Series 2010B Taxable Revenue Bonds
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OFFICIAL STATEMENT Dated November 10, 2010 Ratings: Fitch: “AA+” Moody’s: “Aa1” S&P: “AA” NEW ISSUE – Book-Entry-Only See (“RATINGS” herein) Interest on the Bonds (defined below) is not excludable from gross income under section 103 of the Internal Revenue Code of 1986, as amended, for federal income tax purposes. (See “FEDERAL INCOME TAX TREATMENT OF THE BONDS” herein.) $110,000,000 CITY OF SAN ANTONIO, TEXAS (A political subdivision of the State of Texas located primarily in Bexar County) WATER SYSTEM REVENUE BONDS, TAXABLE SERIES 2010B (DIRECT SUBSIDY – BUILD AMERICA BONDS) Dated Date: November 15, 2010 Due: May 15, as shown on inside cover Interest to Accrue from Date of Delivery GENERAL . The City of San Antonio, Texas (the “City”), acting on behalf and for the benefit of the San Antonio Water System (“SAWS"), is issuing its $110,000,000 Water System Revenue Bonds, Taxable Series 2010B (Direct Subsidy – Build America Bonds) (the “Bonds”) pursuant to the general laws of the State of Texas, including particularly Chapters 1371 and 1502, as amended, Texas Government Code, the City’s Home Rule Charter, and an ordinance (the “Ordinance”) adopted by the City Council of the City (the “City Council”) on October 21, 2010. As permitted by Chapter 1371, as amended, Texas Government Code, the City Council, in the Ordinance, delegated to certain authorized officials of the City and SAWS the authority to establish final terms of sale of the Bonds, which final sales terms of the Bonds are evidenced in an Approval Certificate relating to the Bonds. This Approval Certificate was executed by an authorized City official on November 10, 2010. PAYMENT TERMS . Interest on the Bonds will accrue from their date of initial delivery to the initial purchasers thereof named below (the "Underwriters"), and will be payable until stated maturity or prior redemption on May 15 and November 15 of each year, commencing May 15, 2011, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company, New York, New York (“DTC”), acting as a securities depository (the “Securities Depository”), pursuant to the Book-Entry-Only System described herein. The City reserves the right to discontinue the use of the Securities Depository. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. (See “THE BONDS – Book-Entry-Only System” herein.) The initial Paying Agent/Registrar is U.S. Bank National Association, Dallas, Texas. (See “THE BONDS – Paying Agent/Registrar” herein.) SECURITY . The Bonds are special obligations of the City, payable, both as to principal and interest, solely from and secured by, together with the currently outstanding Previously Issued Senior Lien Obligations (as defined in the Ordinance), a first lien on and pledge of the Pledged Revenues (as defined herein), being (primarily) a first lien on and pledge of the net revenues of the City’s combined water and wastewater system (the “System”). The City has not covenanted or obligated itself to pay the Bonds from monies raised or to be raised from taxation. (See “THE BONDS – Security and Source of Payment” herein.) In the Ordinance, the City has authorized the SAWS Board of Trustees (the “Board”) to manage, operate, and maintain the System. PURPOSE . Proceeds from the sale of the Bonds will be used to (1) provide funds for the purposes of acquiring, purchasing, constructing, improving, renovating, enlarging, and equipping the System, and (2) pay the costs of their issuance. ____________________________________________ CUSIP PREFIX: 79642B MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on Inside Cover Page LEGALITY . The Bonds are offered for delivery when, as and if issued and received by the Underwriters, and subject to the approving opinion of the Attorney General of Texas and the approval of certain legal matters by Fulbright & Jaworski L.L.P., San Antonio, Texas and Escamilla, Poneck & Cruz, LLP, San Antonio, Texas, Co-Bond Counsel. (See “APPENDIX E, FORMS OF CO-BOND COUNSEL’S OPINIONS” herein.) Certain legal matters will be passed upon for the City by the City Attorney, for the Board by Bracewell & Giuliani LLP, San Antonio, Texas, and for the Underwriters by Shelton & Valadez, P.C., San Antonio, Texas, Counsel for the Underwriters. DELIVERY . It is expected that the Bonds will be available for initial delivery through the services of DTC on or about Tuesday, November 23, 2010. SIEBERT BRANDFORD SHANK & CO., L.L.C. STIFEL, NICOLAUS & COMPANY, INCORPORATED COASTAL SECURITIES, INC. DUNCAN-WILLIAMS, INC. SOUTHWESTERN CAPITAL MARKETS, INC. (1) MATURITY SCHEDULE CUSIP NO. PREFIX : 79642B $25,825,000 Serial Bonds Stated Stated Principal M aturity Interest Initial CUSIP No. Principal M aturity Interest Initial CUSIP No. Amount (May 15) Rate Yield Suffix(1) Amount (May 15) Rate Yield Suffix(1) $ 1,635,000 2012 1.109% 1.109% LM3$ 1,830,000 2019 3.820% 3.820% LD3 1,645,000 2013 1.457% 1.457% LN1 1,880,000 2020 3.970% 3.970% LE1 1,665,000 2014 1.933% 1.933% LP6 1,930,000 2021 4.170% 4.170% LF8 1,685,000 2015 2.233% 2.233% LQ4 1,985,000 2022 4.370% 4.370% LG6 1,715,000 2016 2.756% 2.756% LR2 2,040,000 2023 4.620% 4.620% LH4 1,750,000 2017 3.106% 3.106% LB7 2,105,000 2024 4.920% 4.920% LJ0 1,785,000 2018 3.670% 3.670% LC5 2,175,000 2025 5.120% 5.120% LK7 $84,175,000 Term Bonds $17,875,000 Term Bond Due May 15, 2032 @ 6.170% Priced to Yield 6.170% - CUSIP No. Suffix(1) LS0 $36,550,000 Term Bond Due May 15, 2034 @ 6.220% Priced to Yield 6.220% - CUSIP No. Suffix(1) LT8 $29,750,000 Term Bond Due May 15, 2040 @ 5.920% Priced to Yield 5.920% - CUSIP No. Suffix(1) LL5 (Interest accrues from the date of delivery) REDEMPTION . The Bonds are subject to redemption prior to stated maturity, at the times and prices and in the amounts described herein. See "THE BONDS – Redemption" herein. ________________ (1) The CUSIP number is included solely for the convenience of owners of the Bonds. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the City, the Board, the Co-Financial Advisors, nor the Underwriters is responsible for the selection or correctness of the CUSIP number set forth herein. [The remainder of this page intentionally left blank] 2 USE OF INFORMATION This Official Statement, which includes the cover page and the Appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale. No dealer, broker, salesperson or other person has been authorized by the City, the Co-Financial Advisors, or the Underwriters to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. The information set forth herein has been obtained from the City and other sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as a representation, promise or guarantee of the Co- Financial Advisors or the Underwriters. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions, or that they will be realized. The information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City (including the System) or other matters described. THE BONDS ARE EXEMPT FROM REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH. THE REGISTRATION, QUALIFICATION, OR EXEMPTION FOR THE BONDS IN ACCORDANCE WITH APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTIONS IN WHICH THE BONDS HAVE BEEN REGISTERED, QUALIFIED, OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION FOR THE PURCHASE THEREOF. THE UNDERWRITERS HAVE PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT. THE UNDERWRITERS HAVE REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, THEIR RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITERS DO NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE THE MARKET PRICE OF THE ISSUE AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.