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HFA Initiative WebinarSettlement Process
Monday, December 7, 2009
11 a.m. – 12 noon
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Agenda
1. Special Advisor Role
2. Pre-Settlement Requirements
3. HFA Bond Settlement (12/21)
4. GSE Bond Settlement (12/23)
5. Contact Information
6. Questions
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• In order to ensure the successful settlement of the Program Bonds and the GSE Securities, HFA Special Advisors must:
• do all things necessary to register the Program Bonds with DTC so they can be settled, released and credited to the Closing Agent on the pre-settlement day, and
• provide the GSEs with a 10b-5 opinion with respect to the Official Statement issued for the Program Bonds.
• The Special Advisor may be any experienced party able to successfully perform the duties detailed in the Placement and Settlement Agreements with regard to properly setting up and processing bonds through DTC.
• Despite the fact that an HFA’s Program Bonds will not be traditionally underwritten or placed by an investment bank, an investment bank is generally skilled and experienced in performing the duties required of the Special Advisor under this Program.
• Similarly, a qualified Financial Advisor may routinely and customarily perform the duties required of the Special Advisor within this Program.
• The Special Advisor will provide a UW Source spreadsheet to US Bank instead of providing the Eligibility Questionnaire to DTC.
• US Bank will register the program bonds with DTC and US Bank will be listed as the ‘Lead Underwriter’ on the DTC System.
Special Advisor Role
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Pre-Settlement Requirements
Due Date Requirement
Dec 7 • Two templates of the UW Source Spreadsheets will be posted to the trade websites. One for escrowed and one for simultaneous issuance. The fixed rate and escrowed securities will be submitted as sub-issue type Municipal Bond.
• Certain fields will be pre-populated by USBank to accommodate the HFA Initiative.
Dec 8 • Special Advisors help HFAs finalize deal documents and prepare UW Source Spreadsheets.
On or before Dec 9
• Special Advisor will check and ensure that there is a Letter of Representation of the HFA (i.e., Issuer) on file with DTC
• HFAs provide final Official Statement and 10b-5 Certificate to GSE Special Closing Counsel. Program Bonds and Official Statements will have a settlement date / dated date of December 21, 2009.
On or before Dec 11
• HFA Special Advisors email the Official Statement and the UW Source spreadsheet to US Bank at [email protected] to facilitate loading bonds onto DTC.
• DTC will configure each HFA issue to close directly to US Bank’s DTC Participant account #2803.
Dec 14-21 • HFA delivers signed Program Bond certificate (Global Certificate) to Bond Trustee for authentication and retention as DTC's agent under FAST (with a
copy to GSE Special Closing Counsel).
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Key Steps
• Beginning at 9:00 AM, DTC’s systems will establish a one-sided FAST inventory with each of the HFA Trustees. Each respective Trustee will confirm bond information in the DTC FRAC screens. This can begin as early as 6:00 AM.
• To issue the HFA bonds DTC, USB and the HFA Trustees will participate on the DTC “closing call”
• Upon agreement by all parties that the settlement requirements have been met, DTC will issue Program Bonds
• Each HFA trustee will close all of their HFA clients on the same DTC call. For example if Wells is Trustee for Iowa and New York they will close both issuances on the same “closing call.” All “closing calls” must take place no later than 1:15 p.m. on December 21.
• Program Bonds will be delivered directly to US Bank acting as Closing Agent, to be held in escrow pending the December 23 settlement.
• USB, at the end of the day will notify the GSEs, each HFA, Treasury and JPMC which HFAs have successfully settled their bonds
HFA Bond Settlement (12/21)
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• GSE securities issued to JPMorgan Chase, acting as Treasury’s agent, and purchased simultaneously by Treasury.
• GSE Legal Counsel fees, GSE Securitization fees, and DTC fees are netted against settlement proceeds and GSE Legal Fee Deposits.
• HFA receives net settlement proceeds from USBank.
GSE Bond Settlement (12/23)
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Contact Information
USBank• Email the Official Statement and the UW Source spreadsheet to US
Bank at [email protected] to facilitate loading bonds onto DTC.
For questions related to the spreadsheet please contact: • David Massa
NY Corporate Trust ManagerU.S. Bank Corporate Trust Services100 Wall Street, Suite 1600New York, NY 10005Phone (212) 361-4386Fax (212) 809-4993Email: [email protected]
• Fannie Mae & Freddie MacPlease contact your assigned Deal Manager
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Questions...
Q&A
