The following describes the City’s requirements in establishing the LOC: 1. Amounts: The City is requesting a LOC for an amount up to $6.7 million. The City may draw up to the maximum amount of the LOC. The City does not have a draw schedule in place at this time. 2. Structure: The City desires to have the flexibility to draw on the LOC for a period of twentyfour (24) months. At the end of the draw period, the City would prefer the option to convert the line of credit to a term loan with an amortization period of preferably 5 years, but no less than 3 years. Other options may be considered. That said, the City expects to refinance the LOC into long-term term-loan financing during or at the end of the draw period. 3. Interest Rate Options: The City requests a variable rate loan based on SIFMA, SOFR, or a similar publicly available index. Provide a quote for a tax-exempt LOC. Please detail provisions for setting the interest rate upon conversion to a term loan at the end of the draw period, if that option is offered. It is the preference of the City to avoid or minimize an unutilized fee. The City will give preference to responses that feature no, or minor unutilized fee options. 4. Repayment Provisions: During the draw period, the City expects to pay interest only on a monthly basis. After the termination of the draw period, the City would either pay the LOC off, or if a term-loan option is available, make principal and interest payments, with the outstanding principal to be amortized over a period of not less than three (3) years. During the term loan period, principal and interest payments on the outstanding principal balance of the LOC will be fixed and calculated on a 30/360-day basis and will be paid semiannually on March 1 and September 1, beginning on the September 1 or March 1 after the conclusion of the draw period. Alternative payment frequencies (monthly, etc.) will be considered. 5. Prepayment Provisions: The LOC shall be prepayable with no prepayment penalty, in whole or in part at any time. 6. No Reserve: The City will not fund a debt service reserve to secure the LOC.
