1030-00001
· Dralvecen Fenn & Co., Inc · Closing
funds-flow-memorandum.xlsx
DOCUMENT
M&A / Corporate
[sheet: Cover]
| Field | Value |
| Document Title | Funds Flow Memorandum — Sources and Uses of Funds |
| Transaction | Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt) |
| Aggregate Principal Amount | $220,000,000 |
| Issuer | Cascadia State Infrastructure Authority (CSIA) |
| Issuer Address | 1100 Capitol Way South, Suite 400, Olympia, WA 98501 |
| Bond Trustee / Paying Agent / Registrar / Escrow Agent | Pacific Northwest Trust Company, N.A. (PNTC) |
| Trustee Address | 1201 Third Avenue, Suite 1600, Seattle, WA 98101 |
| Senior Managing Underwriter | Meridian Capital Partners LLC |
| Co-Managing Underwriter | Dralvecen Fenn & Co., Inc. |
| Issuer's Counsel | Calderwood & Harkness LLP |
| C&H Matter Number | 1030-00001 |
| Closing Date | October 24, 2023 |
| Prepared By | Brett Callahan, Associate, Calderwood & Harkness LLP |
| Reviewed By | Michelle Tsao, Lead Associate, Calderwood & Harkness LLP |
| Date Prepared | October 20, 2023 |
| CUSIP Base | 148392 |
| CSIA EIN | 91-2058374 |
| Governing Law | State of Washington |
CONFIDENTIAL — FOR CLOSING PARTICIPANTS ONLY
[sheet: Sources and Uses Summary]
Line Item
SOURCES OF FUNDS
| Par Amount of Series 2023A Bonds | $220,000,000.00 | Aggregate principal amount |
| Less: Original Issue discount (OID) (0.75%) | ($1,650,000.00) | $220,000,000 × 0.75%; Bonds priced at 99.25% of par |
| Less: Underwriters' discount (0.45%) | ($990,000.00) | $220,000,000 × 0.45% |
| Net Bond Proceeds | $217,360,000.00 | $220,000,000 − $1,650,000 − $990,000 |
| CSIA Equity Contribution (from existing capital reserves) | $17,400,000.00 | CSIA equity from capital reserves |
| TOTAL SOURCES | $234,760,000.00 | Net Bond Proceeds + CSIA Equity |
USES OF FUNDS
| Deposit to Project Fund (Bond Proceeds portion) | $215,490,000.00 | Net Bond Proceeds less COI and Capitalized Interest |
| Deposit to Project Fund (CSIA Equity portion) | $17,400,000.00 | CSIA equity contribution to construction |
| Costs of Issuance Fund | $1,870,000.00 | See COI Detail sheet; funded from bond proceeds |
| Capitalized Interest Fund | $4,510,000.00 | Interest capitalized through construction period; see note |
| Underwriters' discount (paid at settlement) | $990,000.00 | Retained by underwriters from gross proceeds; not wired separately |
| Original Issue discount | $1,650,000.00 | Reduction from par; not a cash use |
| TOTAL USES (Cash) | $234,760,000.00 | Project Fund + COI + Cap Interest + CSIA Equity (cash uses) |
RECONCILIATION
| Total Sources minus Total Uses (Cash) | $0.00 | Must equal zero |
| Total Project Cost | $237,400,000.00 | GMP ($193,500,000) + other project costs |
| Total Funded to Project (Bond + Equity) | $232,890,000.00 | $215,490,000 + $17,400,000 |
| Capitalized Interest Fund | $4,510,000.00 | Included in COI allocation bucket |
| Grand Total Deployment of All Funds | $237,400,000.00 | Project Fund deposits + Capitalized Interest |
[sheet: Underwriters' discount Detail]
| Underwriter | Role | Allocation % | Discount Amount ($) | Contact | Address |
| Meridian Capital Partners LLC | Senior Managing Underwriter | 70% | $693,000.00 | Jonathan D. Kessler, Managing Director, Public Finance | 600 Third Avenue, 28th Floor, New York, NY 10016 |
| Dralvecen Fenn & Co., Inc. | Co-Managing Underwriter | 30% | $297,000.00 | Sarah E. Mulvaney, Director, Municipal Finance | 200 Park Avenue, Suite 3100, New York, NY 10166 |
| TOTAL | 100% | $990,000.00 |
[sheet: Costs of Issuance Detail]
| Category | Payee | Estimated Amount ($) | Notes |
| Issuer's Counsel — Calderwood & Harkness LLP | Calderwood & Harkness LLP | $485,000.00 | Fixed fee per engagement letter dated April 18, 2023; 50% at signing ($242,500), 50% at closing ($242,500) |
| Issuer's Counsel — Reimbursable Expenses | Calderwood & Harkness LLP | $35,000.00 | Capped at $35,000 per engagement letter |
| Co-Bond Counsel — Pryor Crestfield LLP | Pryor Crestfield LLP | $175,000.00 | Approving legal opinion and tax opinion; WA local bond counsel |
| Underwriters' Counsel — Alderman & Locke LLP | Alderman & Locke LLP | $150,000.00 | Counsel to Meridian Capital Partners and Dralvecen Fenn |
| Bond Trustee / Paying Agent / Registrar — PNTC (initial fee) | Pacific Northwest Trust Company, N.A. | $45,000.00 | Acceptance fee and first-year trustee/paying agent fee |
| Escrow Agent Fee — PNTC | Pacific Northwest Trust Company, N.A. | $15,000.00 | Escrow agent fee for construction-fund disbursements |
| Rating Agency Fee — Lakeshore Ratings Group, Inc. | Lakeshore Ratings Group, Inc. | $185,000.00 | Rating: AA (stable outlook); underlying and insured |
| Rating Agency Fee — Pinnacle Credit Analytics, Inc. | Pinnacle Credit Analytics, Inc. | $175,000.00 | Rating: AA− (stable outlook); underlying and insured |
| Municipal Advisor — Clearfield Municipal Advisors LLC | Clearfield Municipal Advisors LLC | $125,000.00 | SEC-registered municipal advisor to CSIA |
| Bond Insurance / Surety — Olympia Guaranty (initial premium) | Olympia Guaranty Insurance Corp. | $23,220.00 | Annual premium: 0.20% × $11,610,000 surety amount; Policy No. OG-2023-MUN-4718 |
| Official Statement Printing and Distribution | Various | $55,000.00 | POS dated June 26, 2023; Final OS dated September 5, 2023 |
| CUSIP Bureau Fee | CUSIP Global Services | $2,500.00 | CUSIP Base: 148392 |
| DTC / Book-Entry Fees | Depository Trust Company | $5,000.00 | Book-entry-only; Cede & Co. as registered owner |
| Miscellaneous (recording, courier, filing, etc.) | Various | $394,280.00 | Estimated miscellaneous closing costs |
| TOTAL COSTS OF ISSUANCE | $1,870,000.00 | Funded from bond proceeds |
[sheet: Capitalized Interest Detail]
| Item | Value | Notes |
| Aggregate Principal Amount | $220,000,000.00 | Series 2023A Bonds |
| Fixed Coupon Rate | 3.25% | 325 basis points; fixed per deal terms |
| Dated Date | October 24, 2023 | Bond closing date |
| First Interest Payment Date | April 1, 2024 | Semi-annual; approximately 159 days |
| Capitalized Interest Period | October 24, 2023 – April 1, 2024 | First coupon period |
| Interest Accrued for Period (estimated) | $4,510,000.00 | Portion of first coupon funded from proceeds |
| Source of Funds | Bond Proceeds | Included within COI allocation from net bond proceeds |
| Deposit to Capitalized Interest Fund at PNTC | $4,510,000.00 | Held by Trustee for April 1, 2024 payment |
[sheet: DSRF Surety Detail]
| Item | Value | Notes |
| DSRF Requirement | $11,610,000.00 | Equal to maximum annual debt service (MADS) on Series 2023A Bonds |
| Method of Satisfaction | Surety Bond | No cash deposit required; satisfied by surety policy |
| Surety Provider | Olympia Guaranty Insurance Corp. | NY-domiciled financial guaranty insurer; 125 Broad Street, 14th Floor, New York, NY 10004 |
| Policy Number | OG-2023-MUN-4718 | |
| Surety Amount | $11,610,000.00 | Equal to MADS |
| Annual Premium | $23,220.00 | 0.20% of surety amount ($11,610,000 × 0.0020) |
| First Premium Payment | At closing — October 24, 2023 | Funded from Costs of Issuance |
| Trustee Holding Surety | Pacific Northwest Trust Company, N.A. | As Trustee under the Bond Indenture |
| Underwriting Contact | Rachel P. Dominguez, SVP | Olympia Guaranty Insurance Corp. |
DSRF Requirement Calculation — Alternative Tests:
| (i) Maximum Annual Debt Service | $11,610,000.00 | Approximate level P+I, 30-year amortization |
| (ii) 125% of Average Annual Debt Service | Calculated per indenture | |
| (iii) 10% of Original Par Amount | $22,000,000.00 | $220,000,000 × 10% |
| DSRF Requirement = Lesser of (i), (ii), (iii) | $11,610,000.00 | MADS is the binding constraint |