3.710% 102.351 C 3.844% 12/01/2026 100.000 217,820.15 3.000 ill69,270,000 4,904,164.65 R Dated Date 02/28/2017 Delivery Date 02/28/2017 First Coupon 06/01/2017 aPar Amount 69,270,000.00 Premium 4,904,164.65 111 Production 74,174,164.65 107.079782% Underwriter's Discount -243,101.82 -0.350948% Purchase Price 73,931,062.83 106.728833% IRAccrued Interest Net Proceeds 73,931,062.83 a a U s a a S a ■ a a ■ ▪ Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch a Page 4 Bank of America Merrill Lynch Date SAVINGS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Present Value Prior Prior Prior Refunding to 02/28/2017 Debt Service Receipts Net Cash Flow Debt Service Savings @ 3.4444296% 09/30/2017 1,757,109.38 878,554.69 878,554.69 775,271.25 103,283.44 94,659.41 09/30/2018 3,514,218.76 - 3,514,218.76 3,001,050.00 513,168.76 495,816.33 09/30/2019 3,514,218.76 - 3,514,218.76 3,001,050.00 513,168.76 479,169.55 09/30/2020 3,514,218.76 - 3,514,218.76 3,001,050.00 513,168.76 463,081.68 09/30/2021 3,943,218.76 - 3,943,218.76 3,654,300.00 288,918.76 250,210.45 09/30/2022 3,937,265.63 - 3,937,265.63 3,650,050.00 287,215.63 240,253.47 09/30/2023 3,931,737.50 - 3,931,737.50 3,644,300.00 287,437.50 232,262.60 09/30/2024 3,934,715.63 3,934,715.63 3,646,800.00 287,915.63 224,739.20 09/30/2025 3,930,071.88 3,930,071.88 3,642,425.00 287,646.88 216,897.51 09/30/2026 3,932,909.38 - 3,932,909.38 3,646,050.00 286,859.38 208,939.92 09/30/2027 3,924,465.63 - 3,924,465.63 3,637,675.00 286,790.63 201,782.83 09/30/2028 3,924,740.63 3,924,740.63 3,637,300.00 287,440.63 195,364.38 09/30/2029 3,923,478.13 3,923,478.13 3,634,675.00 288,803.13 189,622.29 09/30/2030 3,915,806.25 - 3,915,806.25 3,629,800.00 286,006.25 181,349.94 09/30/2031 3,916,596.88 - 3,916,596.88 3,627,550.00 289,046.88 177,064.54 09/30/2032 3,915,593.76 - 3,915,593.76 3,627,675.00 287,918.76 170,339.23 09/30/2033 3,912,796.88 - 3,912,796.88 3,625,050.00 287,746.88 164,419.48 09/30/2034 10,203,006.25 - 10,203,006.25 9,455,050.00 747,956.25 418,652.52 09/30/2035 10,201,881.25 - 10,201,881.25 9,452,775.00 749,106.25 405,859.67 09/30/2036 10,204,625.00 - 10,204,625.00 9,454,500.00 750,125.00 392,904.49 09/30/2037 10,205,056.25 10,205,056.25 9,458,500.00 746,556.25 378,399.80 09/30/2038 10,202,125.00 - 10,202,125.00 9,452,900.00 749,225.00 367,540.66 09/30/2039 10,204,518.75 10,204,518.75 9,453,700.00 750,818.75 356,518.98 09/30/2040 10,200,925.00 10,200,925.00 9,450,300.00 750,625.00 345,048.53 134,765,300.10 878,554.69 133,886,745.41 123,259,796.25 10,626,949.16 6,850,897.46 PV of savings from cash flow Less: Prior funds on hand Savings Summary 6,850,897.46 -515,693.26 Net PV Savings 6,335,204.20 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 5 ■ • I a a r I I ■ a a I I s I S a a S S a S a a I I S a a Bank of America 4* Merrill Lynch f • BOND DEBT SERVICE CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Dated Date 02/28/2017 Delivery Date 02/28/2017 Period Ending Principal Coupon Interest Debt Service II 09/30/2017 775,271.25 775,271.25 a 09/30/2018 3,001,050.00 3,001,050.00 09/30/2019 3,001,050.00 3,001,050.00 09/30/2020 3,001,050.00 3,001,050.00 111 09/30/2021 670,000 5.000% 2,984,300.00 3,654,300.00 09/30/2022 700,000 5.000% 2,950,050.00 3,650,050.00 1. 09/30/2023 730,000 5.000% 2,914,300.00 3,644,300.00 09/30/2024 770,000 5.000% 2,876,800.00 3,646,800.00 11 09/30/2025 805,000 5.000% 2,837,425.00 3,642,425.00 09/30/2026 850,000 5.000% 2,796,050.00 3,646,050.00 09/30/2027 885,000 5.000% 2,752,675.00 3,637,675.00 111 09/30/2028 930,000 5.000% 2,707,300.00 3,637,300.00 09/30/2029 975,000 5.000% 2,659,675.00 3,634,675.00 111 09/30/2030 1,020,000 5.000% 2,609,800.00 3,629,800.00 09/30/2031 1,070,000 5.000% 2,557,550.00 3,627,550.00 r 09/30/2032 1,125,000 5.000% 2,502,675.00 3,627,675.00 09/30/2033 1,180,000 5.000% 2,445,050.00 3,625,050.00 M 09/30/2034 7,220,000 5.000% 2,235,050.00 9,455,050.00 09/30/2035 7,530,000 3.500% 1,922,775.00 9,452,775.00 09/30/2036 7,860,000 5.000% 1,594,500.00 9,454,500.00 111 09/30/2037 8,225,000 4.000% 1,233,500.00 9,458,500.00 09/30/2038 8,555,000 4.000% 897,900.00 9,452,900.00 M 09/30/2039 8,905,000 4.000% 548,700.00 9,453,700.00 09/30/2040 9,265,000 4.000% 185,300.00 9,450,300.00 1 69,270,000 53,989,796.25 123,259,796.25 I I a S U I I a I ▪ Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 6 a BankofAmerica' Merrill Lynch Bond SUMMARY OF BONDS REFUNDED CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Maturity Date CUSIP Interest Rate Par Call Amount Date Call Price Water and Sewer Revenue Bonds, Seri BOND 12/01/2020 12/01/2021 12/01/2022 12/01/2023 TERM32 12/01/2024 12/01/2025 12/01/2026 12/01/2027 12/01/2028 12/01/2029 12/01/2030 12/01/2031 12/01/2032 TERM39 12/01/2033 12/01/2034 12/01/2035 12/01/2036 12/01/2037 12/01/2038 12/01/2039 es 2009A, 2009A: 185328HD6 185328HE4 185328HF1 185328HG9 185328HJ3 185328HJ3 185328HJ3 185328HJ3 185328HJ3 185328HJ3 185328HJ3 185328HJ3 185328HJ3 185328HH7 185328HH7 185328HH7 185328HH7 185328HH7 185328HH7 185328HH7 5.000% 440,000.00 12/01/2019 100.000 4.375% 455,000.00 12/01/2019 100.000 4.500% 470,000.00 12/01/2019 100.000 4.625% 495,000.00 12/01/2019 100.000 5.125% 515,000.00 12/01/2019 100.000 5.125% 545,000.00 12/01/2019 100.000 5.125% 565,000.00 12/01/2019 100.000 5.125% 595,000.00 12/01/2019 100.000 5.125% 625,000.00 12/01/2019 100.000 5.125% 650,000.00 12/01/2019 100.000 5.125% 685,000.00 12/01/2019 100.000 5.125% 720,000.00 12/01/2019 100.000 5.125% 755,000.00 12/01/2019 100.000 5.250% 7,255,000.00 12/01/2019 100.000 5.250% 7,645,000.00 12/01/2019 100.000 5.250% 8,060,000.00 12/01/2019 100.000 5.250% 8,495, 000.00 12/01/2019 100.000 5.250% 8,950,000.00 12/01/2019 100.000 5.250% 9,435,000.00 12/01/2019 100.000 5.250% 9,940,000.00 12/01/2019 100.000 67,295,000.00 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 7 • I I a a a I I I ✓ I A i • p S a a I a a B S i a w ■ a I ■ a a I • Bankof America Merrill Lynch I AGGREGATE DEBT SERVICE CITY OF CLEARWATER, FLORIDA 1111 Water and Sewer Revenue Refunding Bonds, Series 2017 ■ Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) 111 Advance Period Refunding of Unrefunded Aggregate Ending Series 2009A Series 2003 Series 2009B Series 2011 Series 2014 Bonds Debt Service • 09/30/2017 775,271.25 10,200 251,125 938,815.63 432,480.00 10,500 2,418,391.88 09/30/2018 3,001,050.00 265,400 5,274,875 3,520,506.26 1,017,495.50 21,000 13,100,326.76 II 09/30/2019 3,001,050.00 265,200 5,278,750 3,480,131.26 1,017,487.00 21,000 13,063,618.26 09/30/2020 3,001,050.00 3,481,381.26 2,404,900.50 430,500 9,317,831.76 I09/30/2021 3,654,300.00 3,487,881.26 2,389,259.00 9,531,440.26 09/30/2022 3,650,050.00 3,489,381.26 2,392,186.50 9,531,617.76 09/30/2023 3,644,300.00 3,495,631.26 2,393,365.00 9,533,296.26 II 09/30/2024 3,646,800.00 3,501,256.26 2,387,874.00 9,535,930.26 09/30/2025 3,642,425.00 - 3,506,006.26 2,385,713.50 9,534,144.76 • 09/30/2026 3,646,050.00 - 3,526,981.26 2,381,804.00 9,554,835.26 09/30/2027 3,637,675.00 - 3,525,731.26 2,381,066.00 - 9,544,472.26 1111 09/30/2028 3,637,300.00 3,532,693.76 2,373,499.50 9,543,493.26 09/30/2029 3,634,675.00 - 3,534,506.26 2,369,104.50 9,538,285.76 09/30/2030 3,629,800.00 - - 3,551,331.26 2,367,722.00 - 9,548,853.26 1111 09/30/2031 3,627,550.00 - 3,558,953.13 2,359,352.00 9,545,855.13 09/30/2032 3,627,675.00 - - 3,573,100.00 2,353,994.50 9,554,769.50 • 09/30/2033 3,625,050.00 - - 3,588,975.00 2,341,649.50 9,555,674.50 09/30/2034 9,455,050.00 - - 9,455,050.00 111 09/30/2035 9,452,775.00 - - 9,452,775.00 09/30/2036 9,454,500.00 - - - 9,454,500.00 III09/30/2037 9,458,500.00 - - 9,458,500.00 09/30/2038 9,452,900.00 9,452,900.00 09/30/2039 9,453,700.00 - - - 9,453,700.00 I 09/30/2040 9,450,300.00 - - 9,450,300.00 111 123,259,796.25 540,800 10,804,750 57,293,262.64 35,748,953.00 483,000 228,130,561.89 I I U a S a I a I I ▪ Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 8 S Bank of America Merrill Lynch ESCROW REQUIREMENTS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Period Principal Ending Interest Redeemed Total 06/01/2017 1,757,109.38 1,757,109.38 12/01/2017 1,757,109.38 1,757,109.38 06/01/2018 1,757,109.38 1,757,109.38 12/01/2018 1,757,109.38 1,757,109.38 06/01/2019 1,757,109.38 1,757,109.38 12/01/2019 1,757,109.38 67,295,000.00 69,052,109.38 10,542,656.28 67,295,000.00 77,837,656.28 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 9 a r a a a a I I S r I U a a a a a U I S a U U a a a a I N a a a BankofAmerica' Merrill Lynch a 1111 ESCROW DESCRIPTIONS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Type of Type of Maturity First Int Par Max Total Security SLGS Date Pmt Date Amount Rate Rate Cost Feb 28, 2017: I SLGS Certificate 06/01/2017 06/01/2017 1,490,641 0.490% 0.490% 1,490,641.00 SLGS Certificate 12/01/2017 12/01/2017 1,232,750 0.700% 0.700% 1,232,750.00 NI SLGS Note 06/01/2018 06/01/2017 1,239,275 0.910% 0.910% 1,239,275.00 SLGS Note 12/01/2018 06/01/2017 1,244,913 1.120% 1.120% 1,244,913.00 S SLGS Note 06/01/2019 06/01/2017 1,251,885 1.310% 1.310% 1,251,885.00 SLGS Note 12/01/2019 06/01/2017 68,555,085 1.450% 1.450% 68,555,085.00 1 75,014,549 75,014,549.00 I SLGS Summary a SLGS Rates File 26JAN17 Total Certificates of Indebtedness 2,723,391.00 Total Notes 72,291,158.00 111 Total original SLGS 75,014,549.00 a 011 a I a r a I U a Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 10 I Bank of America Merrill Lynch Escrow ESCROW STATISTICS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Modified Yield to Yield to Perfect Value of Total Duration PV of 1 bp Receipt Disbursement Escrow Negative Cost of Escrow Cost (years) change Date Date Cost Arbitrage Dead Time DSF 878,554.69 0.258 22.64 0.483570% 0.483570% 871,925.09 6,629.59 DSRF 515,693.26 2.594 133.74 1.434257% 1.434257% 489,642.21 26,051.05 BP 73,620,301.26 2.594 19,093.01 1.434259% 1.434259% 69,901,261.02 3,719,040.20 0.01 0.04 75,014,549.21 19,249.39 71,262,828.32 3,751,720.84 0.05 Delivery date 02/28/2017 Arbitrage yield 3.444430% Composite Modified Duration 2.567 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 11 a r ✓ a a a a a a a a a I B a I a a a a a S a a a a a a N a a I Bank of AmericaVI Merrill Lynch r ESCROW SUFFICIENCY CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Escrow Net Escrow Excess Excess Date Requirement Receipts Receipts Balance 02/28/2017 - 0.21 0.21 0.21 I, 06/01/2017 1,757,109.38 1,757,109.76 0.38 0.59 12/01/2017 1,757,109.38 1,757,109.56 0.18 0.77 P 06/01/2018 1,757,109.38 1,757,109.43 0.05 0.82 12/01/2018 1,757,109.38 1,757,108.73 -0.65 0.17 . 06/01/2019 1,757,109.38 1,757,109.22 -0.16 0.01 12/01/2019 69,052,109.38 69,052,109.37 -0.01 a 77,837,656.28 77,837,656.28 0.00 I a S I P S I a I I a a S P S a ▪ Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 12 a Bank of America Merrill Lynch ESCROW CASH FLOW CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Date Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Prior Bonds (PRIOR) - DSF SLGS 878,554.48 Present Value 0.490000% Net Escrow to 02/28/2017 Jun 1, 2017 Receipts @ 0.4835702% 06/01/2017 879,651.35 879,651.35 878,554.48 879,651.35 879,651.35 878,554.48 Escrow Cost Summary Purchase date 02/28/2017 Purchase cost of securities 878,554.48 Target for yield calculation 878,554.48 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 13 I a S a a I a I 1 I S I I a I a a a I V B a I a a ■ i S S S I a I Bank of America Merrill Lynch Date ESCROW CASH FLOW CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Prior Bonds (PRIOR) - DSRF SLGS SLGS SLGS SLGS SLGS SLGS 4,257.71 8,575.07 8,620.46 8,659.67 8,708.17 476,872.18 0.490000% 0.700000% 0.910000% 1.120000% 1.310000% 1.450000% Jun 1, 2017 Dec 1, 2017 Jun 1, 2018 Dec 1, 2018 Jun 1, 2019 Dec 1, 2019 Present Value Net Escrow to 02/28/2017 Receipts @ 1.4342566% 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 4,263.03 8,620.46 20.04 39.22 8,659.68 24.78 48.49 48.49 8,708.16 29.15 57.04 57.04 57.04 8,765.21 1,766.65 3,457.32 3,457.32 3,457.32 3,457.32 480,329.50 6,103.65 12,222.53 12,222.53 12,222.52 12,222.53 480,329.50 6,081.16 12,090.78 12,004.69 11,919.21 11,834.35 461,763.07 4,263.03 8,620.46 8,718.94 8,829.92 8,965.48 495,925.43 535,323.26 515,693.26 .l Escrow Cost Summary S a a 5 a I a S a I ,! a I S Purchase date 02/28/2017 Purchase cost of securities 515,693.26 Target for yield calculation 515,693.26 r a Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 14 S Bank of America Merrill Lynch Date ESCROW CASH FLOW CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Prior Bonds (PRIOR) - BP SLGS SLGS SLGS SLGS SLGS SLGS 607,828.81 1,224,174.93 1,230,654.54 1,236,253.33 1,243,176.83 68,078,212.82 Present Value 0.490000% 0.700000% 0.910000% 1.120000% 1.310000% 1.450000% Net Escrow to 02/28/2017 Jun 1, 2017 Dec 1, 2017 Jun 1, 2018 Dec 1, 2018 Jun 1, 2019 Dec 1, 2019 Receipts @ 1.4342586% 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 608,587.68 1,230,654.67 2,861.27 5,599.48 1,236,254.02 3,537.59 6,923.02 6,923.02 1,243,176.35 4,160.89 8,142.81 8,142.81 8,142.81 1,251,319.64 252,207.34 493,567.04 493,567.04 493,567.04 493,567.04 68,571,779.86 871,354.77 1,744,887.02 1,744,886.89 1,744,886.20 1,744,886.68 68,571,779.86 868,143.71 1,726,078.65 1,713,788.45 1,701,585.20 1,689,469.99 65,921,235.27 608,587.68 1,230,654.67 1,244,714.77 1,260,559.98 1,279,908.96 70,798,255.36 76,422,681.42 73,620,301.26 Escrow Cost Summary Purchase date 02/28/2017 Purchase cost of securities 73,620,301.26 Target for yield calculation 73,620,301.26 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 15 a a a 1 I a I I I r I I I 1 I I I I I I a a $ S a p a a S Bank of America Merrill Lynch m ESCROW COST DETAIL CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) a Type of Maturity Par Total Security Date Amount Rate Cost DSF: SLGS 06/01/2017 878,554.48 0.490% 878,554.48 DSRF: SLGS 06/01/2017 4,257.71 0.490% 4,257.71 SLGS 12/01/2017 8,575.07 0.700% 8,575.07 SLGS 06/01/2018 8,620.46 0.910% 8,620.46 SLGS 12/01/2018 8,659.67 1.120% 8,659.67 4' SLGS 06/01/2019 8,708.17 1.310% 8,708.17 SLGS 12/01/2019 476,872.18 1.450% 476,872.18 515,693.26 515,693.26 BP: SLGS 06/01/2017 607,828.81 0.490% 607,828.81 SLGS 12/01/2017 1,224,174.93 0.700% 1,224,174.93 111 SLGS 06/01/2018 1,230,654.54 0.910% 1,230,654.54 SLGS 12/01/2018 1,236,253.33 1.120% 1,236,253.33 SLGS 06/01/2019 1,243,176.83 1.310% 1,243,176.83 SLGS 12/01/2019 68,078,212.82 1.450% 68,078,212.82 73,620,301.26 73,620,301.26 75,014,549.00 75,014,549.00 Purchase Cost of Cash Total Escrow Date Securities Deposit Escrow Cost Yield 111 DSF 02/28/2017 878,554.48 0.21 878,554.69 0.483570% DSRF 02/28/2017 515,693.26 515,693.26 1.434257% BP 02/28/2017 73,620,301.26 - 73,620,301.26 1.434259% 75,014,549.00 0.21 75,014,549.21 I E a I I Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 16 a Bank of America Merrill Lynch FORM 8038 STATISTICS CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Dated Date 02/28/2017 Delivery Date 02/28/2017 Redemption Bond Component Date Principal Coupon Price Issue Price at Maturity Bond Component: 12/01/2020 670,000.00 5.000% 112.234 751,967.80 670,000.00 12/01/2021 700,000.00 5.000% 114.232 799,624.00 700,000.00 12/01/2022 730,000.00 5.000% 116.060 847,238.00 730,000.00 12/01/2023 770,000.00 5.000% 117.217 902,570.90 770,000.00 12/01/2024 805,000.00 5.000% 118.379 952,950.95 805,000.00 12/01/2025 850,000.00 5.000% 119.204 1,013,234.00 850,000.00 12/01/2026 885,000.00 5.000% 120.277 1,064,451.45 885,000.00 12/01/2027 930,000.00 5.000% 119.232 1,108,857.60 930,000.00 12/01/2028 975,000.00 5.000% 118.386 1,154,263.50 975,000.00 12/01/2029 1,020,000.00 5.000% 117.639 1,199,917.80 1,020,000.00 12/01/2030 1,070,000.00 5.000% 117.083 1,252,788.10 1,070,000.00 12/01/2031 1,125,000.00 5.000% 116.438 1,309,927.50 1,125,000.00 12/01/2032 1,180,000.00 5.000% 115.889 1,367,490.20 1,180,000.00 12/01/2033 7,220,000.00 5.000% 115.342 8,327,692.40 7,220,000.00 12/01/2034 7,530,000.00 3.500% 97.028 7,306,208.40 7,530,000.00 12/01/2035 7,860,000.00 5.000% 114.349 8,987,831.40 7,860,000.00 12/01/2036 8,225,000.00 4.000% 102.764 8,452,339.00 8,225,000.00 12/01/2037 8,555,000.00 4.000% 102.516 8,770,243.80 8,555,000.00 12/01/2038 8,905,000.00 4.000% 102.434 9,121,747.70 8,905,000.00 12/01/2039 9,265,000.00 4.000% 102.351 9,482,820.15 9,265,000.00 69,270,000.00 74,174,164.65 69,270,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 12/01/2039 4.000% 9,482,820.15 9,265,000.00 Entire Issue - 74,174,164.65 69,270,000.00 18.1255 3.4444% Proceeds used for accrued interest Proceeds used for bond issuance costs (including underwriters' discount) Proceeds used for credit enhancement Proceeds allocated to reasonably required reserve or replacement fund Proceeds used to currently refund prior issues Proceeds used to advance refund prior issues Remaining weighted average maturity of the bonds to be currently refunded Remaining weighted average maturity of the bonds to be advance refunded 0.00 553,863.39 0.00 0.00 0.00 73,620,301.26 0.0000 18.8883 I a a a z a a a a p I a a I a a a a 2 a I I a a Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 17 III Bank of America -VP Merrill Lynch 11 FORM 8038 STATISTICS CITY OF CLEARWATER, FLORIDA • Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) • Refunded Bonds Bond • Component Date Principal Coupon Price Issue Price IWater and Sewer Revenue Bonds, Series 2009A: BOND 12/01/2020 440,000.00 5.000% 105.956 466,206.40 BOND 12/01/2021 455,000.00 4.375% 98.250 447,037.50 BOND 12/01/2022 470,000.00 4.500% 98.507 462,982.90 BOND 12/01/2023 495,000.00 4.625% 98.390 487,030.50 ID TERM32 12/01/2024 515,000.00 5.125% 97.925 504,313.75 TERM32 12/01/2025 545,000.00 5.125% 97.925 533,691.25 le TERM32 12/01/2026 565,000.00 5.125% 97.925 553,276.25 TERM32 12/01/2027 595,000.00 5.125% 97.925 582,653.75 I TERM32 12/01/2028 625,000.00 5.125% 97.925 612,031.25 TERM32 12/01/2029 650,000.00 5.125% 97.925 636,512.50 TERM32 12/01/2030 685,000.00 5.125% 97.925 670,786.25 111 TERM32 12/01/2031 720,000.00 5.125% 97.925 705,060.00 TERM32 12/01/2032 755,000.00 5.125% 97.925 739,333.75 • TERM39 12/01/2033 7,255,000.00 5.250% 97.768 7,093,068.40 TERM39 12/01/2034 7,645,000.00 5.250% 97.768 7,474,363.60 !, TERM39 12/01/2035 8,060,000.00 5.250% 97.768 7,880,100.80 TERM39 12/01/2036 8,495,000.00 5.250% 97.768 8,305,391.60 I TERM39 12/01/2037 8,950,000.00 5.250% 97.768 8,750,236.00 TERM39 12/01/2038 9,435,000.00 5.250% 97.768 9,224,410.80 TERM39 12/01/2039 9,940,000.00 5.250% 97.768 9,718,139.20 • 67,295,000.00 65,846,626.45 It R Remaining Last Weighted Call Issue Average MI Date Date Maturity • Water and Sewer Revenue Bonds, Series 2009A 12/01/2019 05/27/2009 18.8883 All Refunded Issues 12/01/2019 18.8883 a a a •i a • Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 18 • Bank ofAmerica ' Merrill Lynch PROOF OF ARBITRAGE YIELD CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Present Value PV to 02/28/2017 Date Debt Service Factor @ 3.4444296039% 06/01/2017 775,271.25 0.991216447 768,461.61 12/01/2017 1,500,525.00 0.974434590 1,462,163.46 06/01/2018 1,500,525.00 0.957936860 1,437,408.21 12/01/2018 1,500,525.00 0.941718445 1,413,072.07 06/01/2019 1,500,525.00 0.925774618 1,389,147.96 12/01/2019 1,500,525.00 0.910100728 1,365,628.90 06/01/2020 1,500,525.00 0.894692207 1,342,508.02 12/01/2020 2,170,525.00 0.879544560 1,909,073.46 06/01/2021 1,483,775.00 0.864653372 1,282,951.06 12/01/2021 2,183,775.00 0.850014300 1,856,239.98 06/01/2022 1,466,275.00 0.835623075 1,225,253.22 12/01/2022 2,196,275.00 0.821475503 1,804,186.11 06/01/2023 1,448,025.00 0.807567456 1,169,377.87 12/01/2023 2,218,025.00 0.793894881 1,760,878.69 06/01/2024 1,428,775.00 0.780453790 1,115,092.86 12/01/2024 2,233,775.00 0.767240265 1,713,842.12 06/01/2025 1,408,650.00 0.754250452 1,062,474.90 12/01/2025 2,258,650.00 0.741480564 1,674,745.08 06/01/2026 1,387,400.00 0.728926877 1,011,313.15 12/01/2026 58,602,400.00 0.716585732 41,993,643.70 06/01/2027 131,775.00 0.704453529 92,829.36 12/01/2027 131,775.00 0.692526731 91,257.71 06/01/2028 131,775.00 0.680801861 89,712.67 12/01/2028 131,775.00 0.669275499 88,193.78 06/01/2029 131,775.00 0.657944285 86,700.61 12/01/2029 131,775.00 0.646804915 85,232.72 06/01/2030 131,775.00 0.635854141 83,789.68 12/01/2030 131,775.00 0.625088770 82,371.07 06/01/2031 131,775.00 0.614505662 80,976.48 12/01/2031 131,775.00 0.604101733 79,605.51 06/01/2032 131,775.00 0.593873948 78,257.74 12/01/2032 131,775.00 0.583819325 76,932.79 06/01/2033 131,775.00 0.573934933 75,630.28 12/01/2033 131,775.00 0.564217889 74,349.81 06/01/2034 131,775.00 0.554665360 73,091.03 12/01/2034 7,661,775.00 0.545274560 4,177,771.00 99,903,146.25 74,174,164.65 Proceeds Summary Delivery date 02/28/2017 Par Value 69,270,000.00 Premium (Discount) 4,904,164.65 Target for yield calculation 74,174,164.65 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 19 a a a a a a r S a a S I a f I a a I S a • i a I a p at I Bank of America Merrill Lynch a PROOF OF ARBITRAGE YIELD CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) 111 Assumed Call/Computation Dates for Premium Bonds 11 Bond Maturity Call Call Yield To Component Date Rate Yield Date Price Call/Maturity • BOND 12/01/2027 5.000% 2.740% 12/01/2026 100.000 2.7409656% BOND 12/01/2028 5.000% 2.830% 12/01/2026 100.000 2.8309451% Ok BOND 12/01/2029 5.000% 2.910% 12/01/2026 100.000 2.9110337% BOND 12/01/2030 5.000% 2.970% 12/01/2026 100.000 2.9710389% BOND 12/01/2031 5.000% 3.040% 12/01/2026 100.000 3.0410761% • BOND 12/01/2032 5.000% 3.100% 12/01/2026 100.000 3.1010546% BOND 12/01/2033 5.000% 3.160% 12/01/2026 100.000 3.1611527% • BOND 12/01/2035 5.000% 3.270% 12/01/2026 100.000 3.2711264% BOND 12/01/2036 4.000% 3.660% 12/01/2026 100.000 3.6611450% • BOND 12/01/2037 4.000% 3.690% 12/01/2026 100.000 3.6911623% BOND 12/01/2038 4.000% 3.700% 12/01/2026 100.000 3.7011061% BOND 12/01/2039 4.000% 3.710% 12/01/2026 100.000 3.7111808% 11 IIIReiected Call/Computation Dates for Premium Bonds • Bond Maturity Call Call Yield To Increase II Component Date Rate Yield Date Price Call/Maturity to Yield BOND 12/01/2027 5.000% 2.740% - 2.9060177% 0.1650521% 11 BOND 12/01/2028 5.000% 2.830% 3.1204364% 0.2894914% BOND 12/01/2029 5.000% 2.910% 3.2957652% 0.3847315% • BOND 12/01/2030 5.000% 2.970% - 3.4322519% 0.4612131% BOND 12/01/2031 5.000% 3.040% - 3.5590035% 0.5179274% • BOND 12/01/2032 5.000% 3.100% 3.6642535% 0.5631989% BOND 12/01/2033 5.000% 3.160% 3.7583160% 0.5971633% • BOND 12/01/2035 5.000% 3.270% 3.9135500% 0.6424236% BOND 12/01/2036 4.000% 3.660% 3.8001526% 0.1390076% BOND 12/01/2037 4.000% 3.690% - - 3.8236293% 0.1324670% • BOND 12/01/2038 4.000% 3.700% - 3.8343666% 0.1332605% BOND 12/01/2039 4.000% 3.710% - - 3.8443822% 0.1332014% a a a S V I' • Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 20 Bank of America 4* Merrill Lynch Cost of Issuance COST OF ISSUANCE CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) $11000 Amount Rounding 0.01874 1,298.07 Bond Counsel (Bryant Miller Olive) Fee 1.22482 84,843.00 Bond Counsel (Bryant Miller Olive) Expenses 0.03609 2,500.00 Disclosure Counsel (Nabors, Giblin & Nickerson) 0.92887 64,343.00 Financial Advisor (Stifel) Fee 0.89436 61,952.50 Financial Advisor (Stifel) Expenses 0.01444 1,000.00 Paying Agent (U.S. Bank) Fee 0.03609 2,500.00 Paying Agent (U.S. Bank) Expenses 0.00108 75.00 Escrow Agent (U.S. Bank) 0.01083 750.00 Verification Agent (Causey Demgen & Moore) 0.03609 2,500.00 Moody's 0.59189 41,000.00 S&P 0.50527 35,000.00 DAC Initial Set-up and Annual Filing Fee 0.07218 5,000.00 Printer 0.04331 3,000.00 Miscellaneous 0.07218 5,000.00 4.48624 310,761.57 Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 21 a a I p to a t a a a r a ■ S s S S U a M BankofAmerica Merrill Lynch 1 UNDERWRITER'S DISCOUNT CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 . Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) Underwriter's Discount $/1000 Amount • Average Takedown 3.00000 207,810.00 i -Deal Bookrunning 0.06728 4,660.81 III i -Deal Wires 0.00212 146.98 i -Deal EOE & Gameday Access 0.03266 2,262.53 • CUSIP Charge & Disclosure Fee 0.01330 921.50 DTC Service Fees 0.01155 800.00 S Underwriter's Counsel 0.36091 25,000.00 Miscellaneous 0.02165 1,500.00 i 3.50948 243,101.82 • • • 1 6 5 ■ a a 1 1 1111 • Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 22 BankofAmericaVi"-' Merrill Lynch DISCLAIMER CITY OF CLEARWATER, FLORIDA Water and Sewer Revenue Refunding Bonds, Series 2017 Advance Refunding of Series 2009A Bonds (FINAL VERIFIED NUMBERS) BofAML IS NOT YOUR MUNICIPAL ADVISOR OR FIDUCIARY. Bank of America Merrill Lynch ('BofAML') is providing the information contained herein for discussion purposes only either as an underwriter or in anticipation of being engaged to serve as an underwriter. By providing the information contained herein pursuant to the underwriter exclusion provided under SEC Rule 15Ba1-1(d)(2)(i), BofAML is not acting as your 'municipal advisor' within the meaning of Section 15B of the Securities Exchange Act of 1934, as amended (the 'Act'), and does not owe a fiduciary duty to you pursuant to the Act with respect to the information and material contained in this communication. BofAML is either serving as an underwriter or is seeking to serve as an underwriter on a future transaction and not as a financial advisor or municipal advisor. The primary role of BofAML, as an underwriter, is to purchase securities with a view to distribution in an arm's-length commercial transaction between you and BofAML and BofAML has financial and other interests that differ from yours. BofAML is acting for its own interests. You should discuss any information and material contained in this communication with any and all of your own internal or external municipal and/or financial, legal, accounting, tax and other advisors and experts, as applicable, to the extent you deem appropriate before acting on this information or material. This material has been prepared by the Public Finance Group and is not a research report and is not a product of the fixed income research department of BofAML. This material is for information purposes only, is intended solely for your use, and may not be reproduced, disseminated, quoted or referred to in whole or in part, without our written consent. This material does not constitute an offer or solicitation to sell or purchase any securities and is not a commitment by BofAML or any of its affiliates to provide or arrange any financing for any transaction or to purchase any security in connection therewith. The calculations contained herein are based upon assumptions and information that either you or your advisors provided to BofAML or which BofAML deems in its sole discretion to be appropriate. BofAML makes no representation or warranty as to the accuracy or completeness of this material or these calculations and any and all liability to you or any third parties relating to this material or the calculations is expressly disclaimed. The material and calculations made available to you may not be similar to the information generated by BofAML's or its affiliates proprietary models or valuations that are used for its own purposes or to the models or valuations available from other sources including from other dealers. BofAML assumes no obligation to update or otherwise revise these materials. Values generated by the data or calculations may not reflect actual prices or values that can be obtained in the market at that time and the calculations should not be relied upon for any tax, accounting, legal or other purpose. Jan 30, 2017 10:05 am Prepared by Bank of America Merrill Lynch Page 23