Chester County Health and Education Facilities Authority
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PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 16, 2020 NEW ISSUE: Book-Entry Only Ratings: S&P: “AA” Fitch: “AA” Moody’s: Aa3” (See “RATINGS” herein) In the opinion of Ballard Spahr LLP, Bond Counsel, interest on the Series 2020B Bonds is excludable from gross income for purposes of federal income tax, assuming continuing compliance with the requirements of the federal tax law. Interest on the Series 2020B Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. Bond Counsel is of the opinion that interest on the Series 2020C Bonds is not excludable from gross income for federal income tax purposes. Bond counsel is also of the opinion that the interest on the Series 2020 Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax, under the laws of the Commonwealth of Pennsylvania as enacted and construed on the date of initial delivery of the Series 2020 Bonds. See “TAX MATTERS” herein. $214,294,000* CHESTER COUNTY HEALTH AND EDUCATION FACILITIES AUTHORITY Health System Revenue Bonds (Main Line Health System) Consisting of $23,670,000* $190,624,000* Health System Revenue Bonds Health System Revenue Bonds (Main Line Health System), (Main Line Health System), Series 2020B Series 2020C (Federally Taxable) Dated: Date of Delivery Due: June 1,* as shown on inside cover The Chester County Health and Education Facilities Authority (the “Issuer”) is issuing its $23,670,000* Health System Revenue Bonds (Main Line Health System), Series 2020B (the “Series 2020B Bonds”) and $190,624,000* Health System Revenue Bonds (Main Line Health System), Series 2020C (Federally Taxable) (the “Series 2020C Bonds” and together with the Series 2020B Bonds, the “Series 2020 Bonds”) pursuant to a Trust Indenture, dated as of November 1, 2020 (the “Bond Indenture”) between the Issuer and U.S. Bank National Association, as Bond Trustee (the “Bond Trustee”). The Series 2020 Bonds are payable solely from, and secured equally by an assignment to the Bond Trustee of, payments to be received by the Issuer pursuant to a Loan Agreement, dated as of November 1, 2020 (the “Loan Agreement”), between the Issuer and Main Line Health System (the “Corporation”) and a Series 2020B Master Note (Chester County Health and Education Facilities Authority) (the “Series 2020B Master Note”) and a Series 2020C Master Note (Chester County Health and Education Facilities Authority) (the “Series 2020C Master Note” and together with the Series 2020B Master Note, the “Series 2020 Master Notes”), each issued as an Obligation under an Amended and Restated Master Trust Indenture, dated as of February 1, 2020, as previously supplemented, and as supplemented by a Second Supplement to the Master Trust Indenture dated as of November 1, 2020 (as supplemented, the “Master Indenture”), each by and among the Corporation, each other Member of the Obligated Group (as defined herein) and U.S. Bank National Association, as successor Master Trustee. The Series 2020 Bonds are issuable as fully registered bonds without coupons, and when issued, will be registered in the name of Cede & Co., as Bondholder and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as Securities Depository for the Series 2020 Bonds. Purchases of beneficial ownership interests will be made in book-entry only form in denominations of (i) $5,000 or any integral multiple thereof with regard to the Series 2020B Bonds, and (ii) $1,000 or any integral multiple thereof with regard to the Series 2020C Bonds. Purchasers (“Beneficial Owners”) will not receive certificates representing their beneficial interest in the Series 2020 Bonds. So long as Cede & Co., as nominee of DTC, is the Bondholder, references herein to Bondholders or registered owners shall mean Cede & Co. and shall not mean the Beneficial Owners of the Series 2020 Bonds. Principal of, premium, if any, and interest on the Series 2020 Bonds will be paid by the Bond Trustee to Cede & Co., as Bondholder and nominee for DTC, payable as to interest on each June 1 and December 1, beginning June 1, 2021. The Series 2020 Bonds will bear interest, to their respective maturities, at the Long-Term Interest Rates set forth on the inside cover of this Official Statement. At the option of the Corporation and upon compliance with the conditions set forth in the Bond Indenture, the Series 2020C Bonds may be subject to mandatory tender or may be purchased in lieu of optional redemption, and in either case converted to bear interest at a Daily Interest Rate, a Weekly Interest Rate, or a Bond Interest Term Rate, or adjusted to bear interest at a new Long-Term Interest Rate for a New Long-Term Interest Rate Period. This Official Statement has been prepared for use in connection with the offering of the Series 2020 Bonds only while they bear interest at the initial Long-Term Interest Rate and is not intended to provide information relating to the Series 2020 Bonds while they bear interest in any other interest rate mode. The Series 2020B Bonds will be subject to extraordinary redemption prior to maturity. The Series 2020C Bonds will be subject to optional, extraordinary and mandatory redemption, and purchase in lieu of optional redemption prior to maturity. See “THE SERIES 2020 BONDS - Redemption Provisions” herein. The Series 2020 Bonds are special limited obligations of the Issuer and are payable solely from payments made by the Corporation and received by the Issuer under the Loan Agreement and from certain funds held under the Bond Indenture, all as more fully described herein. Neither the general credit of the Issuer nor credit nor the taxing power of the County of Chester or the Commonwealth of Pennsylvania or any political subdivision thereof is pledged for the payment of the Series 2020 Bonds, nor shall the Series 2020 Bonds be or be deemed an obligation of the County of Chester or of the Commonwealth of Pennsylvania or of any political subdivision thereof. The Issuer has no taxing power. This cover page contains certain information for general reference only. It is not a summary of this issue. Investors must read the entire Official Statement, including the Appendices, to obtain information essential to make an informed investment decision. The Series 2020 Bonds are offered by the Underwriter, subject to prior sale, to withdrawal or modification of such offer without any notice, and to the approval of legality of the Series 2020 Bonds by Ballard Spahr LLP, Philadelphia, Pennsylvania, Bond Counsel to the Issuer. Certain legal matters will be passed upon for the Issuer by its counsel, Lamb McErlane PC, West Chester, Pennsylvania. Certain legal matters will be passed upon for the Corporation by its Senior Vice President and General Counsel, Brian T. Corbett, Esq., and by its counsel, Ballard Spahr LLP, Philadelphia, Pennsylvania and for the Underwriter by its counsel, McCarter & English, LLP, Newark, New Jersey. It is expected that the Series 2020 Bonds in definitive form will be available for delivery to DTC in New York, New York, on or about __________, 2020. Citigroup The date of this Official Statement is __________, 2020. This Preliminary Official Statement and any 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 offer of an the solicitation or to sell Preliminary this shall circumstances Under no offer constitute an Official Statement This Preliminary amendment. and completion subject to contained herein are information any and Official Statement prior of such jurisdiction. or qualification under the securities to the registration be unlawful laws solicitation or sale would sale of the Series jurisdiction nor shall there be any 2020 Bonds in any in which such offer, buy, * Preliminary, subject to change. $23,670,000* CHESTER COUNTY HEALTH AND EDUCATION FACILITIES AUTHORITY Health System Revenue Bonds (Main Line Health System), Series 2020B MATURITY SCHEDULE* Year Principal Interest CUSIP (June 1) Amount Rate Yield Price Number† $190,624,000* CHESTER COUNTY HEALTH AND EDUCATION FACILITIES AUTHORITY Health System Revenue Bonds (Main Line Health System), Series 2020C (Federally Taxable) MATURITY SCHEDULE* Year Principal Interest CUSIP (June 1) Amount Rate Yield Price Number† $____________ ____% Term Bonds Due June 1, 20__; Yield: _____%; Price: _______; CUSIP _________† $____________ ____% Term Bonds Due June 1, 20__; Yield: _____%; Price: _______; CUSIP _________† $____________ ____% Term Bonds Due June 1, 20__; Yield: _____%; Price: _______; CUSIP _________† * Preliminary, subject to change. † The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Issuer, the Corporation or the Underwriter, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refundings or defeasance of such issue or the use of secondary market financial products. None of the Issuer, the Corporation or the Underwriter has agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or