City of Austin
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PRELIMINARY OFFICIAL STATEMENT Dated January 10, 2017 Ratings: Moody’s: “Aa3” Standard & Poor’s: “AA” Fitch: “AA-” (See “OTHER RELEVANT INFORMATION – Ratings”) NEW ISSUE Book-Entry-Only Delivery of the Bonds is subject to the receipt of the opinion of Norton Rose Fulbright US LLP, Bond Counsel, to the effect that, assuming continuing compliance by the City of Austin, Texas (the “City”) with certain covenants contained in the Fifteenth Supplement described in this document, interest on the Bonds will be excludable from gross income for purposes of federal income taxation under existing law, subject to the matters described under “TAX MATTERS” in this document, including the alternative minimum tax on corporations. CITY OF AUSTIN, TEXAS (Travis, Williamson and Hays Counties) $103,425,000* Electric Utility System Revenue Refunding Bonds, Series 2017 Dated: Date of Delivery Due: As shown on the inside cover page The bonds offered in this document are the $103,425,000* City of Austin, Texas Electric Utility System Revenue Refunding Bonds, Series 2017 (the “Bonds”). The Bonds are the fifteenth series of “Parity Electric Utility Obligations” issued pursuant to the master ordinance governing the issuance of electric utility system indebtedness (the “Master Ordinance”) and are authorized and being issued in accordance with a supplemental ordinance pertaining to the Bonds (the “Fifteenth Supplement”). The Fifteenth Supplement delegated to a designated “Pricing Officer” the authority to effect the sale of the Bonds, subject to the terms of the Fifteenth Supplement. See “INTRODUCTION” in this document. The Master Ordinance provides the terms for the issuance of Parity Electric Utility Obligations and the related covenants and security provisions. The City must comply with the covenants and security provisions relating to the Prior First Lien Obligations (defined in this document) and Prior Subordinate Lien Obligations (defined in this document) while they remain outstanding. The Master Ordinance provides that no additional revenue obligations shall be issued on parity with the Prior First Lien Obligations or Prior Subordinate Lien Obligations. Commercial Paper Obligations (defined in this document) currently authorized, having a combined pledge of Electric Light and Power System and Water and Wastewater System revenues, may continue to be issued on a subordinate lien basis to the Parity Electric Utility Obligations. The Bonds are ities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered delivered is Statement Official the time the to prior accepted be buy to offers may nor sold be not may ities r special obligations of the City, payable as to both principal and interest solely from, and together with the outstanding Parity Electric Utility Obligations and Prior Subordinate Lien Bonds, equally and ratably secured only by a lien on and pledge of the Net Revenues of the City’s Electric n of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation solicitation offer, such which in jurisdiction any in securities these of sale any be there shall nor buy to offer an of n Utility System as provided in the Master Ordinance and the Fifteenth Supplement. The taxing powers of the City and the State of Texas are not pledged as security for the Bonds. See “SECURITY FOR THE BONDS” in this document. The definitive Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof within a maturity. Interest on the Bonds will accrue from the date of initial delivery and shall be payable on May 15, 2017 and each November 15 and May 15 thereafter until maturity or prior redemption. The Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). The City reserves the right to discontinue such book-entry system. See “DESCRIPTION OF THE BONDS” in this document. U.S. Bank, National Association, will serve as the initial paying agent/registrar (the “Paying Agent/Registrar”) for the Bonds. MATURITY SCHEDULE See “Maturity Schedule” on the Inside Cover Page The City reserves the right, at its option, to redeem the Bonds prior to their scheduled maturity. (See “DESCRIPTION OF THE BONDS - Optional Redemption of the Bonds” in this document. Certain of the bonds are subject to mandatory sinking fund redemption prior to their scheduled maturities. (See “DESCRIPTION OF THE BONDS – Mandatory Sinking Fund Redemption of the Bonds”) in this document. The Bonds are offered for delivery when, as, and if issued and subject, among other things, to the opinions of the Attorney General of the State of Texas and Norton Rose Fulbright US LLP, Bond Counsel for the City, as to the validity of the issuance of the Bonds under the Constitution y Official Statement constitute an offer to sell or the solicitatio the or sell to offer an constitute Statement Official y and laws of the State of Texas. The opinion of Bond Counsel will be printed on or attached to the Bonds. (See APPENDIX E – “Form of Bond Counsel’s Opinion”) in this document. Certain legal matters will be passed on for the Underwriters by their counsel, Haynes and Boone, LLP. It is expected that the Bonds will be delivered through the facilities of DTC on or about February 14, 2017. Morgan Stanley J.P. Morgan Citigroup Global Markets Inc. Ramirez & Co., Inc. Loop Capital Markets ____________________ *Preliminary, subject to change. in final form. Under no circumstances shall this Preliminar this shall circumstances no Under form. final in jurisdiction. such any of laws securities the under qualification or registration to prior unlawful be would sale or This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These secu These amendment. or completion to subject are herein contained information the and Statement Official Preliminary This CITY OF AUSTIN, TEXAS $103,425,000* Electric Utility System Revenue Refunding Bonds, Series 2017 Base CUSIP No. 052414 (1) MATURITY SCHEDULE* Principal Interest Initial CUSIP Maturity Amount Rate Yield Suffix (1) 11-15-2019 $5,135,000 11-15-2020 270,000 11-15-2021 285,000 11-15-2022 300,000 11-15-2023 315,000 11-15-2024 330,000 11-15-2025 345,000 11-15-2026 365,000 11-15-2027 380,000 11-15-2028 400,000 11-15-2029 420,000 11-15-2030 8,745,000 11-15-2031 9,165,000 11-15-2032 9,600,000 11-15-2033 10,055,000 11-15-2034 10,535,000 11-15-2035 11,035,000 11-15-2036 11,450,000 11-15-2037 11,910,000 11-15-2038 12,385,000 $_______ % Series 2017 Term Bond due November 15, 20__, Initial Yield %, CUSIP $________ % Series 2017 Term Bond due November 15, 20__, Initial Yield %, CUSIP (Interest to accrue from Date of Initial Delivery) Optional Redemption of the Bonds The City reserves the right, at its option, to redeem the Bonds maturing on or after November 15, 2027, in whole or in part in the principal amount of $5,000 or any integral multiple thereof, on November 15, 2026, or any date thereafter pursuant to the terms stated in this document under “DESCRIPTION OF THE BONDS – Optional Redemption of the Bonds”. Mandatory Sinking Fund Redemption of the Bonds The Bonds having stated maturities of ____ and ____, respectively, are subject to mandatory redemption prior to maturity in part, in the manner described in this document under “DESCRIPTION OF THE BONDS – Mandatory Sinking Fund Redemption of the Bonds”. ____________________ (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data in this document is provided by CUSIP Global Services (“CGS”), managed by S&P Capital IQ on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the services provided by CGS. CUSIP numbers are provided for convenience of reference only. None of the City, the Financial Advisor, or the Underwriters take any responsibility for the accuracy of such numbers. *Preliminary, subject to change. i CITY OF AUSTIN Elected Officials Term Expires Jan. 5 Steve Adler ................................................................................................................................Mayor 2019 Ora Houston ..........................................................................................Councilmember District 1 2019 Delia Garza ..............................................................................................Councilmember District 2 2021 Sabino “Pio” Renteria ...........................................................................Councilmember District 3 2019 Gregorio “Greg” Casar .........................................................................Councilmember District 4 2021 Ann Kitchen ...........................................................................................Councilmember District 5 2019 Jimmy Flanagan(1) ....................................................................................Councilmember District 6 2021 Leslie Pool ..............................................................................................Councilmember District 7 2021 Ellen Troxclair .......................................................................................Councilmember District 8 2019 Kathryne B. Tovo, Mayor Pro Tem ....................................................Councilmember District 9 2019 Alison Alter(1) ........................................................................................Councilmember