Salt River Project Agricultural Improvement and Power District, Arizona Salt River Project Electric System Revenue Bonds, 2017 Series A
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SUPPLEMENT DATED OCTOBER 27, 2017 TO PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 23, 2017 RELATING TO $737,525,000∗ Salt River Project Agricultural Improvement and Power District, Arizona Salt River Project Electric System Revenue Bonds, 2017 Series A The information provided below supplements the Preliminary Official Statement dated October 23, 2017 (the “Preliminary Official Statement”) for the above-referenced Bonds. Capitalized terms are used as defined in the Preliminary Official Statement. The following is added as a sixth paragraph under the subheading “THE DISTRICT – Organization, Management and Employees”: SRP has an established Mandatory Retirement Age policy for the General Manager and the individuals that report directly to the General Manager. Pursuant to this policy, General Manager and CEO Mark Bonsall has announced that he will retire at the end of the current fiscal year, which ends on April 30, 2018. Both the District Board and the Association Board of Governors have approved a recommendation to commence a succession planning process for a new General Manager/CEO. Please affix this Supplement to the Preliminary Official Statement that you have in your possession and forward this Supplement to any party to whom you delivered a copy of the Official Statement. ______________________ ∗ Preliminary, subject to change. PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 23, 2017 NEW ISSUE FULL BOOK-ENTRY In the opinion of Special Tax Counsel, under existing statutes and court decisions and assuming compliance with the tax covenants described herein, and the accuracy of certain representations and certifications made by the Salt River Project Agricultural Improvement and Power District, interest on the 2017 Series A Bonds is excluded from gross income of the owners thereof for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). In the further opinion of Special Tax Counsel, interest on the 2017 Series A Bonds is not treated as a preference item in calculating the alternative minimum tax imposed under the Code with respect to individuals and corporations; such interest, however is included in adjusted current earnings in calculating alternative minimum taxable income for purposes of the alternative minimum tax imposed under the Code on certain corporations. In the opinion of Special Tax Counsel, interest on the 2017 Series A Bonds is exempt from income taxes imposed by the State of Arizona. See “TAX MATTERS” herein regarding certain other tax considerations. $737,525,000* SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, ARIZONA Salt River Project Electric System Revenue Bonds, 2017 Series A Dated: Date of Delivery Due: As shown on inside cover The Salt River Project Electric System Revenue Bonds, 2017 Series A (the “2017 Series A Bonds”) are being issued pursuant to the Supplemental Resolution Dated September 10, 2001, authorizing an Amended and Restated Resolution Concerning Revenue Bonds, which became effective January 11, 2003, as amended and supplemented (the “Resolution”). The 2017 Series A Bonds, together with heretofore and hereafter issued Revenue Bonds, are payable from and secured by a pledge of and lien on all Revenues of the Salt River Project Agricultural Improvement and Power District (the “District”) from the ownership and operation of the Electric System after the payment of Operating Expenses. The 2017 Series A Bonds will be issued in fully registered form and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the 2017 Series A Bonds. Individual purchases of interests in the 2017 Series A Bonds may be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof. Purchasers of such interests will not receive certificates representing their interests in the 2017 Series A Bonds. Interest with respect to the 2017 Series A Bonds is payable January 1 and July 1 of each year, commencing January 1, 2018. The principal of, redemption price, if any, and interest on the 2017 Series A Bonds are payable by U.S. Bank National Association, as Trustee, and interest will be payable by check mailed by the Trustee to the registered owner of each 2017 Series A Bond as of the immediately preceding December 15 or June 15. So long as Cede & Co. is the registered owner, the Trustee will pay such principal and redemption price, if any, of and interest on the 2017 Series A Bonds to DTC, which will remit such principal, redemption price, if any, and interest to its Direct Participants for subsequent disbursement to the Beneficial Owners of the 2017 Series A Bonds. The 2017 Series A Bonds are subject to optional redemption as described herein. See “THE 2017 SERIES A BONDS — Redemption” herein. The 2017 Series A Bonds do not constitute general obligations of the Salt River Project Agricultural Improvement and Power District or obligations of the State of Arizona, and no holder of any of the 2017 Series A Bonds has the right to compel the exercise of the taxing powers of the District to pay the 2017 Series A Bonds or the interest thereon. This cover page contains certain information for quick reference only. It is not intended to be a summary of all factors relating to an investment in the 2017 Series A Bonds. Investors should read this Official Statement in its entirety before making an investment decision. The 2017 Series A Bonds are offered when, as and if issued, and subject to the approval of legality by Chiesa Shahinian & Giantomasi PC, Bond Counsel. Certain legal matters will be passed upon for the District by Polsinelli PC, Special Tax Counsel, and for the Underwriters by Katten Muchin Rosenman LLP. It is expected that the 2017 Series A Bonds will be available for delivery through the facilities of DTC on or about _______, 2017. Goldman Sachs & Co. LLC BofA Merrill Lynch Citigroup Morgan Stanley J.P. Morgan Dated: October 23, 2017 This is a Preliminary Official Statement, subject to correction, completion or amendment without notice, and change, and is not yet finally accepted. The District has authorized the distribution of this Preliminary Official Statement to prospective purchasers and others. Upon the sale of the 2017 the sale Upon District The others. and this Preliminarypurchasers of distribution has authorized the to prospective Statement Official accepted. yet finally is not and Preliminaryis a change, This and without notice, amendment completion or correction, to Statement, subject Official Under no circumstances shall this Preliminary form. in final buy be accepted prior to the time this Official Statement is delivered to an offer not be sold nor may These securities may form. an Official Statement substantially in this Series the District adopt and deliver A Bonds, will complete, any such jurisdiction. priorlaws of or qualification under the securities to registration would be unlawful solicitation or sale sale of these securities jurisdiction nor shall there be any in any in which such offer, buy, to to sell or the solicitation of an offer Official Statement constitute an offer * Preliminary, subject to change SALT RIVER PROJECT ELECTRIC SYSTEM REVENUE BONDS, 2017 SERIES A Serial Bonds Maturity Principal Interest CUSIP (January 1) Amount Rate Yield Number** ________________________________ ** CUSIP numbers have been assigned by Standard & Poor’s CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc. and are included solely for the convenience of the Holders of the 2016 Series A Bonds. The District is not responsible for the selection or use of these CUSIP numbers, and no representation is made as to their correctness on the 2016 Series A Bonds or as indicated above. The CUSIP number for a specific maturity is subject to change after the issuance of the 2016 Series A Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as the result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the 2016 Series A Bonds. MANAGEMENT OF THE DISTRICT BOARD OF DIRECTORS David Rousseau, President Robert C. Arnett Wendy L Marshall William W. Arnett Mark V. Pace Nicholas R. Brown Paul E. Rovey Deborah S. Hendrickson John M. White Jr. Mario J. Herrera Leslie C. Williams Paul W. Hirt Stephen H. Williams Kevin J. Johnson Keith B. Woods PRINCIPAL OFFICERS AND OTHER EXECUTIVES Officers: David Rousseau ..................................................... President John R. Hoopes...................................................... Vice President John M. Felty ......................................................... Corporate Secretary Steven J. Hulet ....................................................... Corporate Treasurer & Senior Director of Financial Services Executive Management: Mark B. Bonsall .................................................... General Manager & Chief Executive Officer Michael Hummel ................................................... Deputy General Manager Resources & Finance Michael W. Lowe .................................................. Deputy General Manager Customer Operations & Services & Chief Customer Executive Alaina Chabrier ..................................................... Associate General Manager & Chief Communications Executive Peter M. Hayes .....................................................