City of Madison Community Bonds – Informational Presentation

March 5, 2020

Welcome to the investor presentation for the
City of Madison, Wisconsin and its proposed issuance of the General Obligation Promissory Notes,
Series 2018-D, Community Bonds. I’m Pitichoke Chulapamornsri, the Director
of Business Development at Neighborly Securities, the sole under-writer for this issuance. Before we begin, I would like to direct your
attention to the disclaimer statement on page two. I wouldn’t read everything on this page, but
please note that the information presented is for informational purposes only, and is
not part of the Preliminary Official Statement or the Final Official Statement. Any investment decisions regarding the community
bonds should only be made after careful review of the complete Preliminary Official Statement,
which can be found on the Neighborly website, and we link to it later in this presentation
as well. Materials and statements contained in this
presentation does not constitute an offer to sell or the solicitation of an offer to
buy any securities. For this presentation, I will be joined by
my collegue, Mr. Dan Kupratis, the Director of Capital Markets at Neighborly Securities,
and Mr. David Schmiedicke, Finance Director of the City of Madison. Now I will hand it off to Mr. Schmiedicke,
who will present the overview of the community bonds program. The City of Madison is working with Neighborly
Securities to offer Madison residents the opportunity to invest in Madison community
bonds. The proceeds will help finance the renovation
and expansion of the Olbrich Botanical Gardens, including a new learning center, and a larger,
more environmentally-friendly greenhouse. Just like a traditional municipal bond, buying
a community bond means that you are loaning money to the City or a public agency for an
agreed upon period of time, receive interest on your investment, and then are repaid the
full value of your loan when the bonds mature. The only distinction with this program is
that you can purchase these bonds for as little as $500, compared with the traditional $5,000
increments with our normal bond sales. The order period for the bonds is expected
to start on October 3, 2018 at 1:00 pm central time, and to end on October 9, 2018 at 1:00
pm central. But of course, orders are subject to availability. The interest rate will be determined at the
opening of the order period on October 3, 2018. As I noted before, the minimum order size
is $500, and there is no maximum. Community bonds will be allotted and filled
on a first-come, first-served basis on orders of $50,000 or less. The next two slides provide a brief summary
of the 2018 Madison community bonds. We expect to issue $2.1 million worth of bonds. The issuance contains maturities from October
2019 through October 2028, with $210,000 of community bonds available in each maturity. The order priority is: City of Madison residents,
Dane County residents, State of Wisconsin residents, and national investors. Interest payments to bond holders are made
semi-annually on April 1 and October 1, commencing on April 1, 2019. As the security, the City legally pledges
that it will use part of the property taxes it collects to make the payments of interest
and principal on these notes, and that there is no limit on the City’s ability to raise
such taxes if necessary. Starting with the fall of 2018, every year
the City will collect enough to pay the interest due the following April, and the interest
and principal due the following October. The exact legal language about this is in
the Preliminary Official Statement. Credit ratings on these bonds will be determined
on October 3, but it’s helpful to know that prior issuances from the City of Madison have
been rated triple-A by Moody’s Investor Service. The interest on these bonds is exempt from
federal income taxes, but not exempt from Wisconsin State income taxes. The data date, which is when you will start
to accrue interest, and the delivery date, which is when the bonds will be delivered
to your account, is expected to be November 7, 2018. For further information, please see the Preliminary
Official Statement, which is available at the link shown on the bottom of slide 9. And now I’ll hand it over to Dan from Neighborly,
who can share more details about how the order process works. On page 10, we provide a brief summary of
the financing schedule for this issuance. As Dave mentioned, the interest rate is expected
to be determined on October 3, and the order period is expected to open on the same day,
at 1:00 pm central time. The order period is expected to close on Tuesday,
October 9, subject to availability. As mentioned on the previous page, the transaction
is expected to close on November 7, which means that this is when the bonds will be
delivered to your account. Finally, before the order period opens, the
City will host two information sessions, to answer any questions about the process. Representatives from the City and Neighborly
Securities will be present to answer any questions about the community bonds and help with the
signup process. The first meeting will be on Tuesday, September
25 at the Olbrich Botanical Gardens at 6:00 pm. The second meeting will be on Wednesday, October
3 at the Warner Park Community Recreation Center. Individuals who are interested in buying the
2018 community bonds need to create an account and can do so at neighborly dot com slash
madison. Once the bonds have settled, you will be able
to move them into an existing brokerage account if that works better for you. However, fees may apply. Please contact us at support at neighborly
dot com if you would like to utilize this option. Once an order is submitted on neighborly dot
com, Neighborly’s investment team will review it for approval and allocation. After the information is vetted and the order
is approved, community bonds will be allotted and filled on a first-come, first-served basis,
subject to certain limitations mentioned earlier in this presentation. For questions about setting up an account
with Neighborly, to purchase 2018 Madison community bonds, or other inquiries, please
contact Neighborly at 866 432 1170, or email us at support at neighborly dot com. Thank you very much, and we look forward to
your participation on the 2018 Madison community bonds transaction.

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