BOARD AGENDA MEMORANDUM
SUBJECT:
Title
Receive Information and Authorize Staff to Proceed with Negotiation and Execution of Bank Line(s) of Credit with Aggregate Stated Amount Not to Exceed $200 Million.
End
RECOMMENDATION:
Recommendation
A. Receive information regarding bank line(s) of credit solicitation; and
B. Authorize staff to proceed with negotiation and execution of bank line(s) of credit with aggregate stated amount not to exceed $200 Million.
Body
SUMMARY:
Executive Summary
On April 28, 2020, the Santa Clara Valley Water District's (Valley Water) Board of Directors authorized staff to proceed with issuing a request for proposal (RFP) for bank line(s) of credit up to $200 million to provide backup liquidity for Valley Water's capital improvement program and general financing needs in light of the ongoing economic uncertainties related to the COVID19 pandemic (Resolution 20-11). The results of the RFP were presented to the Board at its meeting on June 9, 2020 where the Board directed staff to conduct additional research regarding the environmental, social and governance (ESG) policies of each of the five banks (MUFG Union Bank, JPMorgan Chase, US Bank, UBS and Bank of America) who responded to the RFP and return to the Board to present this additional analysis.
Staff evaluated the ESG ratings provided by professional ESG research firms and recommends that the Board consider the "Average/Medium" ratings that each bank received from the ESG research firms be the basis of eligibility for the bank line(s) of credit RFP (see Attachment 1 for ESG evaluation criteria). From a business terms and pricing perspective, the most favorable proposal was submitted by MUFG.
Staff requests Board approval to proceed with negotiations and execution of bank line(s) of credit for an amount up to $180 million provided by a lead bank and an additional $20 million syndicated loan reserved for small local banks, for a total bank line(s) of credit amount not to ...
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