$1.5 m Permanent Trust Fund not collateral

Greetings Relatives/Frens,
It’s now 3:22 pm and Naabi has not reached a quorum.
It’s now #:31 pm and no quorum.
Quorum Reached at 4:02 pm: Delegates answering roll call are LoRenzo Bates, Nelson BeGaye, Katherine Benally, Leonard Tsosie, David Tom, Alton Shepherd, Duane Tsingine, Russell Begaye, Dwight Witherspoon, Joshua Butler, and Walter Phelps.
Naabi Committee meeting and debating proposed $220 million bond.

Mr. Goe could you answer questions that were raised before lunch recess.

Due diligence checklist handed out for LImited Operating document which is discloure documents distributed to investors. Navajo Nation being singled out with special requirements? No. Applies to all transactions involving securities such as school districts, corporations, tribal govts. This applies to all and basic standard of fedral securities and there must be no omission of any info to investors investing in Navajo nation bonds. And once investors buy, then investors must continue receiving discloure document.

Offering doc has not been completed. If positive vote today and proceed with Bond issue, we want you as members of governing body to have doc and comment on befroe go to investors cuz Nn name on line and potential liability on line. As advisors to nation, we want doc to be accurate.

As you can see from this doc, it talks about govt, tribal entrprise, history of nation, plan of finance-bond issue going to investor and draw down bonds as discused this morning, terms of bond, interest rates, payment schedule, nation’s right to prepay/redemn bond, also security for bonds and key point. Obligation of unsecured general obligations whichis promise of nation to pay on time and it’s basically from general fund of nation. And see later in handout whichis resolution of Council adopted for KayBank loan term sheet and it specifically excluds permanet fund and all trust fund. there are a long list of exclusions and we are recommending amendment to this legislation to make it very expreesed so no basis for nay court to have any ambiguity over what is pledged and not pledged.

this is unsecrured. basically nation manage afairs and make payment when due. that brings me to another key point-what law govern. TWo parts to Bond issue and referring to bond offered to institutional investors and drawdown bonds which involves banks.

Standards and Poors adopted blanket plicy with respect to all tribal bond issue it will not rate bond issues unless governed by state courts. This bond talks of NY courts and key element of that which is impt is that first amendment, in section 7, look at last paragrph: when it comes to and true general obligation bond and GEO bonds under NY “except” that issueance of general bonds and GEO bond documents and governed by Navajo laws and applicable federal laws.

Key point: what thse bonds are governed by and NY courts looking to Navajo law so not wholesale giving up sovereignty. that portion of NY law investors care about is contract, interpreting terms of contrct cuz for so many yrs in financial markets, the NY cvourts use to dealing with financial transactions and investors know can rely on fairness of NY courts. but on authoirity to issue bonds is by Navajo law.

On Disclosure: we are so blessed to serve as bond cousel to nation for over 20 yrs and also to state and local govts. I can tell you that our state clients, school district clients, spend tremendous amt of time and effort on discloure and are very careful in proceeding with Bond.

You are not being singled out and asked to do what others asked to do. We also serve other tribes and to date, all those transactions governed by state law and state courts regarding offerings to investors.

If u wnat to get best terms, lowest interest, access to capital markets – rules of road apply to other tribes, state and local govts.

again i totally agree with Delegate Tsosie comments regarding impt decisons must be made by Council. AS an advisor, the tribe is a great shining example of leadership for all tribal nations and shud have flexibility in right circumstances to access institutional capital market and huge step. and another rason for that, as Mr. Tsosie said, not rely on banks and pay back in five years or soooner. by accessing institutional market, yes you agree to abide by NY law and NY courts, but access to instituioal markets and you can reply over 20-25 yrs. I know things are tight with genral fund and to spread over years is policy decision for nation but give financial flexibility and decide in best interst of nation.

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