2/2/16
BondsBasics,Issuance
ProcessandEconomy
Update
February10,2016
Disclaimer
RBC Capital Markets, LLC (“RBC CM”) is providing the information contained in this document for discussion purposes only and not in connection with
RBC CM serving as Underwriter, Investment Banker, municipal advisor, financial advisor or fiduciary to a financial transaction participant or any other
person or entity. RBC CM will not have any duties or liability to any person or entity in connection with the information being provided herein. The
information provided is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of
1934. The financial transaction participants should consult with its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it
deems appropriate.
This presentation was prepared exclusively for the benefit of and internal use by the recipient. This presentation is confidential and proprietary to RBC
Capital Markets, LLC (“RBC CM”) and may not be disclosed, reproduced, distributed or used for any other purpose by the recipient without RBCCM’s
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limitation of any kind from the commencement of discussions, the tax treatment, structure or strategy of the transaction and any fact that may be relevant
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recipient relating to such tax treatment, structure, or strategy.
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available sources, the completeness and accuracy of which has not been independently verified, and cannot be assured by RBC CM. The information
and any analyses in these materials reflect prevailing conditions and RBC CM’s views as of this date, all of which are subject to change.
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the oral presentation or other written materials that supplement it.
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should seek advice based upon your particular circumstances from an independent tax advisor.
1
RBC Capital Markets
1
2/2/16
Issuing Municipal Bonds
What is a bond??
• 
A bond is a loan……plain and simple.
–  The terms, pay-back dates and interest rates are carefully spelled out in the
legal documents.
• 
When local governments, such as school districts, need money to pay for
something today, like construction of a high school, they promise to pay for it over
a period of time in the future. Those promises are called bonds.
• 
Reasonably safe bonds are called “investment grade.” Riskier bonds are called
“below investment grade.”
• 
Billions of bonds are issued every year in the U.S. and the bond market in its
entirety is incredibly large, $3.7 trillion*.
• 
Sometimes bonds are referred to by a different name which makes understanding
bonds even more confusing.
–  Bonds are often called fixed income securities; and
–  Bonds are also called debt securities
3
*as of Q3 2015. Source SIFMA
RBC Capital Markets
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2/2/16
What exactly is the “bond market”??
• 
The bond market (also known as the credit or fixed income market) is a
financial market where participants issue new debt (known as the primary
market) or buy and sell debt securities (known as the secondary market). This
is usually done in the form of “bonds”. Within the bond market are various
sectors including U.S. Treasuries, agencies, corporate and municipal bonds.
• 
The primary goal of the bond market is to provide a mechanism for long-term
funding of public and private capital expenditures.
• 
Daily trading in the U.S. bond market takes place between broker-dealers and
large institutions in a decentralized, “over-the-counter” market.
• 
The “bond market” is significantly influenced by the U.S. government bond
market because of its size ($2.8 trillion), liquidity, relative lack of credit risk and,
therefore, sensitivity to interest rates.
• 
Because of the relationship between bond valuation (the fair price of a bond)
and interest rates, the bond market is often used to indicate changes in interest
rates or the shape of the yield curve.
–  The yield curve is the measure of “cost of funding”.
4
*as of Q3 2015. Source SIFMA
RBC Capital Markets
Municipal Finance Professionals
§  Issuer: A governmental entity through which tax-exempt municipal bonds are issued.
§  Bond Counsel: An outside counsel to the issuer who gives an opinion on the tax-exempt status and
validity of the bond issue.
§  Municipal Advisor: An investment banking firm which advises the issuer in all facets of the bond process
including method of sale. A municipal advisor acts in a fiduciary capacity and advises on debt capacity,
debt structure, time schedules, interest rates and generally coordinates all professionals in the process of
issuing bonds.
§  Disclosure Counsel: Legal counsel hired by the issuer to provide due diligence and complete the
issuer’s offering document and may assist in continuing disclosure requirements.
§  Depository Trust Company (“DTC”):
Acts as securities depository for the Securities. DTC also
facilitates the post-trade settlement among DTC’s participants of sales and other securities transactions
through electronic computerized book-entry transfers between participants’ accounts. This eliminates the
need for physical movement of securities certificates.
§  Underwriter or Purchaser of Bonds: A financial institution that agrees to purchase an Issuer’s bonds at
either a set price or at a price as dictated by the public markets. An underwriter/purchaser does not have
a fiduciary responsibility to the issuer.
§  Underwriter’s or Purchaser’s Counsel: Legal counsel hired by the underwriter/purchaser to represent
the underwriter or underwriters, provides the Bond Purchase Agreement and in some cases completes the
issuer’s offering document.
§  Dissemination Agent: Assists the issuer in fulfilling their obligations to provide continuing disclosure
information to bondholders on a timely basis. Ensures compliance with Rule 15c2-12. Acts on behalf of
the issuer but does not provide financial advisory or underwriting services
5
RBC Capital Markets
3
2/2/16
Six Things to Know When Issuing Municipal Bonds
State and local governments rely on the municipal securities market
to raise money to finance projects. Issuing bonds, whether done
once a decade or annually, generally requires municipal
governments to hire financial professionals to help. The Municipal
Securities Rulemaking Board (“MSRB”) plays an important role in
defining the relationship that municipal governments have with
financial professionals. Below are six key things for state and local
governments to know about issuing municipal bonds:
Check if an underwriter or
municipal advisor is
registered with the MSRB
at msrb.org.
1.  MSRB registration is required for underwriters and municipal
advisors.
2.  Underwriters and municipal advisors must provide accurate
information related to the sale of bonds.
3.  Municipal advisors owe a fiduciary duty to their state or local
government issuer clients.
4.  State and local governments can use different approaches to
financing capital projects to borrow at the lowest possible cost.
5.  State or local government issuers can use the EMMA system to
communicate important information directly to investors.
The MSRB operates the
EMMA website as a
centralized platform for
state and local
governments to
communicate important
information to investors.
6.  State or local government issuers can use EMMA to track bond
trading.
Source: www.msrb.org and www.emma.msrb.org
RBC Capital Markets
6
Credit Yield Curve
Cost of Borrowing
1/25/16
4
3.5
3
Rate
2.5
2
1.5
1
0.5
0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046
Year
Aaa
Aa
A
Baa
Source: Municipal Market Data
7
RBC Capital Markets
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2/2/16
Definitions of Credit Ratings
Moody’s
Standard & Poor’s
& Fitch Ratings
Aaa
AAA
Aa1/Aa2/Aa3
AA-/AA/AA+
A1/A2/A3
Baa1/Baa2/Baa3
A-/A/A+
BBB-/BBB/BBB+
Highest possible rating - principal and interest
payments considered extremely secure.
High quality - differs from highest rating only
in the degree of protection provided
bondholders.
Good ability to pay principal and interest
although more susceptible to adverse effects
due to changing conditions.
Adequate ability to make principal and
interest payments -- adverse changes are
more likely to affect the ability to service debt.
RBC Capital Markets
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Moody’s Scorecard
9
Source: Moody’s Investor Services
RBC Capital Markets
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2/2/16
Moody’s Scorecard
10
Source: Moody’s Investor Services
RBC Capital Markets
Moody’s Scorecard Adjustment Factors
11
Source: Moody’s Investor Services
RBC Capital Markets
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2/2/16
Moody’s Ratings of New Mexico School Districts
Rating
District
Rating
District
Albuquerque Public School District, NM
Aa1
Texico Municipal School District, NM
A1
Santa Fe Public School District, NM
Aa1
Truth or Consequences Municipal School District, NM
A1
Farmington Municipal School District, NM
Aa2
Belen Consolidated School District, NM
A2
Los Alamos Public School District, NM
Aa2
Cloudcroft Municipal School District, NM
A2
Roswell Independent School District, NM
Aa2
Deming Public School District, NM
A2
Alamogordo Public School District, NM
Aa3
Dexter Consolidated School District, NM
A2
Aztec Municipal School District, NM
Aa3
Dulce Independent School District, NM
A2
Carlsbad Municipal School District, NM
Aa3
Espanola Public School District, NM
A2
Clovis Municipal School District, NM
Aa3
Estancia Municipal School District, NM
A2
Hobbs Municipal School District, NM
Aa3
Grants-Cibola County School District, NM
A2
Las Cruces Public School District, NM
Aa3
Pojoaque Valley Public School District, NM
A2
Rio Rancho Public School District, NM
Aa3
Tatum Municipal School District, NM
A2
Bernalillo Public School District, NM
A1
Jal Public School District, NM
A3
Bloomfield School District, NM
A1
Jemez Valley Public School District, NM
A3
Capitan Municipal School District, NM
A1
Logan Municipal School District, NM
A3
Central Consolidated School District, NM
A1
Lordsburg Municipal School District, NM
A3
Cimarron Municipal School District, NM
A1
Mesa Vista Consolidated School District, NM
A3
Eunice Public School District 8, NM
A1
Moriarty Municipal School District, NM
A3
Gadsden Independent School District, NM
A1
Quemado Independent School District, NM
A3
Gallup-McKinley County School District, NM
A1
West Las Vegas Public School District, NM
A3
Los Lunas Public School District, NM
A1
Penasco Independent School District, NM
Baa1
Loving Municipal School District, NM
A1
Raton Public School District, NM
Baa1
Lovington Municipal School District, NM
A1
Santa Rosa Consolidated School District, NM
Baa1
Portales Municipal School District, NM
A1
Silver Consolidated School District, NM
Baa1
Ruidoso Municipal School District 3 (Lincoln County), NM
A1
Chama Valley Independent School District, NM
Baa2
Taos Municipal School District, NM
A1
Socorro Consolidated School District, NM
Baa2
MedianRating:A1
Source:Moody'sInvestorServices,December2015
RBC Capital Markets
12
Moody’s Ratings of New Mexico School Districts
18
16
14
12
10
Rating
8
6
4
2
0
Aa1
Aa2
Aa3
A1
A2
A3
Baa1 Baa2
Approximately 31% of New Mexico school districts fall
in the A1 category. However upon request to Moody’s,
every school district that sells bonds in a competitive,
public sale can receive the “Aa1” rating of the NM
School District Enhancement Program.
13
Source: Moody’s Investor Services
RBC Capital Markets
7
2/2/16
Fitch Ratings 12 Best Practices of Strong Management
1)  Fund balance reserve policy/working capital reserves – Used to address
unanticipated revenue shortfalls or unanticipated expenditures, this provides a first
defense against deficit spending and helps maintain liquidity when budgeted drawdowns
are inevitable.
2)  Multi-year financial forecasting – The multi-years plan value is to anticipate future
challenges that may be encountered due to projected revenue and expense imbalances.
3)  Monthly or quarterly financial reporting and monitoring – Interim financial reporting
and monitoring can head off impending fiscal stress.
4)  Contingency planning policies – Issuers should have meaningful contingency plans
against the possibility of voter-ordered tax cuts and unforeseen events, including
revenue shortfalls.
5)  Policies regarding non-recurring revenue – Over-reliance on non-recurring revenue
items to pay for ongoing and recurring expenses is a credit concern. Non-recurring
revenue items include sales of fixed assets; budgetary savings from a debt refinancing;
court settlements, or tax collection windfalls resulting from changes at the state of
federal government.
6)  Debt affordability reviews and policies – Strong debt management practices are
evidenced by comprehensive debt policy statements that discuss the types and methods
of financing employed by issuers. Policy statements should include self-imposed debt
limitations or annual recurring revenue or spending.
7)  Superior debt disclosure practices – Superior disclosure practices go beyond the
documentation required by Rule 15c2-12.
8)  Pay-as-you-go capital funding policies – Help to keep an issuer’s debt low and
improves an issuer’s financial flexibility in the event of sudden revenue shortfalls or
emergency spending.
14
Source: Fitch Ratings.
RBC Capital Markets
Fitch Ratings 12 Best Practices of Strong Management – Cont.
9)  Rapid debt retirement policies or more than 65% in 10 years – Life of the debt should
not exceed the useful life of the asset or project being financed. Results from rapid debt
retirement include declining debt service schedules which provide additional financial
flexibility and debt capacity in future years.
10)  Five-year capital improvement plan integrating operating costs – Integrating future
operating costs from capital construction assumes that the issuer is also doing multi-year
forecasting of its operating fund. Implementing both of these practices contributes to
more favorable rating consideration.
11)  Financial reporting award (GFOA, ASBO) – The achievement of these awards gives
investors and credit analysts increased confidence that information disclosed in the
issuer’s financial reports and budgets is comprehensive and accurate.
12)  Budgeting award (GFOA, ASBO) – Same as above.
Relative Values of Best Practices in Fitch's Public Finance Ratings
Best Practice
Fund balance reserve policy/working capital reserves
Value*
Very Significant
Best Practice
Superior debt disclosure practices
Value*
Very Significant
Multiyear financial forecasting
Significant
Pay-as-you-go capital funding policies
Significant
Monthly or quarterly financial reporting & monitoring
Significant
Rapid det retirement policies
Significant
Contingency planning policies
Influential
Five year capital improvement plan w/ operating costs
Influential
Influential
Financial reporting awards
Influential
Budgeting awards
Influential
Policies regarding nonrecurring revenue
Debt affordability reviews & policies
Very Significant
* Values in descending order of importance are: very significant, significant and influential.
15
Source: Fitch Ratings.
RBC Capital Markets
8
2/2/16
Moody’s Six Critical Components of Strong Management
1.  Conservative budgeting techniques – A careful, organizational approach to budgeting
that ideally involves conservative fiscal policies and multi-year modeling.
2.  Fund balance policies – Adoption of a clearly delineated fiscal plan which includes a fund
balance target level and the instances in which reserves may be used.
3.  Debt planning – A formalized debt plan that includes target and maximum debt levels,
targets for pay-as-you-go funding of capital work, and incorporation of these debt policies
into a multi-year capital plan.
4.  Succession and contingency planning – A formalized succession/contingency plan
which typically includes written documentation of organizational structures, succession
plans should key personnel change, and specific scenarios to respond to likely changes
that might affect credit.
5.  Strategic planning for economic development – Feasible economic development plans
that suit the particular strengths and needs of the community, with clear guidelines that
detail allowable incentives.
6.  Timely disclosure – Timely audited financial documents that are attested to by an outside
firm, and the direct disclosure of any material events as soon as possible.
16
Source: Moody’s Investors Services
RBC Capital Markets
Assessed Value and
Bonding Capacity Impact
9
2/2/16
Assessed Valuation (Hypothetical Example, for illustration purposes only)
Breakdown of Assessed Valuation
$900,000,000
5.00%
$800,000,000
4.50%
4.00%
Assessed Valuation
$700,000,000
3.50%
$600,000,000
3.00%
$500,000,000
2.50%
$400,000,000
2.00%
$300,000,000
1.50%
$200,000,000
1.00%
$100,000,000
$-
0.50%
2011
2012
2013
2014
2015
Centrally Assessed
$50,225,919
57,251,607
58,824,222
65,951,269
72,594,358
Non-Residential
$149,045,318
151,942,241
154,445,079
155,931,836
159,287,739
Residential
$471,319,058
492,618,085
508,614,400
523,125,281
540,201,072
3.85%
4.66%
2.86%
3.20%
3.63%
% Growth from Previous Year
Tax Year
Total Valuation
Bonding Capacity
2011
2012
2013
2014
2015
670,590,295
701,811,933
721,883,701
745,008,386
772,083,169
40,235,418
42,108,716
43,313,022
44,700,503
46,324,990
5 year average growth rate
3.91%
10 year average growth rate
5.77%
0.00%
Source: County Assessor
RBC Capital Markets
18
Bonding Capacity (Hypothetical Example, for illustration purposes only)
BONDING CAPACITY
01/25/2016
2015 Assessed Valuation
$
Constitutional Debt Limitation (6% of Assessed Valuation)
$
Outstanding G/O Bonds Debt
(1,720,000)
Total Debt Outstanding
% Bonded to Capacity
19
46,324,990
(29,695,000)
Outstanding Education Technology Notes
Available Debt Capacity
772,083,169
(31,415,000)
$
14,909,990
67.81%
RBC Capital Markets
10
2/2/16
Assessed Valuation with Oil & Gas (Hypothetical Example, for illustration purposes only)
Breakdown of Assessed Valuation
$3,000,000,000
30.00%
25.00%
$2,500,000,000
20.00%
Assessed Valuation
$2,000,000,000
15.00%
$1,500,000,000
10.00%
$1,000,000,000
5.00%
$500,000,000
0.00%
$Oil & Gas
-5.00%
2011
2012
2013
2014
2015
$1,023,784,726
1,408,139,559
1,553,395,597
1,680,536,467
1,634,195,418
401,905,825
Centrally Assessed Tax Year
$307,843,399
332,012,098
341,602,306
377,310,222
Non-Residential
$105,001,567
115,855,084
134,260,683
143,182,352
152,082,083
Residential
$156,312,824
165,316,774
175,492,160
185,719,327
197,074,194
8.25%
-0.06%
% Growth from Previous Year
Tax Year
27.54%
2011
Total Valuation
1,592,942,516
Bonding Capacity
95,576,551
5 year average growth rate
10 year average growth rate
26.89%
2012
2,021,323,515
121,279,411
9.07%
2013
2,204,750,746
132,285,045
2014
2,386,748,368
143,204,902
2015
2,385,257,520
143,115,451
13.81%
10.68%
Source: County Assessor
RBC Capital Markets
20
Total Tax Rates (Hypothetical Example, for illustration purposes only)
State of New Mexico
2011
2012
2013
2014
2015
$0.000
1.362
$1.362
$0.000
1.360
$1.360
$0.000
1.360
$1.360
$0.000
1.360
$1.360
$0.000
1.360
$1.360
$7.083
0.000
$7.083
$7.084
0.000
$7.084
$7.048
0.000
$7.048
$6.946
0.000
$6.946
$6.882
0.000
$6.882
$5.070
1.503
$6.573
$5.055
1.456
$6.511
$5.058
1.470
$6.528
$4.991
1.981
$6.972
$4.959
1.876
$6.835
$0.328
$1.890
$1.279
4.837
$8.334
$0.328
$1.889
$0.339
5.777
$8.333
$0.327
$1.889
$0.588
5.484
$8.288
$0.323
$1.864
$0.379
5.693
$8.259
$0.321
$1.852
$0.476
5.778
$8.427
$0.770
0.800
$1.570
$0.769
0.800
$1.569
$0.767
0.800
$1.567
$0.757
0.800
$1.557
$0.752
0.000
$0.752
Total Residential
$24.922
$24.857
Total Non-Residential
$32.187
$32.146
Source: State of New Mexico, Department of Finance & Administration
$24.791
$32.116
$25.094
$32.627
$24.256
$31.904
Operational
Debt Service
Total
County
Operational
Debt Service
Total
City
Operational
Debt Service
Total
Schools
Operational
SB-9
ETN
Debt Service
Total
Community College
Operational
Debt Service
Total
21
RBC Capital Markets
11
2/2/16
Your district needs to sell
bonds. Where do we
start?
Method of Sale
§  When deciding on the most appropriate method to sell bonds, a district may consider utilizing either a
“competitive”, “negotiated”, or “private placement” sale as defined below. Legislation was passed in
2013 allowing districts to sell new money general obligation bonds by negotiated sale. It
requires that the bond underwriter be selected pursuant to a Request for Proposal in
accordance with the provisions of the Procurement Code. They may also be sold at a public sale
or privately placed with the State Treasurer, the New Mexico Finance Authority (“NMFA”) or a bank or
broker/dealer.
Competitive Sale
Negotiated Sale
Private Placement
23
•  The district selects a specific date and time to receive bids from underwriting firms to
purchase and sell its bonds, based upon the maturity schedule selected for the bonds.
The winning bidder is the firm offering to purchase the district’s bonds at the lowest
interest rate at the time bids are received.
•  The district selects a single underwriter or a team of underwriting firms through a RFP
process to sell its bonds prior to the actual sale. The underwriter(s) will initially “market”
the district’s bonds to potential investors on a “best efforts” basis, at interest rates
approved by the district’s financial advisor and the district’s administration. Based upon
the orders received, the interest rates will be increased/decreased to reflect prevailing
market conditions and the demand for the bonds in the market and the underwriter(s)
will commit to purchase the district’s bonds at a negotiated, specified price.
•  The district can elect to “privately place” the bonds with the New Mexico State
Treasurer’s Office, the NMFA or bank.
RBC Capital Markets
12
2/2/16
Competitive Sale
General competitive sale considerations:
§  The bond market is stable and demand for the bonds is anticipated to be strong;
§  The district can reasonably expect at least three bids will be received;
§  Structural features and credit quality are conventional;
Advantages:
§  Provides assurance at the time of sale that the bonds were sold at the lowest interest rate, given
prevailing market conditions.
§  Promotes appearance of an open and fair process.
Disadvantages:
§  Less flexibility to match bond sale with optimal market conditions since the date and time of bond sale
must be determined approximately 7-10 days prior to sale.
§  Eliminates the district’s ability to ensure local residents have an opportunity to purchase the bonds.
§  Underwriter(s) may include a “risk premium” in their bids as compensation for the uncertainty of being
able to sell any unsold bonds at the interest rates included with their bid.
§  Limited flexibility to modify financing terms (i.e. optional redemption dates, coupons, etc.) based upon
investor feedback, as financing structure and terms thereof are fixed at time of sale.
RBC Capital Markets
24
Negotiated Sale
General negotiated sale considerations:
§  A complex refunding is being contemplated;
§  Bond market is volatile and the demand for bonds is likely to be weak;
§  Substantial education of investors is required due to unique structural features or credit quality is
below average;
§  Participation from retail investors or local residents is desired.
Advantages:
§  Maximizes the district’s flexibility to sell the bonds during favorable market conditions.
§  Underwriter(s) may engage in more pre-sale marketing activities with potential purchasers to generate
interest in the district’s bonds since they are assured of the opportunity to sell the bonds. This may
translate into a lower interest rate.
§  Maximizes the district’s ability to allow local residents the opportunity to purchase the bonds.
§  Maximizes the district’s flexibility to negotiate financing terms (i.e. optional redemption dates, coupons,
etc.) based upon investor feedback and structure refunding escrow.
Disadvantages:
§  Can potentially result in appearance of favoritism toward underwriter(s) selected.
25
RBC Capital Markets
13
2/2/16
Private Placement with NMFA or Bank
General private placement considerations:
§  Interest rates produce a financing with lower costs than market conditions.
§  Lower rated issues $10 million per year.
§  For bank placement, issues selling less that $10 million per year with fiscal maturities less than 15
years.
Advantages:
§  Interest rates are fixed for a certain time period up to several weeks prior to the Board meeting.
§  In some cases, the district may qualify for NMFA’s Disadvantaged Program which provides up to
$300,000 at 0.10% interest.
§  Offering document is not required.
§  Some costs of issuance are eliminated (i.e. rating, i-Deal, printing of OS and paying agent fees).
§  Some instances notes can be locked up to 45 days in advance
Disadvantages:
§  Political risk of a state or local government entity to review Board’s projects.
§  If audit reports are late or lacking, likelihood of approval is reduced.
§  If financial condition of the district is weak, likelihood of approval is reduced.
26
RBC Capital Markets
What happens after bonds
are sold?
14
2/2/16
Continuing Disclosure Undertaking Requirements
When an issuer sells bonds in the public markets for $1 million and over, the issuer is required
to make certain disclosure requirements annually to update bonds holders and the public,
which is outlined in the Continuing Disclosure Undertaking that the issuer executes prior to closing.
Effective July 1, 2009, the Municipal Securities Rulemaking Board (“MSRB”) received approval from
the Securities and Exchange Commission (“SEC”) to establish a continuing disclosure service which is
called MSRB’s Electronic Municipal Market Access System or (“EMMA”).
• 
EMMA receives electronic submission of continuing disclosure documents and related
information from issuers and/or obligated persons pursuant to Rule 15c2-12 and makes this
information publicly available on the EMMA website at emma.msrb.org.
• 
Continuing disclosure provisions of Rule 15c2-12:
• 
An underwriter for a primary offering of municipal securities subject to the rule is
prohibited from underwriting the offering unless the underwriter has determined that the
issuer has undertaken to provide certain items of information to the marketplace. These
items include:
1.  Annual financial information concerning the issuer;
2.  Audited financial statements;
3.  Notice of certain events, if material; and
4.  Notices of failures to provide annual financial information on or before the date
specified in the written undertaking.
5.  New offering documents must include descriptions of any continuing disclosure
violations in the past five years.
• 
Continuing disclosure documents are made available to the public for the life of the securities.
RBC Capital Markets
28
What needs to be filed?
Generally, all school districts have the same fiscal year information that needs to be filed annually.
Due dates for filing are usually December 31st or March 31st of each year and must be filed for as
longs as bonds are outstanding. The following is a typical list of information required to be filed:
§ 
§ 
§ 
29
Debt & Other Financial Obligations
• 
Net debt
• 
Outstanding debt
• 
Debt service requirements
• 
Direct & overlapping debt
Tax Base
• 
Assessed valuation
• 
History of assessed valuation
• 
Major taxpayers
• 
Tax rates
• 
School tax rates
• 
Tax collections
District Information
• 
Student enrollment
• 
State Equalization Guarantee (“SEG”) payments
• 
Fiscal year audit (or unaudited financials if the audit isn’t available)
RBC Capital Markets
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2/2/16
Flowchart for Identifying Continuing Disclosure Requirements
Source: www.msrb.org
RBC Capital Markets
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Other Material Events That Require Disclosure
Other continuing disclosures provide notification of specific events that may have an effect on
repayment of a bond such as:
•  Principal and interest payment delinquencies
•  Non-payment related defaults
•  Unscheduled draws on debt service reserves reflecting financial difficulties
•  Unscheduled draws on credit enhancements reflecting financial difficulties
•  Substitution of credit or liquidity providers, or their failure to perform
•  Adverse tax opinions or events affecting the tax status of the security
•  Modifications to rights of security holders
•  Bond calls and tender offers
•  Defeasances
•  Release, substitution or sale of property securing repayment of the securities
•  Rating changes
•  Bankruptcy, insolvency or receivership
•  Merger, acquisition or sale of all issuer assets
•  Appointment of successor trustee
31 Source: www.msrb.org
RBC Capital Markets
16
2/2/16
Economy Update
Market Update and Outlook for 2016
US Economic Highlights
•  A long-awaited hike from the Fed caused only minor moves in financial
markets.
•  A gradual tightening cycle is expected to keep longer-term rates at
accommodative levels.
•  Recent data point to US GDP growth slipping below 2% in Q4/15.
•  A renewed downturn in oil prices should provide additional support to the US
economy.
33
Source:
RBC http://www.rbc.com/economics/economic-reports/pdf/financial-markets/cbw.pdf
RBCCapitalMarkets
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2/2/16
Market Update and Outlook for 2016
World Economic Highlights
•  The ECG is likely to sit on the sidelines after easing policy in December 2015
•  UK GDP growth was revised downward in both Q2 and Q3.
•  Despite the RBA’s optimism, we expect further easing in 2016 as activity
disappoints.
•  The RBNZ is expected to stay on the sidelines following 100 basis points of cuts
in 2015.
•  Economic activity in China expected to continue to slow.
•  India economic condition expected to remain relatively level.
•  US dollar expected to continue to strengthen in short term.
34Source:
RBC http://www.rbc.com/economics/economic-reports/pdf/financial-markets/cbw.pdf
RBCCapitalMarkets
Central Bank Near-Term Bias
Three-months out, policy rate
BoC Governor Poloz gave a few hints on monetary policy in a
recent speech but a cautiously optimistic tone seemed to indicate the
Bank is in “wait and see” mode. We expect a steady rate decision on
January 20, 2016.
We expect the Fed will continue its gradual withdrawal of stimulus
with 25 basis point rate hikes each quarter in 2016, a pace that
would be consistent with the latest FOMC projections.
Inflation is expected to jump higher in Q1/16 due to a smaller drag
from energy prices but will accelerate only slightly during the rest
of 2016, thereby putting little pressure on the BoE to tighten policy
despite limited slack in the economy.
Despite failing to impress markets with added stimulus in
December, we expect the ECB will keep policy on hold in the near
term albeit with a more dovish tone than the previous meeting.
We continue to expect easier monetary policy will be required in
2016. Our forecast assumes the RBA’s drawn-out easing cycle will
resume in Q1/16, although the risk is that rates are held steady
early in the year.
The RBNZ cut rates for the fourth time in 2015 in December and
signalled that further easing is unlikely. We expect the cash rate will
be held at its current record low of 2.50% throughout 2016.
35 Source: RBC http://www.rbc.com/economics/economic-reports/pdf/financial-markets/cbw.pdf
RBCCapitalMarkets
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2/2/16
New Mexico Economy Update – Latest Employment Update
• 
New Mexico’s rate of over-the-year job growth, comparing November 2015 with November 2014, was 0.4
percent, representing an increase of 3,000 jobs, 2,700 private sector jobs.
• 
Seasonally adjusted unemployment rate in November 2015 was 6.8% in New Mexico up 0.7% from 2014,
and 5.0% in the U.S down 0.8%. from 2014.
• 
Retail trade posted a gain of 600 jobs, or 0.6%. Wholesale trade was down 800 jobs, or 3.6%.
3.48%
LeisureandHospitality
2.81%
Professional&BusinessServices
Educa;onandHealthServices
2.21%
2.08%
FinancialAc;vi;es
0.63%
RetailTrade
0.36%
TotalNonfarm
0.15%
Government
Construc;on
36
-0.46%
Informa;on
-3.10%
OtherServices
-3.15%
WholesaleTrade
-3.62%
Manufacturing
-3.86%
Trans,Warehousing&U;li;es
-4.40%
Mining&Logging
-10.10%
Source: New Mexico Department of Workforce Solutions
Trans,Warehousing&
U;li;es
3%
Mining&Logging
3%
Manufacturing
3%
WholesaleTrade Informa;on
3%
2%
OtherServices
3%
Government
24%
FinancialAc;vi;es
4%
Construc;on
5%
RetailTrade
11%
Educa;on&Health
Services
16%
Prof.&Business
Leisure&Hospitality
Services
11%
12%
RBC Capital Markets
Oil and Gas Price History
37
Source: US EIA
RBC Capital Markets
19
2/2/16
Natural Gas Volume & Value Comparison 2014 vs. 2015 New Mexico (Total for All Counties)
Natural Gas Volume
2015
95,338,208
89,957,173
99,134,623
97,944,786
100,674,458
97,167,657
102,061,202
102,737,932
100,888,942
102,387,031
988,292,012
% Change
-5.00%
0.15%
-3.20%
-1.70%
-3.17%
-5.19%
-3.64%
-2.50%
0.56%
6.23%
Natural Gas - Volume
120,000,000
100,000,000
80,000,000
MMBTU
2014
100,355,220
89,820,371
102,413,448
99,640,921
103,974,295
102,489,246
105,918,969
105,374,874
100,326,987
96,380,895
97,313,741
96,781,859
1,200,790,826
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
2014
60,000,000
2015
40,000,000
20,000,000
0
Jan
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$700,000,000
% Change
-46.37%
-53.66%
-49.71%
-47.61%
-48.09%
-47.28%
-46.89%
-41.39%
-40.51%
-37.63%
$600,000,000
Value of Production
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
2015
$
297,692,293
269,806,268
296,186,264
277,090,151
279,669,421
278,817,879
285,447,869
289,166,439
285,521,037
275,829,136
$ 2,835,226,758
Mar
Natural Gas - Value of Production
Natural Gas Value
2014
$
555,092,452
582,241,468
588,965,983
528,890,752
538,762,178
528,856,156
537,479,155
493,349,725
479,951,442
442,243,699
416,376,329
396,055,364
$ 6,088,264,704
Feb
$500,000,000
$400,000,000
2014
$300,000,000
2015
$200,000,000
$100,000,000
$0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Year-to-Date Comparison
Jan-14 - Oct-14
Jan-15 - Oct-15
2015 v. 2014
38
Natural Gas Value
5,275,833,010
2,835,226,758
-46.26%
Natural Gas Volume
1,006,695,226
988,292,012
-1.83%
RBC Capital Markets
Source: NM ONGARD
Oil Volume & Value Comparison 2014 vs. 2015 New Mexico (Total for All Counties)
Oil Volume
2015
11,673,789
11,107,669
13,194,894
13,188,740
13,167,596
12,591,553
12,476,908
12,844,901
12,330,832
12,325,689
124,902,571
% Change
18.32%
24.20%
29.13%
29.34%
26.22%
25.83%
12.82%
16.20%
21.42%
7.77%
Oil - Volume
14,000,000
12,000,000
10,000,000
2014
Barrels
2014
9,865,940
8,943,162
10,218,441
10,197,016
10,432,582
10,006,905
11,059,380
11,054,348
10,155,554
11,436,767
10,900,211
11,391,378
125,661,684
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
8,000,000
2015
6,000,000
4,000,000
2,000,000
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Oil - Value of Production
Oil Value
2014
878,261,969
850,124,359
954,386,948
938,172,265
954,008,298
956,299,782
1,033,800,003
935,426,314
810,791,361
848,015,212
736,736,690
619,894,039
$ 10,515,917,240
$
2015
494,483,203
486,703,079
552,962,957
633,974,528
707,638,310
685,390,351
591,984,145
511,086,551
528,265,564
538,309,151
$ 5,730,797,838
$
$1,200,000,000
% Change
-43.70%
-42.75%
-42.06%
-32.42%
-25.82%
-28.33%
-42.74%
-45.36%
-34.85%
-36.52%
$1,000,000,000
Value of Production
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$800,000,000
2014
$600,000,000
2015
$400,000,000
$200,000,000
$0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Year-to-Date Comparison
Jan-14 - Oct-14
Jan-15 - Oct-15
2015 v. 2014
39
Source: NM ONGARD
Oil Value
9,159,286,511
5,730,797,838
-37.43%
Oil Volume
103,370,095
124,902,571
20.83%
RBC Capital Markets
20
2/2/16
Questions??
RBC Capital Markets
40
RBC Capital Markets – Albuquerque Staff
Paul Cassidy
Managing Director
Municipal Finance Department
RBC Capital Markets, LLC
6301 Uptown Blvd NE
Suite 110
Albuquerque, NM 87110
41
Tel: (505) 872-5991
Fax: (505) 872-5979
Cell: 505-321-5966
[email protected]
Erik Harrigan
Director
Municipal Finance Department
RBC Capital Markets, LLC
6301 Uptow n Blvd NE
Suite 110
Albuquerque, NM 87110
Tel: (505) 872-5992
Fax: (505) 872-5979
Cell: 505-850-9561
[email protected]
Andrew Stricklin
Associate
Municipal Finance Department
Regina Gaysina
Associate
Municipal Finance Department
RBC Capital Markets, LLC
6301 Uptow n Blvd NE
Tel: (505) 872-5996
Suite 110
Fax: (505) 872-5979
Albuquerque, NM 87110
Cell: 505-503-0949
andrew [email protected]
RBC Capital Markets, LLC
6301 Uptow n Blvd NE
Tel: (505) 872-5993
Suite 110
Fax: (505) 872-5979
Albuquerque, NM 87110
Cell: 505-205-5552
[email protected]
RBC Capital Markets
21