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HomeMy WebLinkAboutC24-444 G-17 Disclosure LetterCapital Markets 0 September 9, 2024 Attn: Jill Klosterman Eagle County P. O. Box 850 500 Broadway Eagle, CO 81631 Re: $20,000,000 * Certificates of Participation, Series 2024 (Bonds) Dear Jill Klosterman: RBC Capital Markets, LLC Municipal Finance 1801 California Street, Suite 3850 Denver, CO 80202 Telephone: 303-595-1200 RBC Capital Markets, LLC (RBCCM) is writing the Chief Financial Officer of Eagle County (Issuer) to: (i) Confirm the engagement of RBC Capital Markets, LLC as underwriter, and not as a financial advisor or municipal advisor, in connection with the issuance of the above -captioned Bonds pursuant to the Securities and Exchange Commission's Municipal Advisor Rule, and (ii) Provide certain disclosures as required by the Municipal Securities Rulemaking Board (MSRB) Rule G-17 as set forth in MSRB Notice 2019-20 (Nov. 8, 2019).1 As part of our underwriting services, we may provide advice concerning the structure, timing, terms, and other similar matters concerning the issuance of the Bonds. The following MSRB Rule G-17 (Rule G-17) conflict of interest disclosures are now broken down into three types, including (i) dealer -specific conflicts of interest disclosures; (ii) transaction -specific disclosures (if applicable); and (iii) standard disclosures. I. Dealer -Specific Conflicts of Interest Disclosures RBCCM has identified the following potential or actual material conflicts: ORDINARY COURSE OF BUSINESS ACTIVITIES AND RELATIONSHIPS RBCCM and its affiliates comprise a full service securities firm and a commercial bank among other entities. RBCCM engages in municipal advisory activities, securities trading and underwriting, corporate investment banking, asset management, retail and institutional brokerage, and other commercial and investment banking products and services for a wide range of corporations, municipal entities and individuals_ o The activities of RBCCM and its affiliates may include investment in, and trading of, securities and other financial instruments for their own account or the account of customers relating to the securities and/or financial instruments of the Issuer and/or the Obligor. ' Revised Interpretive Notice Concerning the Application of MSR13 Rule G-17 to Underwriters of Municipal Securities (effective Mar, 31, 2021). RBCCM and its affiliates may also communicate independent investment recommendations, market advice or trading ideas and/or publish or express independent research views relating the securities of the Issuer and/or the Obligor. c, RBCCM maintains business relationships with municipal advisory firms, broker -dealers, law firms and other transaction participants as part of its national municipal securities business but does not utilize referral arrangements with such entities regarding municipal underwriting, sales or trading. Further, RBCCM does not maintain any distribution agreements with respect to municipal securities offerings. 11. Transaction -Specific Disclosures • Disclosures Concerning Complex Municipal Securities Financing_ o Since RBCCM has not recommended a "complex municipal securities financing" to the Issuer, additional disclosures regarding the financing structure for the Bonds are not required to be furnished by RBCCM under Rule G-17. III. Standard Disclosures • Disclosures Concerning the Underwriter's Role: o MSRB Rule G-17 requires an underwriter to deal fairly at all times with issuers, obligors and investors. o The underwriter's primary role is to purchase the Bonds with a view to distribution in an arm's-length commercial transaction with the Issuer and/or the Obligor. The underwriter has financial and other interests that differ from those of the Issuer and/or the Obligor. o Unlike a municipal advisor, an underwriter does not have a fiduciary duty to the Issuer and/or the Obligor under the federal securities laws and is, therefore, not required by federal law to act in the best interests of the Issuer and/or the Obligor without regard to its own financial or other interests. o The Issuer and/or the Obligor may choose to engage the services of a municipal advisor with a fiduciary obligation to represent the Issuer..'Obligor's interest in this transaction. o The underwriter has a duty to purchase the Bonds from the Issuer and/or the Obligor at a fair and reasonable price, but must balance that duty with its duty to sell the Bonds to investors at prices that are fair and reasonable. o The underwriter will review the official statement for the Bonds in accordance with, and a part of, their respective responsibilities to investors under the federal securities laws, as applied to the facts and circumstances of this transaction! 2 Under federal securities law, an issuer of securities has the primary responsibility for disclosure to investors. The review of the official statement by the underwriters is solely for purposes of satisfying the underwriters' obligations tinder the federal securities laws and such review should not be construed by an issuer as a guarantee of the accuracy or completeness of the information in the official statement. • Disclosures Concerning the Underwriter's Compensation: The underwriter will be compensated by a fee and/or an underwriting discount that will be set forth in the bond purchase agreement to be negotiated and entered into in connection with the issuance of the Bonds. Payment or receipt of the underwriting fee or discount will be contingent on the closing of the transaction and the amount of the fee or discount may be based, in whole or in part, on a percentage of the principal amount of the Bonds. While this form of compensation is customary in the municipal securities market, it presents a conflict of interest since the underwriter may have an incentive to recommend to the Issuer and/or the Obligor a transaction that is unnecessary or to recommend that the size of the transaction be larger than is necessary. If you or any other Issuer and/or Obligor officials have any questions or concerns about the engagement of RBCCM or these disclosures, please make those questions or concerns known immediately to the undersigned. In addition, you should consult with the Issuer and/or the Obligor's own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent you deem appropriate. This engagement is preliminary, non -binding and may be terminated at any time without penalty or liability for costs incurred by the underwriter. Please note that nothing in this letter should be viewed as a commitment by the underwriters to purchase or sell all the Bonds and any such commitment will only exist upon the execution of any bond purchase agreement or similar agreement and then only in accordance with the terms and conditions thereof. You have been identified by the Issuer as a primary contact for the Issuer receipt of these disclosures, that you are not a party to any disclosed conflict of interest relating to the subject transaction. If our understanding is incorrect, please notify the undersigned immediately. Please sign and return the enclosed copy of this letter to me via PDF or to the address set forth herein. Depending on the structure of the transaction that the issuer decides to pursue, or if additional actual or potential material conflicts are identified, we may be required to send you additional disclosures regarding the material financial characteristics and risks of such transaction and/or describing those conflicts. At that time, we also will seek your acknowledgement of receipt of any such additional disclosures. We look forward to working with you in connection with the issuance of the Bonds. Thank you. Sincerely, Dan O'Connell, Managing Director RBC CAPITAL MARKETS, LLC Acknowledgement to G-17 Disclosure Letter: Aef Q� c��t11rD��� C ON►�1'hJ1 EAGLE COUNTY Date: ��'� •��