Council action is requested to approve Morgan Stanley as Senior Underwriter for Independence Power & Light’s (“IPL”) 2022 refunding transaction and to authorize the City Manager to enter into an Underwriter Agreement.

Assign Morgan Stanley as underwriter and authorize City Manager to enter into an Underwriter Agreement.

Staff along with Gilmore Bell as our Bond Counsel and PFM serving as our Municipal Advisor has created a refunding option for the outstanding Series 2012A and 2012F Power and Light bonds. The City proposes to engaged Morgan Stanley as the Underwriter for the debt refunding to further refine the plan and to assist with selling the debt. 

The RFP was submitted to 171 different finance institutions soliciting firms to act as Senior or Co-Managing underwriters.

The City received 6 responses; American Veterans Group, Robert W Baird & Co Incorporated, Drexel Hamilton, Morgan Stanley, Piper Sandler and Valdes & Moreno submitted responses. Selection criteria outlined in the RFP were as follows:

1. Plan of finance (includes strategic issues/ideas about the execution of the transaction, structure ideas; and other
innovative ideas presented in the plan of finance),
2. Rating agency engagement thoughts,
3. Investor engagement thoughts, and
4. Takedown

Based on our analysis and the assistance of PFM it is our recommendation that the City Council approve the award of the RFP to Morgan Stanley.

Pledged revenues generated from electric operations are sufficient to pay related debt service. The latest estimates show that the refundings will generate $16 million in net present value savings.