Virginia Small Business Financing Authority Preliminary Official Statement Dated January 7, 2020 H
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PRELIMINARY OFFICIAL STATEMENT DATED JANUARY 7, 2020 NEW ISSUE—BOOK-ENTRY ONLY Ratings: See “RATINGS” Assuming compliance with certain covenants and subject to the qualifications as described in “TAX MATTERS,” in the opinion of Bond Counsel, under current law, interest on the Bonds is excludable from the gross income of owners of the Bonds for federal income tax purposes and is excludable from federal alternative minimum taxable income as defined in Section 55(b)(2) of the Internal Revenue Code of 1986, as amended. Recipients of such interest may also be subject to other federal income tax consequences as described in “TAX MATTERS.” In the opinion of Bond Counsel, under existing laws of the Commonwealth of Virginia, interest on the Bonds is not subject to Virginia income taxation. $200,000,000* VIRGINIA SMALL BUSINESS FINANCING AUTHORITY HEALTH CARE FACILITIES REFUNDING REVENUE BONDS (SENTARA HEALTHCARE), SERIES 2020 Dated: Date of Issuance Due: November 1, as shown on the inside cover The $200,000,000* Virginia Small Business Financing Authority Health Care Facilities Refunding Revenue Bonds (Sentara Healthcare), Series 2020 (the “Bonds”) are limited obligations of the Virginia Small Business Financing Authority (the “Issuer”) and are issued and secured under the provisions of a Bond Trust Indenture, dated as of February 1, 2020 (the “Bond Indenture”), by and between the Issuer and U.S. Bank National Association, as bond trustee (the “Bond Trustee”), as described herein. The Issuer will lend the proceeds of the sale of the Bonds to Sentara Healthcare (“Sentara”) pursuant to a Loan Agreement, dated as of February 1, 2020 (the “Loan Agreement”), between the Issuer and Sentara as described herein. The payment obligations of Sentara under the Loan Agreement will be evidenced by a promissory note (the “Note”) to be issued under the Master Indenture (defined herein) and delivered by Sentara to the Issuer. The Note is a direct obligation of Sentara and future members of the Obligated Group (defined herein), if any. The Note is being issued and secured under a Supplemental Indenture No. 2020-1, dated as of February 1, 2020 (the “Supplemental Indenture”), supplementing a Master Trust Indenture, dated as of December 15, 1998, as previously supplemented (the “Master Trust Indenture” and, as supplemented by the Supplemental Indenture, the “Master Indenture”), all by and between Sentara and U.S. Bank National Association, Richmond, Virginia, as successor master trustee (in such capacity, the “Master Trustee”). Sentara is the only member of the Obligated Group under the Master Indenture. The Master Indenture directly obligates only the Obligated Group members; however, the Master Indenture requires that the Obligated Group members will cause each Obligated Group Affiliate, herein defined, (i) to pay, loan or transfer such amounts sufficient with other available monies to enable the Obligated Group to pay amounts due and payable on the Note and the other Obligations issued under the Master Indenture and (ii) to comply with certain other covenants in the Master Indenture. The proceeds derived from the sale of the Bonds will be loaned to Sentara and, together with certain other available funds, will be used to refund certain obligations previously issued to finance or refinance the cost of certain facilities and equipment for Sentara. The Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as registered owner and as nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. The Bonds may be purchased in denominations of $5,000 and any integral multiple thereof. Purchases of Bonds may be made only in book-entry form through Participants (as defined herein) and no physical delivery of the Bonds will be made to the Beneficial Owners (as defined herein), except as herein described. So long as Cede & Co. is the registered owner of the Bonds, references herein to the registered owners of Bonds (“Holders”) shall mean Cede & Co., and shall not mean the Beneficial Owners of the Bonds. Interest on the Bonds, together with the principal of and premium, if any, thereon will be paid by the Bond Trustee to Cede & Co. so long as Cede & Co. is the Holder. The disbursement of such payments to the Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners of the Bonds is the responsibility of Participants and Indirect Participants (as defined herein). See “THE BONDS—Book-Entry-Only System.” The Bonds will mature on November 1 in the years and in the respective principal amounts shown on the inside cover. The Bonds will bear interest from their date of initial delivery at the respective interest rate shown on the inside cover payable on each May 1 and November 1, commencing May 1, 2020 to the registered holders thereof as of the 15th day (whether or not a business day) of the month immediately preceding such interest payment date. See “THE BONDS.” The Bonds will be subject to optional and mandatory redemption and purchase in lieu of redemption prior to maturity as described herein. See “THE BONDS.” This cover contains information for quick reference only. Investors must read the entire Official Statement, including all appendices, to obtain information essential to making an informed investment decision. THE BONDS DO NOT CONSTITUTE A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE ISSUER. THE BONDS ARE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR. NEITHER THE COMMONWEALTH OF VIRGINIA, NOR ANY OF ITS POLITICAL SUBDIVISIONS, INCLUDING THE ISSUER, SHALL BE OBLIGATED TO PAY THE SAME OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES AND MONEYS PLEDGED THEREFOR. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA, NOR ANY OF ITS POLITICAL SUBDIVISIONS, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, THE PREMIUM, IF ANY, AND INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO. THE ISSUER HAS NO TAXING POWER. THE BONDS ARE NOT A DEBT OF THE UNITED STATES OF AMERICA OR ANY AGENCY OF THE UNITED STATES AND ARE NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF THE UNITED STATES OF AMERICA. THE ISSUER HAS NOT ENDORSED THE CREDITWORTHINESS OF SENTARA OR THE ABILITY OF SENTARA TO REPAY THE BONDS, AND NO REPRESENTATIONS OF ANY KIND ARE MADE TO ANY PROSPECTIVE PURCHASER OF THE BONDS BY THE ISSUER. Citigroup Barclays The Bonds are offered when, as and if issued by the Issuer and received by the Underwriters, subject to prior sale and to the approval of legality by Butler Snow LLP, Richmond, Virginia, Bond Counsel. Certain legal matters will be passed upon for the Issuer by the Office of the Attorney General of Virginia, Richmond, Virginia. Certain legal matters will be passed upon for the Obligated Group by its counsel, Butler Snow LLP, Richmond, Virginia. Certain legal matters will be passed upon for the Underwriters by their counsel, King & Spalding LLP. It is expected that the Bonds will be available for delivery through the facilities of DTC in New York, New York on or about February __, 2020. January __, 2020 * Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to change, completion or amendment without notice. The Bonds may not be sold nor may offers to buy be accepted prior to the time Official Statement to offers not be sold nor may The Bonds may This Preliminary completion or amendment without notice. contained herein are subject to change, Official Statement and the information solicitation any jurisdictionany sale of the Bonds in in which such offer, nor shall there be buy, to Under no circumstances shall this Preliminary to sell or a solicitation of an offer Official Statement constitute an offer form. in final is delivered prior of such jurisdiction. or qualification under the securities to registration be unlawful laws or sale would MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES $200,000,000* VIRGINIA SMALL BUSINESS FINANCING AUTHORITY HEALTH CARE FACILITIES REFUNDING REVENUE BONDS (SENTARA HEALTHCARE), SERIES 2020 $____________ Serial Bonds Maturity Interest Price or CUSIP (Nov. 1) Amount Rate Yield No. $________ __% Term Bonds, Due November 1, 20__, Price or Yield ______%; CUSIP No. $________ __% Term Bonds, Due November 1, 20__, Price or Yield ______%; CUSIP No. $________ __% Term Bonds, Due November 1, 20__, Price or Yield ______%; CUSIP No. ___________ * Preliminary, subject to change. This Official Statement does not constitute an offer to sell the Bonds or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any state or other jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale in such state or jurisdiction. No dealer, broker, salesperson or any other person has been authorized to give any information or to make any representation other than those contained herein in connection with the offering of the Bonds, and, if given or made, such information or representation must not be relied upon. Citigroup Global Markets Inc. (“Citigroup”) and Barclays Capital Inc. (“Barclays” and, together with Citigroup, 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 responsibility 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. The information relating to DTC and the book-entry system set forth herein under the caption “THE BONDS—General” and “—Book-Entry-Only System” hereto has been furnished by DTC.