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BALSIS: Did you approach anybody outside the state?
<br />OKUMOTO: Well, the financial advisor did.
<br />BALSIS: Okay.
<br />OKUMOTO: But they didn't offer a private placement program. They were offering all
<br />these various types of interim financing, and that's why with his expertise, he can
<br />compare more or less the apples and oranges kind of comparison. And just based on
<br />price alone, Bank of Hawai `i was the best alternative. One of the things for me was just
<br />the cost of administration, because Bank of Hawai `i just - -they didn't require us to buy- -
<br />they weren't required to buy rated paper. They would just take our paper as it is,
<br />because they were so familiar with us and they bought bonds in the past. They're the
<br />largest, our largest bondholder. So that alone already, because if you go through a
<br />rated process, you've got to go make presentations to all the rating agencies. You've got
<br />to fly up to San Francisco, you've got to prepare this rating presentation, you have to
<br />prepare a prospectus. But with Bank of Hawai `i, they said no, you don't have to do that.
<br />You guys are good. So just based on the cost, and also the lesser requirements that it
<br />was good enough for them, that - -these were two big points for me. And we've talked to
<br />other underwriters, and we say we have this facility with Bank of Hawai `i, and they said
<br />well, you got a good deal there. So we have not only our independent financial advisors,
<br />but other underwriters who —they deal with this, this is their business. They said we have
<br />a good facility.
<br />BALSIS: The issue here is did you give Bank of Hawai `i favoritism. And I guess if
<br />you're just looking at setting up the facility and your ability to go out and shop it around,
<br />the answer in my mind would be to say no. However, the question was brought up
<br />about and you addressed it rating the facility, getting it rated by Moody's, and it was
<br />not because it is private placement, correct?
<br />OKUMOTO: That's correct.
<br />BALSIS: Is there a legal opinion that you had received, saying that oh, you do not have
<br />to have this facility rated? Or how did you come across the idea that you did not have to
<br />have it rated? Just out of curiosity. I mean, one person's saying it has to be rated, and
<br />you're saying not. Is there a legal opinion
<br />OKUMOTO: - -Well, that's up to the purchaser. All the other facilities, the purchaser
<br />requires a rating. But back in 2004, we were doing an improvement district, and that
<br />required tax - exempt financing, but we got it from USDA, so it's like sole source, no
<br />underwriter involved. The only problem was that when we put the contract out for bid, it
<br />went over the amount, so USDA said okay, we'll cover it, but then they only could do a
<br />loan for only so much. So we were kind of like, oh, is this deal going to fall apart or
<br />what? So we were talking to Bank of Hawai `i, just talking about our problems and stuff.
<br />He says well, you know, if you really get into a pinch, we '11 just buy it and we '11 just put it
<br />into our portfolio. So that was like a private placement , they're buying it and
<br />using it either for their mutual funds or for their wealthy clients, or just buying it for the
<br />bank's portfolio. But regardless, they were able to absorb the paper. So when we got
<br />I
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