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New Issue Ratings: Moody’s: Aaa (Underlying Aa3) Book-Entry Only Standard & Poor’s: AAA (Underlying A) In the opinion of Bond Counsel, under existing federal law and assuming compliance with applicable requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issue date of the Bonds, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. However, while interest on the Bonds also is not an item of tax preference for purposes of the alternative minimum tax applicable to corporations, interest on the Bonds received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations, interest on the Bonds received by certain S corporations may be subject to tax, and interest on the Bonds received by foreign corporations with United States branches may be subject to a foreign branch profits tax. Receipt of interest on the Bonds may have other federal tax consequences for certain taxpayers. See “Tax Exemption” and “Certain Other Federal Tax Consequences” under “Legal and Tax Information” herein. $251,850,000 THE CITY OF SEATTLE, WASHINGTON MUNICIPAL LIGHT AND POWER IMPROVEMENT AND REFUNDING REVENUE BONDS, 2003 Dated: Date of Initial Delivery Due: November 1, as shown on inside cover The Bonds will be issued as fully registered bonds under a book-entry only system, registered in the name of Cede and Co. as registered owner and nominee for DTC. DTC will act as initial securities depository for the Bonds. Individual purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interests in the Bonds. Interest on the Bonds will be paid semiannually on each May 1 and November 1, beginning November 1, 2003. The principal of and interest on the Bonds are payable by the Bond Registrar (currently, The Bank of New York in New York, New York) to DTC, which in turn is obligated to remit such payments to its participants for subsequent disbursement to beneficial owners of the Bonds, as described in “Description of the Bonds—Book- Entry Transfer System” and in Appendix E. MATURITY SCHEDULE LOCATED ON INSIDE COVER The Bonds are being issued to (i) finance certain capital improvements to and conservation programs for the Light System, (ii) refund certain of the City’s Outstanding Parity Bonds, and (iii) to pay the costs of issuance of the Bonds. See “Plan of Finance.” The Bonds are subject to optional and mandatory redemption prior to maturity as described herein. See “Description of the Bonds—Redemption of the Bonds.” The Bonds are special limited obligations of the City payable from and secured solely by the Gross Revenues of the Light System and by money in the Parity Bond Fund and the Reserve Fund. The Bonds will be issued on a parity with $1,309,961,000 of Outstanding Parity Bonds, of which $118,895,000 will be refunded by the Bonds, and any Future Parity Bonds. The Gross Revenues are pledged to make the required payments into the Parity Bond Fund and the Reserve Fund; this pledge is superior to all other charges upon the Gross Revenues except for reasonable charges for maintenance and operation of the Light System. Maintenance and operation charges include the unconditional obligation of the City to make payments under certain power purchase contracts, as more fully described in “Power Resources—Purchased Power Arrangements.” See “Security for the Bonds.” The Bonds do not constitute general obligations of the City, the State of Washington or any political subdivision of the State, or a charge upon any general fund or upon any money or other property of the City, the State or any political subdivision of the State not specifically pledged thereto by the Bond Ordinance. Neither the full faith and credit nor the taxing power of the City, nor any revenues of the City derived from sources other than the Light System, are pledged to the payment of the Bonds. The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by Financial Security Assurance Inc. See “Other Bond Information—Municipal Bond Insurance.” The Bonds are offered for delivery when, as and if issued, subject to the approving legal opinion of Foster Pepper & Shefelman PLLC, Seattle, Washington, Bond Counsel, and certain other conditions. The form of Bond Counsel’s opinion is attached hereto as Appendix B. It is expected that the Bonds will be available for delivery at the facilities of DTC in New York, New York, or to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer on or about August 20, 2003. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Dated: July 29, 2003 $251,850,000 THE CITY OF SEATTLE, WASHINGTON MUNICIPAL LIGHT AND POWER IMPROVEMENT AND REFUNDING REVENUE BONDS, 2003 SERIAL BONDS Due Interest November 1 Amounts Rates Yields CUSIP Numbers 2004 $ 9,915,000 6.00% 1.13% 8126427R1 2005 24,525,000 4.00 1.69 8126427S9 2006 22,745,000 5.00 2.00 8126427T7 2007 23,820,000 5.00 2.45 8126427U4 2008 11,875,000 5.00 2.80 8126427V2 2009 12,155,000 5.00 3.13 8126427W0 2010 12,770,000 5.00 3.55 8126427X8 2011 4,000,000 5.00 3.73 8126427Y6 2012 4,200,000 5.00 3.90 8126427Z3 2013 4,410,000 5.00 4.03 8126428A7 2014 4,630,000 5.25 4.15* 8126428B5 2015 9,545,000 5.25 4.25* 8126428C3 2016 10,045,000 5.25 4.35* 8126428D1 2017 10,570,000 5.25 4.45* 8126428E9 2018 11,125,000 5.25 4.54* 8126428F6 2019 5,980,000 5.25 4.61* 8126428G4 2020 6,295,000 5.25 4.70* 8126428H2 2021 6,625,000 5.00 4.90* 8126428J8 2022 6,955,000 5.00 4.96* 8126428K5 2023 7,300,000 5.00 5.01 8126428L3 2024 7,665,000 5.00 5.06 8126428M1 2025 8,050,000 5.00 5.09 8126428N9 TERM BONDS 2028 26,650,000 5.00% 5.07% 8126428P4 * Priced to the November 1, 2013, par call date. THE CITY OF SEATTLE CITY OFFICIALS AND CONSULTANTS MAYOR AND CITY COUNCIL Greg Nickels Mayor Peter Steinbrueck President, City Council Jim Compton Council Member Richard Conlin Council Member Jan Drago Council Member Nick Licata Council Member Richard McIver Council Member Judy Nicastro Council Member Margaret Pageler Council Member Heidi Wills Council Member SEATTLE CITY LIGHT DEPARTMENT James P. Ritch Acting Superintendent Jesse A. Krail, P.E. Deputy Superintendent, Distribution Dana L. Backiel Deputy Superintendent, Generation Carol K. Everson Acting Deputy Superintendent, Finance and Administration Joan Walters Deputy Superintendent, Customer Services Mike Sinowitz Deputy Superintendent, Power Management CITY ADMINISTRATION Dwight D. Dively Director of Finance Thomas A. Carr City Attorney BOND COUNSEL Foster Pepper & Shefelman PLLC Seattle, Washington FINANCIAL ADVISOR Seattle-Northwest Securities Corporation Seattle, Washington i No dealer, broker, salesperson, or other person has been authorized by the City to give any information or to make any representations, other than as 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 the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the Bonds, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such persons to make such offer, solicitation or sale. The information set forth herein has been furnished by the City, DTC and certain other sources that are believed to be reliable. The information and expressions of opinion contained herein are subject to change without notice. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact or representations that the estimates will be realized. Other than with respect to information concerning Financial Security Assurance Inc. (“Financial Security”) contained under the caption “Bond Insurance” and Appendix F—Specimen Municipal Bond Insurance Policy herein, none of the information in this Official Statement has been supplied or verified by Financial Security and Financial Security makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information, (ii) the validity of the Bonds, or (iii) the tax exempt status of the interest on the Bonds. 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 since the date hereof. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. The Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon a specific exemption contained in such act, nor have they been registered under the securities laws of any state. ii TABLE OF CONTENTS Page INTRODUCTION............................................................................................................................................................ 1 PLAN OF FINANCE ........................................................................................................................................................ 1 The Bonds .................................................................................................................................................................. 1 Refunding Plan..........................................................................................................................................................