PUBLIC HOSPITAL DISTRICT NO. 1 SKAGIT COUNTY, WASHINGTON (Skagit Regional Health)
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PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 7, 2016 New Issue Moody’s Rating: Baa2 Book-Entry Only (See “OTHER BOND INFORMATION— Rating”) In the opinion of Foster Pepper PLLC, Seattle, Washington (“Bond Counsel”), under existing federal law and, assuming compliance by the District with applicable requirements of the Internal Revenue Code of 1986, as amended (the “Code”), 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 MATTERS.” PUBLIC HOSPITAL DISTRICT NO. 1 SKAGIT COUNTY, WASHINGTON (Skagit Regional Health) $61,105,000* HOSPITAL REVENUE IMPROVEMENT AND REFUNDING BONDS, 2016 DATED: Date of Initial Delivery (estimated to be November 3, 2016) DUE: December 1, as shown on the inside cover Public Hospital District No. 1, Skagit County, Washington (Skagit Regional Health) (the “District”), provides this official statement in connection with the issuance of its Hospital Revenue Improvement and Refunding Bonds, 2016 (the “Bonds”). The Bonds will be issued as fully registered bonds under a book-entry only system, initially registered to Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York, which will act as initial securities depository for the Bonds. Individual purchases of the Bonds will be made in book-entry form only in the principal amount of $5,000, or integral multiples thereof within a single maturity. The owners of any beneficial interest in the Bonds (the “Beneficial Owners”) will not receive certificates representing their interest in the Bonds as long as the Bonds are in book-entry only form. The Bonds will bear interest payable semiannually on each June 1 and December 1, beginning on December 1, 2016, to the maturity or prior redemption of the Bonds. The Bonds will mature on the dates and in the amounts and bear interest at the rates set forth on the inside cover. The principal of and interest on the Bonds are payable by the fiscal agent of the State of Washington, currently U.S. Bank National Association (the “Bond Registrar”). For so long as the Bonds are held by DTC in book-entry only form, the Bond Registrar will make such payments only to DTC, which, in turn, is obligated to remit such principal and interest to the DTC participants for subsequent disbursement to the Beneficial Owners. See “THE BONDS— Registration and Bond Registrar” and Appendix E—“BOOK-ENTRY ONLY SYSTEM.” The Bonds are subject to redemption prior to their stated maturity dates. See “THE BONDS—Redemption of the Bonds.” MATURITY SCHEDULE ON INSIDE COVER The Bonds are being issued to finance the construction, furnishing and equipping of health care facilities; to carry out the refunding of certain of the District’s outstanding revenue obligations; to make a deposit to the Reserve Account and to pay the administrative costs of such refunding and the costs of issuance of the Bonds. See “USE OF PROCEEDS” herein. The Bonds are special limited obligations of the District, payable solely from the Pledged Revenue and the money in certain funds and accounts described herein on a parity with the District’s outstanding Parity Bonds and any Future Parity Bonds as defined herein. The District has not pledged and has no obligation to levy any taxes or to appropriate any tax proceeds for the payment of the Bonds. See “SOURCES OF PAYMENT AND SECURITY” herein. THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE DISTRICT, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT, SKAGIT COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. The Bonds are offered by Piper Jaffray & Co. (the “Underwriter”) when, as and if issued by the District, subject to the final approving legal opinion of Bond Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Pacifica Law Group LLP, Seattle, Washington. It is expected that the Bonds will be available for delivery to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer on or about November 3, 2016 (the “Date of Initial Delivery”). 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 _______, 2016 This Preliminary Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to Under no circumstances shall this Preliminary to sell or the solicitation of an offer Official Statement constitute an offer This Preliminary herein are subject to completion and amendment. contained and the information Official Statement prior of such jurisdiction. or qualification under the securities to registration be unlawful laws solicitation or sale would jurisdiction sale of these Bonds in any in which such offer, nor shall there be any buy, * Preliminary, subject to change. MATURITY SCHEDULE PUBLIC HOSPITAL DISTRICT NO. 1 SKAGIT COUNTY, WASHINGTON (Skagit Regional Health) $61,105,000* HOSPITAL REVENUE IMPROVEMENT AND REFUNDING BONDS, 2016 $_______* Serial Bonds Maturity Dates Principal Interest (December 1)* Amounts* Rates Yields CUSIP Nos.** $_________* Term Bonds Due on December 1, 20__* – Interest Rate ____% – Yield: ____% – CUSIP No.**: ___________ $_________* Term Bonds Due on December 1, 20__* – Interest Rate ____% – Yield: ____% – CUSIP No.**: ___________ $_________* Term Bonds Due on December 1, 20__* – Interest Rate ____% – Yield: ____% – CUSIP No.**: ___________ * Preliminary, subject to change. Amounts to be added to the final Official Statement. ** CUSIP® is a registered trademark of the American Bankers Association. The CUSIP data herein is provided by CUSIP Global Services, managed on behalf of the American Bankers Association by S&P Global Ratings. The CUSIP numbers are not intended to create a database and do not serve in any way as a substitute for CUSIP service. CUSIP numbers have been assigned by an independent company not affiliated with the District and are provided solely for convenience and reference. The CUSIP numbers for a specific maturity are subject to change after the issuance of the Bonds. Neither the District nor the Underwriter takes responsibility for the accuracy of the CUSIP numbers. PUBLIC HOSPITAL DISTRICT NO. 1 SKAGIT COUNTY, WASHINGTON (Skagit Regional Health) 1415 E. Kincaid Street Mount Vernon, Washington 98273 (360) 424-4111 Webpage: http://www.skagitvalleyhospital.org* Board of Commissioners James L. Hobbs President and Commissioners Bruce Lisser Secretary and Commissioner Peter Browning Commissioner Alan Dennis Commissioner Jeffrey Miller Commissioner Stanton C.G. Olson Commissioner Clark D. Todd Commissioner Administration Mike Liepman Superintendent, President and Chief Executive Officer Tom Litaker Regional Vice President and Chief Financial Officer Connie Davis Regional Vice President Quality and Population Health Roxanne Olason Regional Vice President and Chief Nurse Executive Skagit Valley Hospital Michelle Sand Vice President and Chief Nursing Officer Cascade Valley Hospital Deborah Martin Regional Vice President Human Resources John Dwight Regional Vice President and Chief Information Officer Jola Barnett Vice President of Operations Cascade Valley Hospital Certain Skagit County Officials Dave Thomas Assessor Katie Jungquist Treasurer Bond Counsel Paying Agent Underwriter Foster Pepper PLLC U.S. Bank National Association Piper Jaffray & Co. Seattle, Washington Seattle, Washington Seattle, Washington * The District’s website is not part of this Official Statement and investors should not rely on information presented in the District’s website in determining whether to purchase the Bonds. This inactive textual reference to the District’s website is not a hyperlink and does not incorporate the District’s website by reference. -i- No dealer, broker, salesman, underwriter or other person has been authorized by the District or the Underwriter to give any information or to make any representations with respect to the Bonds 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 the District or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information in this Official Statement has been obtained