JP Morgan Chase Bank is targeted to finance $210 million worth of Miami-Dade County electric bus purchases.

County consultant PFM Financial Advisors recommended that the county deal with JP Morgan Chase over the other two proposers for the contract, Bank of America and Morgan Stanley.

At stake is the financing of 133 buses, including 33 40-foot battery operated buses and charging systems that the county has already received to replace aged diesel buses and 100 60-foot electric buses and charging systems for the South Dade Bus Rapid Transit Corridor that is now scheduled to go on line next year.

JP Morgan Chase is offering an initial indicative interest rate of 4.06% for a 12-year term. County documents say the transit master bus lease with the bank “will allow the county to access the funds through issuance of multiple leases…. There are no fees associated with the committed but unissued lease amount.”

The bank, the county says, “is providing an upfront escrow structure where they would fund the county’s requested draws to an escrow, and the county can draw from the escrow upon requisition from the county and delivery of the buses and optional components.”

The county says it expects the first lease schedule to reimburse $62 million in past bus purchases and fund new purchases. Another subsequent schedule would be for up to $148 million.

The county would make lease payments Jan. 1 and July 1 each year, with the first payment due Jan. 1, 2025.

PFM Financial Advisors issued for the county a competitive solicitation to the banking and financial industry on Feb. 6 and on March 1 it received the three proposals. The firm, according to a county memo, said that JP Morgan Chase “conformed to the requirements of the solicitation with the most favorable financial rate, terms and conditions. Other proposals either did not provide the security and financing structure requested and included higher cost of issuance fees to be paid from leased proceeds.”

According to PFM Financial Advisors, Bank of America and JP Morgan “both provided a master lease structure, where the lending institution would fund and control the county’s immediate needs at the outset and distribute the balance of the funding upon requisition from the county and delivery of the equipment. Morgan Stanley provided the county with option of direct purchase of bonds.”

In the master lease structure, the method of calculating interest is determined in advance and the rates would be calculated when the county was ready to make a draw upon the funds.

The larger buses to be funded are to operate on the South Dade Transitway, the first of the six proposed Smart Program rapid transit additions to the county that were promised in 2016.