City of Winston-Salem, North Carolina
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PRELIMINARY OFFICIAL STATEMENT DATED MARCH 9, 2016 NEW ISSUE RATINGS: S&P: AAA FULL BOOK-ENTRY - ONLY Moody’s: Aa1 Fitch: AA+ (See “MISCELLANEOUS – Ratings” herein) In the opinion of Parker Poe Adams & Bernstein LLP, Bond Counsel, under existing law (1) assuming compliance by the City with certain requirements of the Internal Revenue Code of 1986, as amended (the “Code”), interest on the 2016A Bonds (a) is excludable from gross income for federal income tax purposes and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, (2) interest on the 2016B Bonds is taxable as ordinary income for federal income tax purposes, and (3) interest on the 2016 Bonds is exempt from State of North Carolina income taxation. See “TAX TREATMENT” herein. $129,735,000* CITY OF WINSTON-SALEM, NORTH CAROLINA $118,400,000* $11,335,000* Water and Sewer System Taxable Water and Sewer System Revenue Refunding Bonds, Revenue Refunding Bonds, Series 2016A Series 2016B Dated: Date of Delivery Due: As shown below The City of Winston-Salem, North Carolina Water and Sewer System Revenue Refunding Bonds, Series 2016A (the “2016A Bonds”) and its Taxable Water and Sewer System Revenue Refunding Bonds, Series 2016B (the “2016B Bonds” and collectively with the 2016A Bonds, the “2016 Bonds”) are issuable as fully registered bonds. The 2016 Bonds are being issued for the purpose of (1) refunding the City’s Water and Sewer System Revenue and Revenue Refunding Bonds, Series 2007A, maturing on and after June 1, 2018, (2) refunding the City’s Water and Sewer System Revenue Bonds, Series 2009, maturing on and after June 1, 2020, (3) refunding the City’s Water and Sewer System Revenue Bonds, Series 2010A, maturing on and after June 1, 2021 and (4) paying the costs of issuing the 2016 Bonds. The 2016 Bonds will bear interest from their date payable on June 1, 2016, and semiannually thereafter on each June 1 and December 1. The 2016A Bonds are subject to optional redemption before their stated maturities as described herein. The 2016B Bonds are not subject to redemption before their stated maturities. The 2016 Bonds are special obligations of the City, payable solely from and secured by a pledge of the Trust Estate described herein, including Revenues of the City’s Water and Sewer Utilities System. Neither the general credit nor the taxing power of the City or the State of North Carolina or any political subdivision thereof is pledged for the payment of the 2016 Bonds, nor will the 2016 Bonds be or be deemed to be an obligation of the City or the State of North Carolina or any political subdivision thereof other than of the City to the extent of the aforementioned Trust Estate. The 2016 Bonds are offered when, as and if executed, delivered and issued by the City, subject to prior sale, modification or withdrawal of the offer without sale, and subject to the approval of validity and certain other matters by Parker Poe Adams & Bernstein LLP, Charlotte, North Carolina, as Bond Counsel, and certain other conditions. Wye River Group, Incorporated, Annapolis, Maryland, serves as the City’s financial advisor. Certain legal matters will be passed upon for the City by its City Attorney, Angela I. Carmon, Esq., Winston-Salem, North Carolina, and for the Underwriters by Moore & Van Allen PLLC, Charlotte, North Carolina. It is expected that the 2016 Bonds will be available for delivery through the facilities of DTC on or about April 13, 2016 against payment therefor. BAIRD J.P. MORGAN RAYMOND JAMES RICE FINANCIAL PRODUCTS COMPANY Dated: March __, 2016 This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, buy, to Under no circumstances shall this Preliminary to sell or the solicitation of an offer This Preliminary Official Statement constitute an offer contained herein are subject to completion or amendment. Official Statement and the information any such jurisdiction. priorlaws of qualification or filing under the securities to registration, be unlawful solicitation or sale would sale of these securities jurisdictionnor shall there be any in any in which such offer, * Preliminary, subject to change. MATURITY SCHEDULE* _______________ $118,400,000 Water and Sewer System Revenue Refunding Bonds, Series 2016A Due Principal Interest Due Principal Interest June 1 Amount Rate Yield CUSIP(1) June 1 Amount Rate Yield CUSIP(1) 2018 $790,000 2029 $5,235,000 2019 815,000 2030 5,500,000 2020 3,405,000 2031 5,775,000 2021 6,570,000 2032 6,070,000 2022 6,805,000 2033 6,370,000 2023 7,140,000 2034 6,680,000 2024 4,105,000 2035 7,020,000 2025 4,305,000 2036 7,365,000 2026 4,530,000 2037 7,740,000 2027 4,755,000 2038 6,125,000 2028 4,985,000 2039 6,315,000 $11,335,000 Taxable Water and Sewer System Revenue Refunding Bonds, Series 2016B Due Principal Interest Due Principal Interest June 1 Amount Rate Yield CUSIP(1) June 1 Amount Rate Yield CUSIP(1) 2016 $30,000 2018 $3,860,000 2017 205,000 2019 7,240,000 _______________ ___________________________ (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright©2014 CUSIP Global Services. All rights reserved. CUSIP data herein is provided by S&P Capital IQ, a division of McGraw-Hill Financial, Inc. CUSIP data herein is provided for convenience of reference only. Neither the City or the Underwriters take responsibility for the accuracy of such data. * Preliminary, subject to change. No dealer, broker, salesman or any other person has been authorized by the City or the Underwriters to give any information or to make any representation, other than the information and representations contained in this Official Statement, in connection with the offering of the 2016 Bonds, and, if given or made, such information or representation must not be relied upon as having been authorized by any of the foregoing. The information in this Official Statement is 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 or others since the date hereof. This Official Statement does not constitute an offer to sell or a solicitation of any offer to buy any of the securities offered hereby in any jurisdiction in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such offer or solicitation. This Official Statement is submitted in connection with the sale of securities as referred to herein, and may not be reproduced or be used, in whole or in part, for any other purpose. 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 respective 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. These securities have not been registered with the Securities and Exchange Commission by reason of the provisions of Section 3(a)(2) of the Securities Act of 1933, as amended. The registration or qualification of these securities in accordance with applicable provisions of securities laws of the states in which these securities have been registered or qualified and the exemption from registration or qualification in other states, shall not be regarded as a recommendation thereof. Neither these states, nor any of their agencies have passed upon the merits of the securities or the accuracy or completeness of this Official Statement. Any representation to the contrary may be a criminal offense. In connection with this offering, the Underwriters may over-allot or effect transactions that stabilize or maintain the market price of the 2016 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time and, if discontinued, may be recommenced at any time. This Official Statement contains forecasts, projections, and estimates that are based on current expectations but are not intended as representations of fact or guarantees of results. If and when included in this Official Statement, the words “expects,” “forecasts,” “projects,” “intends,” “anticipates,” “estimates,” and analogous expressions are intended to identify forward-looking statements as defined in the Securities Act of 1933, as amended, and any such statements inherently are subject to a variety of risks and uncertainties, which could cause actual results to differ materially from those contemplated in such forward-looking statements. These forward-looking statements speak only as of the date of this Official Statement. The City disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the City’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission, as amended, and in effect on the date hereof, this Preliminary Official Statement constitutes an official statement of the City that has been deemed final by the City as of its date except for the omission of no more than the information permitted by Rule 15c2-12.