$9,935,000* BOROUGH of MONACA Beaver County, Pennsylvania General Obligation Bonds, Series of 2016
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NEW ISSUE: BOOK – ENTRY ONLY Insured Rating (Insured Bonds only, if any): S&P “__”* Underlying Rating: S&P “A+” (Stable Outlook) (See “Bond Rating” herein) PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 22, 2016 In the opinion of Bond Counsel, under existing law and assuming continuing compliance by the Borough with certain covenants to comply with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the interest on and accruals of original issue discount with respect to the Bonds are excluded from gross income for Federal income tax purposes and are not items of tax preference for purposes of the Federal alternative minimum tax imposed on individuals and corporations; however: (i) with respect to corporations, such interest and accruals are taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax in accordance with Section 55 of the Code and (ii) with respect to foreign corporations, interest on the Bonds could be subject to a branch profits tax. (See “TAX EXEMPTION AND OTHER TAX MATTERS” herein.) In the opinion of Bond Counsel, interest on the Bonds is exempt under present statutory and case law from the Pennsylvania Corporate Net Income Tax and from personal income taxation by the Commonwealth of Pennsylvania, or by any of its political subdivisions, and the Bonds are, under present statutory and case law, exempt from Pennsylvania personal property taxes. (See “TAX EXEMPTION AND OTHER TAX MATTERS” herein.) The Borough has designated each of the Bonds as a “qualified tax-exempt obligation” for purposes of Section 265 of the Code (relating to deduction of interest expense allocable to tax-exempt obligations held by certain financial institutions), and in the opinion of Bond Counsel the Bonds are “qualified tax-exempt obligations” within the meaning of said Section 265. $9,935,000* BOROUGH OF MONACA Beaver County, Pennsylvania General Obligation Bonds, Series of 2016 Dated: Date of Delivery Due: May 15, as shown overleaf The General Obligation Bonds, Series of 2016, in the aggregate principal amount of $9,935,000* (the “Bonds”) of the Borough of Monaca, Beaver County, Pennsylvania (the “Borough”) will be issued in fully registered form (without coupons) in the denomination of $5,000 or any whole multiple thereof within a maturity. The principal of the Bonds will be payable at the Designated Corporate Trust Office (hereinafter defined) of the Paying Agent, U.S. Bank National Association, to the registered owners thereof upon due presentation and surrender of the applicable Bonds (or, while the DTC Book-Entry-Only System described below is in effect with respect to the Bonds, pursuant to arrangements made from time to time between the Borough and DTC). The regularly scheduled installments of interest on the Bonds (payable May 15 and November 15, beginning with May 15, 2017) will be paid by mail to the registered owners entitled to receive the same at their registered addresses, by check or draft drawn on the Paying Agent or (while the DTC Book-Entry-Only System described below is in effect with respect to the Bonds, and in certain other circumstances) by wire transfer to such registered owners, as more fully described herein. See “THE BONDS” herein. The Bonds will be initially issued and distributed under a book-entry-only system operated by The Depository Trust Company (“DTC”), and will be registered in the name of CEDE & Co., as sole registered owner thereof and nominee for DTC. Under this system (the “DTC Book-Entry-Only System”), , solicitation or sale would be unlawful prior to registration qualification under the securities laws of any such jurisdiction. DTC will act as securities depository for the Bonds and individual purchasers of book-entry interests in the Bonds will not receive Borough-issued certificates fer representing their ownership interest in the Bonds. So long as CEDE & Co., as nominee of DTC, is the sole registered owner of the Bonds and the DTC Book- Entry-Only system is in effect for the Bonds, references herein to Bondholders and holders or owners of the Bonds should be taken in all cases to mean the owners of book-entry interests in the Bonds and not the actual holder and registered owner of the Bonds, CEDE & Co., or DTC, and each such Bondholder must maintain an account with a DTC Direct or Indirect Participant in order to receive principal or interest payments made in respect of its ownership of beneficial interest in the Bonds. See “BOOK-ENTRY-ONLY SYSTEM” herein. MATURITY SCHEDULE (See Inside Front Cover) Redemption: The Bonds are subject to redemption prior to maturity as more fully set forth herein. Bond Insurance: The Bonds may or not be issued with bond insurance and the decision as to whether to purchase bond insurance on all or a portion of the Bonds will be made at the time of pricing of the Bonds. Security: The Bonds are general obligations of the Borough of Monaca, Beaver County, Pennsylvania and the Borough has pledged its full faith, credit and taxing power, including its power to levy therefor ad valorem taxes, unlimited as to rate or amount, on all taxable real property located within the Borough, for the payment of the principal of and interest on the Bonds. The Bonds are offered, subject to prior sale, withdrawal or modification, when, as and if issued by the Borough and received by the Underwriter and subject to the unqualified approving legal opinion of the Law Office of John F. Salopek, Ambridge, Pennsylvania, Bond Counsel. Said opinion will be furnished upon delivery of the Bonds. Certain legal matters will be passed upon for the Borough by Richard Urick, Esq., Aliquippa, Pennsylvania, Solicitor for the Borough, and for the Underwriter by Joseph A. Askar, Esq., Beaver, Pennsylvania. The Bonds are expected to be delivered on or about _____, 2016. The date of this Official Statement is _____, 2016 This is a Preliminary Official Statement subject to change. However, the Issuer has deemed this Preliminary Official Statement to be final for the purposes of Securities and Exchange Commission Rule 15c2-12(b)(1), except for certain information on the cover on the information certain for except 15c2-12(b)(1), Rule Commission Exchange and of Securities purposes the for final be to Statement Official Preliminary this deemed has Issuer the However, change. to subject Statement Official Preliminary a is This and selected pages hereof which has been omitted or estimated in accordance with such Rule and which will be completed in the Thisfinal Preliminary Official Statement. Statement offer shall notto sell constitute offer or thean to solicitation of an buy nor shall there be any sale of the securities described herein in jurisdiction which such * Estimated, subject to change $9,935,000* BOROUGH OF MONACA Beaver County, Pennsylvania General Obligation Bonds, Series of 2016 MATURITY SCHEDULE* Dated: Date of Delivery Due: May 15, as shown below Annual Principal Interest CUSIP Year Amount* Rate Price (a) Number 2017 $480,000 2018 480,000 2019 485,000 2020 485,000 2021 500,000 2022 510,000 2023 605,000 2024 735,000 2025 750,000 2026 870,000 2027 900,000 2028 620,000 2029 640,000 2030 650,000 2031 660,000 2032 565,000 (a) Based on delivery date of _____, 2016. (b) Premium Bonds. (See “Premium Bonds” herein.) (c) Original Issue Discount Bonds. (See “Original Issue Discount” herein.) (d) Term Bonds ________________________ * Estimated, subject to change (Inside Front Cover) ii THE INFORMATION SET FORTH HEREIN HAS BEEN OBTAINED BY THE BOROUGH OF MONACA, BEAVER COUNTY, PENNSYLVANIA (THE "ISSUER") FROM ITS OWN RECORDS OR FROM OTHER SOURCES IT BELIEVES TO BE RELIABLE BUT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS BY, AND IS NOT TO BE CONSTRUED AS A REPRESENTATION OR WARRANTY OF, THE ISSUER. THE INFORMATION AND EXPRESSIONS OF OPINION 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 ISSUER, OR ANY OTHER ENTITY PROVIDING SUBSTANTIAL SECURITY PLEDGED TO THE BONDS, SINCE THE DATE HEREOF. THE ISSUER IS THE AUTHOR OF THIS OFFICIAL STATEMENT AND IS RESPONSIBLE FOR ITS ACCURACY AND COMPLETENESS. THE UNDERWRITER IS NOT THE AUTHOR OF THIS OFFICIAL STATEMENT. IN ACCORDANCE WITH ITS RESPONSIBILITIES UNDER THE FEDERAL SECURITIES LAWS, THE UNDERWRITER IS REQUIRED TO REVIEW THE INFORMATION IN THIS OFFICIAL STATEMENT AND MUST HAVE A REASONABLE BASIS FOR ITS BELIEF IN THE ACCURACY AND COMPLETENESS OF THE OFFICIAL STATEMENT'S KEY REPRESENTATIONS. THIS OFFICIAL STATEMENT, INCLUDING THE FRONT COVER AND OTHER FRONTISPAGES HEREOF AND THE APPENDICES ATTACHED HERETO (IF ANY), DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITY OTHER THAN THE BONDS SPECIFICALLY OFFERED HEREBY. NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED BY THE ISSUER OR THE UNDERWRITER TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS 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 EITHER OF THE FOREGOING. 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. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT NOTICE.