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March 02, 2020Reservation Economic Summit 2020
Accessing Capital: Capitalizing Your Business or Tribal ProjectNative American Financial Services
©2018 KeyCorp. Confidential
Native American Financial Services - Overview
• Commercial Banking• Industry Expertise• Key Team• NAFS History and Focus• Types of Funding• Syndicated Financing• Key Government Finance– Tax Exempt Financing
• New Market Tax Credits• Public Sector• Things to Consider
2
The Role of Commercial Banking
3
Native American Financial Services ("NAFS") provides full commercial banking services that combine individual attention through Senior Bankers as well as tailored solutions provided by Industry Vertical Bankers and Product Specialists
• The Bellevue, Washington-based NAFS team will manage the relationship with your organization and commit to delivering customized solutions and strategic advice
• The goal is to develop meaningful long-term client relationships using a solutions-based, product agnostic approach to capital raising, advisory, and treasury needs
Corporate Banking
§ Integrated Team Approach
§ Geographically Focused
§ Industry Aligned
Loans Deposits & Treasury Management (ECP)
Advisory Services Investment Management
Institutional Banking
Loan Syndications Derivatives & ForeignExchange
Equity Capital Markets Equity Research
M&A / Fin Sponsors / Leveraged Finance
Investment Grade & High-Yield Debt
Commercial MortgageBanking Public Finance
KeyBanc Capital Market Capabilities
Native American
Energy
KeyBank Industry Specialists
Consumer
Healthcare
Industrial
Real Estate
Tribe
Deep Industry Expertise Paired with Best-In-Class Product Capabilities
4
Capabilities
Debt Capital Markets
• Loan Syndications• High Yield• Leveraged Cash Flow
Financing• Asset-Based Lending
M&A
• Advisory Services• Buy-side M&A• Sell-side M&A• Private Capital Raise
Sales & Trading
• Institutional Equities• Investment Grade Debt• High Yield Debt• Foreign Exchange
Corporate Banking
• Commercial Lending• Treasury Management• Asset Based Lending• Derivatives• Foreign Exchange
• Equity Research• Securities Issuance• Equity Syndications• Focused Industry
Conferences
Equity Capital Markets
Dedicated Senior Banker Attention
Bulge Bracket Resources Focused on
Selected Sectors
Strategically Aligned in Industries Where We
Possess Deep Expertise
Disciplined Focus on Small & Mid Cap
Companies Through Economic Cycles
Longstanding Client Relationships Built
Upon Insightful Strategic Advice
Industrial
• Automotive• Building Products• CE&I• Industrial Distribution• Industrial Technology• Metals & Mining• Packaging• Specialty Chemicals• Transportation &
Logistics
Industry Specialists
Consumer
• Apparel & Footwear• Active & Outdoor /
Leisure• Food & Beverage• Gaming & Travel • Home Environment• Personal Care• Restaurants /
Foodservice• Specialty Retail
Energy
• Investor Owned Utilities• Public Power• Independent Power
Producers• Renewable Energy• Midstream• Oil & Gas• Clean Technology
Healthcare
• Facility Based Services• HCIT• Payer / Provider
Outsourcing• Pharmacy Services• Drug Development
Services• Managed Care• Distribution
Real Estate
• Multi-Family• Office• Industrial• Student Housing• Data Centers• Infrastructure• Self-storage• Hotels• Healthcare• Triple-Net
Native American
• Casino Gaming and Hospitality
• C-Store• Governmental
Infrastructure and Administration
• Natural Resources and Energy
• Agriculture• Non-gaming Economic
Development
Your Key Team
5
Your dedicated Relationship Manager will: • Navigate the full breadth of Key’s expertise, insight, and strategic guidance to deliver the Bank to you• Present ideas and capabilities in an integrated way• Efficiently transfer knowledge among your dedicated teamWe are a team of experts working on behalf your Tribe, its Enterprises, and Members.
PaymentsRyan Bilsky• Manage your cash
SyndicationsKevin Brickman• Lead multi-investor transactions
Investment ManagementJeff Wortley• Manage and protect financial assets
Debt Capital MarketsGeoff Urbina• Taxable / Tax-exempt bond financing
DerivativesWil Spink• Manage interest rate risk
Key Government FinanceKendall Hansen• Tax exempt financing structures
Native American Financial ServicesManaging Director
Native American Financial ServicesMike Lettig, National Executive
Native American Financial ServicesDirector
6
KeyBank Native American Financial Services
60+ yearsof business in Indian Country
70+ Native American Tribesserved across the U.S.
$2.0 Billioncredit commitments to Indian Country
$1.0 Billion deposits for Tribes and Tribal Entities
$2.0 Billion assets under management
Tribal Government & Public Finance
Casino Gaming & Hospitality
Non-Gaming Economic Development
Natural Resources & Energy
Tribal Sector FocusHistory and Overview
Native American Financial Services Clients Served (16 States)
Native American Financial Services Headquarters, Bellevue WAAdditional Presence, Ann Arbor, MI, Oklahoma City, OK, and Portland, OR
National Geographic Coverage
KeyBank Native American Financial Services
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Governmental Infrastructure and
Administration
Natural Resources and
Energy
Agriculture
RetailDevelopment
Economic Development
• Tax Exempt Credit• Tax Exempt Capital
Markets• Healthcare Finance• Construction
Finance
• Production Agriculture• Vertically Integrated
Agriculture• Crop Financing• Equipment Financing
• Acquisition Finance
• New Markets Tax Credits
• Leasing• TED Bond
Advisory
• Construction Finance• Tax Revenue Pledge• Renovation Financing• Operating Lines
• Independent Power Producers
• Public Power• Renewable Energy• Midstream• Oil & Gas
Casino Gamingand Hospitality
• Syndicated Credit• Construction and
Expansion• Equipment Leasing• Capital Markets and
Debt Restructuring
Syndicated Finance
• Consists of a nationwide practice of over 50 professionals
• Nationally recognized syndication practice providing origination, structuring, distribution, trading, and servicing of syndicated debt
• Professionals work with clients to structure marketable syndicated credit facilities by balancing client needs with market demands
8
Best-in-class execution of syndicated transactions Select Senior Professionals
Select KBCM Agency Relationships
Strong support of our clients with meaningful event driven financing results in repeat lead arranger roles
Strong, consistent performance through loan market cycles
• Raised over $34.8 billion in capital commitments across 120 corporate, leveraged finance and real estate transactions in 1H17
• Raised over $79.9 billion in capital commitments across 226 corporate, leveraged finance and real estate transactions in 2016
• Raised over $60.9 billion in capital commitments across 208 corporate, leveraged finance and real estate transactions in 2015
Amy CarlsonExecutive Vice
President / Headof Debt Capital
Markets
• Head of Debt Capital Markets, Origination and Structuring
• 29+ years of experience in structuring and consummating multi-investor financing for both public and private companies in a multitude of industries
Beth MikesManaging Director / Head of Corporate
Syndications
• 25 years of experience in banking, financial analysis and project management experience
• Focused on loan origination, structuring and distribution for corporate clients in each of Key’s industry lines of business and middle market segments
Kevin BrickmanManaging Director
• 10+ years in the banking industry• Supports origination, structuring and distribution of loans
for public and private clients in a wide variety of industry sectors
John KernVice President
• 15+ years experience in public accounting, asset securitization, leveraged finance and corporate syndications
• Supports structuring and syndication of corporate and acquisition financings for public and private companies
Key Government Finance
• Road Construction• Qualified Tribal Economic Development Projects• Water and Utility Infrastructure• Tribal Government Buildings• Hospitals
9
Tribal Government Infrastructure Projects Innovative Products and Structures
Balancing governmental budgets with capital project funding needs requires planning and goal setting. KeyBank’s Native American Financial Services, along with Key’s Government Finance team of specialists, have helped many Native American Nations achieve their goals by providing financing solution for government related projects.
• Tribal Economic Development (TED) Bonds• Tax and Utility Revenue Bonds• Balance-sheet Loans• Investment Secured Credit Facilities• General Obligation Tax Exempt Financing
Select Governmental Transactions Senior Professionals
Kendall HansenSenior Vice President
• Head of Debt Capital Markets, Origination and Structuring• 20+ years of experience in structuring and consummating multi-
investor financing for both public and private companies in a multitude of industries
Janice ThomanVice President
• Senior Loan Servicer• 20+ years of experience in servicing multi-investor financing for
both public and private companies in a multitude of industries
Tribal Economic Development Bond
Senior SecuredTaxable Financing
General Obligation Tax-exempt Financing
General Obligation Tax-exempt Financing
General Obligation Tax-exempt Financing
Joint Lead Arranger
General Obligation Tax-exempt Financing
General Obligation Tax-exempt Financing
Stillaguamish Tribe of Indians
$15,000,000Tribal AdministrationBuilding Construction
Stillaguamish Tribe of Indians
$7,000,000Tribal Natural Resources
Building Construction
Stillaguamish Tribe of Indians
$7,000,000Hotel and Golf Course
Refinance
Stillaguamish Tribe of Indians
$6,300,000Information Technology
Infrastructure
Muscogee Creek Nation
$86,000,000Hospital and Clinic
Construction
Navajo Nation
$60,000,000Judicial and Correctional Facilities Construction
Confederated Tribes of the Colville Reservation
$38,000,000Tribal AdministrationBuilding Construction
Match-e-be-nash-she-wishBand of PottawatomiIndians of Michigan
$20,000,000Tribal Government
Center Construction
Tax-exempt Financing for Native American Governmental Projects
• Tribes are treated similar to states and other municipalities for purposes of borrowing for their governmental projects
• Tribes can issue tax-exempt debt used in the “exercise of an essential government function
• Interest earnings on tax-exempt debt can be excluded from income, which results in decreased borrowing costs for the Nation
10
Indian Tribal Government Tax Status Act of 1982 Key Government Finance
Tax-exempt financing structures allow Native American Tribes to borrow money at lower rates for essential government functions
Examples of Tax-exempt Qualified Projects
Characteristics of Tax-exempt Financing
• Lender/investor does not pay federal income tax on interest payments received from tribal issuer
• Lower interest rates for tribal issuer (typically 1-2%)• The proceeds must be used for “essential government
purposes” as defined by the IRS• Different investor pool than taxable debt• Tax exempt debt service can be paid for/secured by cash flow
from casino/resort or other “taxable” sources, but the proceeds from tax-exempt financings cannot be utilized for taxable purposes (must only be utilized for infrastructure)
Non-gaming Economic Development Tribal Government Buildings
Schools Hospitals
KeyCorp
Native American Financial Services
Key Government Finance, Inc.
• Taxable Financing• Deposit Accounts• Investment
Management and Trust
• Tax Exempt Financing• Tribal Economic
Development Bonds• Equipment Financing
New Market Tax Credits
11
• New Market Tax Credits (“NMTCs”) provide tax credit incentives to investors for equity investments in certified Community Development Entities.
• Community Development Entities then invest in Qualified Active Low Income Community Business, which are entities formed for the qualifying project at hand.
• Recipients of NMTCs receive an equity investment alongside more traditional bank financing to fund the project.
• Capital does not need to be repaid to the NMTC investor. The NMTC funds essentially becomes the project’s own equity.
• This structure may provide significant cost savings, as the project does not repay the NMTC principal investment
Provides ~75% of capital needed for project
(Debt)
Provides ~25% of capital needed for project
(Equity) Investment Fund
Community Development Entity
Qualified Active Low Income Community
BusinessThe Project
Fees are paid to the CDE
Leverage Lender(KeyBank)
NMTC Investor
Public Sector – Debt Capital Markets
12
Large Taxable & Tax-Exempt
Primary Market Fixed Income
Practice Group
Select Native American Financing and Investors
98 Person Sales & Trading Professionals
24 Professionals Dedicated to Tribal Tax-Exempt High Yield Distribution
covering over1,600 institutional investors
Underwriting Capabilities Broader Reach to Investors Product Offering
• Underwriting capabilities exceed $2.0 billion per offering
• Specialized coverage for Native American Tribes
• Multiple offices across the country: Atlanta, Boston, Charlotte, Chicago, Cleveland, New York City, San Francisco and Seattle
• Sales professionals service long-term Tier 1, Tier 2 and Tier 3 institutional accounts
650 Tax-Exempt Underwritings
Since 2010
980 Primary Market Fixed Income Transactions
Since 2010
$152.5 Billion $89.7 Billion
Sector Knowledge Deepest Account Relationships Debt Capital Markets Finance Team
• Direct Placements• Private Placements• Public Offerings• Tax-Exempt Syndicated Loans
Geoff Urbina Managing Director, Regional ManagerOffice: (206) 684-6259Email: [email protected]
Caitlin CaldwellVice PresidentOffice: (206) 684-6040Email: [email protected]
Odin AtkinsonAnalystOffice: (206) 684-6209Email: [email protected]
Additional Strength from Alignment with KBCM and ~$135B KeyCorp
1 of top 10 full-service firms by broker share; weighted by commission size of institution and each broker's relative importance to institutions on sector-by-sector bases; share shows each broker's share of total commissions based on buy-side analysts' broker vote
Things To Consider For Your Project
• 3 Years Historical Financials (Audited if available)– Government– Enterprise
• Most recent Interim Financial Statements • Projected Financials (5 years if possible)• Project Information
– Architecture /Building plans– Business Valuation– Capital Project Plans
• Market Studies• Waivers of Sovereign Immunity
– Required for most transactions
13
Contact Info
14
Allard TeepleVice President – Portfolio ManagerKeyBank Native American Financial [email protected]
Website: https://www.key.com/businesses-institutions/industry-expertise/native-american.jsp