Berks County Industrial Development Authority
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NEW ISSUE – BOOK-ENTRY ONLY Ratings: S&P: A Moody’s: A3 Fitch: A In the opinion of Stevens & Lee, P.C. (“Bond Counsel”), assuming continuing compliance by the Authority and the Obligated Group with certain covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and all regulations applicable thereunder, interest on the 2017 Bonds is not includable in gross income under Section 103(a) of the Code and interest on the 2017 Bonds is not an item of tax preference for purposes of the federal, individual or corporate alternative minimum taxes; although Bond Counsel observes that such interest is included in adjusted current earnings when calculating the corporate alternative minimum taxable income; also see “TAX EXEMPTION AND OTHER TAX MATTERS” herein for a brief description of some of the other provisions of the Code affecting the purchasers and holders of the 2017 Bonds. In the opinion of Bond Counsel, under the laws of the Commonwealth of Pennsylvania (the “Commonwealth”), the 2017 Bonds and interest on the 2017 Bonds shall be free from taxation for state and local purposes within the Commonwealth, but this exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not levied directly on the 2017 Bonds or the income therefrom. Under the laws of the Commonwealth, profits, gains or income derived from the sale, exchange or other disposition of the 2017 Bonds, are subject to state and local taxation within the Commonwealth. $590,500,000 BERKS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY Health System Revenue Bonds (Tower Health Project) Series of 2017 Dated: Date of Delivery Due: November 1, as shown on the inside cover Berks County Industrial Development Authority (the “Authority”) is issuing $590,500,000 of its Health System Revenue Bonds (Tower Health Project), Series of 2017 (the “2017 Bonds”) for the benefit of Tower Health, formerly known as Reading Health System (the System“ ” or “Tower Health”), and certain of its affiliates that constitute the Obligated Group (defined herein) to refinance certain outstanding indebtedness, to finance certain capital expenditures of the Obligated Group and to pay certain costs of refinancing and costs of issuance of the Series 2017 Bonds, as described herein. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS” herein. The 2017 Bonds will be issued as described herein. The 2017 Bonds will bear interest at the rates and mature on the dates set forth on the inside cover. The principal or redemption price of the 2017 Bonds will be payable upon presentation and surrender thereof at the office of the Manufacturers and Traders Trust Company (the Bond“ Trustee”). Interest on the 2017 Bonds will be payable semiannually on May 1 and November 1 of each year, commencing May 1, 2018. So long as The Depository Trust Company, New York, New York (“DTC”) or its nominee, Cede & Co., is the registered owner of the 2017 Bonds, payments of the principal or redemption price of, and interest on, the 2017 Bonds will be made to DTC. Additional information concerning the terms of the 2017 Bonds is contained under the caption “DESCRIPTION OF THE 2017 BONDS” herein. The 2017 Bonds will be issued as fully registered bonds without coupons, and, when initially issued, will be registered in the name of Cede & Co., as registered owner and nominee for DTC. DTC will act as securities depository of the 2017 Bonds. Individual purchases will be made only in book-entry form, initially in denominations of $5,000 and in any integral multiple thereof. So long as Cede & Co., as nominee for DTC, is the registered owner of the 2017 Bonds, references herein to the Bondholders or registered owners (other than under the caption “CONTINUING DISCLOSURE” herein) shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the 2017 Bonds. The 2017 Bonds are issued and secured under the provisions of the Trust Indenture, dated as of October 1, 2017 (the “Bond Indenture”), by and between the Authority and the Bond Trustee. The 2017 Bonds are payable, in addition to the sources described herein, from loan repayments made by the System pursuant to the Loan Agreement (defined herein), between the Authority and the System and the System’s obligations under the Loan Agreement are evidenced and secured by the 2017 Master Note (defined herein), to be delivered under the terms of the Master Indenture (defined herein), by the Obligated Group. See Appendix C – “SUMMARY OF THE BOND INDENTURE AND THE LOAN AGREEMENT” and Appendix D – “SUMMARY OF THE MASTER INDENTURE” hereto. The 2017 Bonds are subject to optional, mandatory and extraordinary redemption prior to maturity as described herein. See “DESCRIPTION OF THE 2017 BONDS – Redemption Provisions” herein. THE 2017 BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY AND DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE COUNTY OF BERKS, THE COMMONWEALTH, OR ANY POLITICAL SUBDIVISION, AGENCY OR INSTRUMENTALITY THEREOF OTHER THAN THE AUTHORITY. NEITHER THE CREDIT NOR THE TAXING POWER OF ANY STATE OR ANY POLITICAL SUBDIVISION, AGENCY OR PUBLIC INSTRUMENTALITY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE 2017 BONDS. THE AUTHORITY HAS NO TAXING POWER AND IS NOT LIABLE FOR THE PAYMENT OF THE 2017 BONDS EXCEPT FROM THE SOURCES HEREIN DESCRIBED. This cover page contains information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. There are risks associated with an investment in the 2017 Bonds, some of which are outlined under the caption “BONDHOLDERS’ RISKS” herein. The 2017 Bonds are offered when, as and if issued by the Authority and received by the Underwriters, subject to prior sale and to approval of legality by Stevens & Lee, P.C., Reading, Pennsylvania, Bond Counsel; and to the approval of certain matters for the Authority by its counsel, Georgeadis Setley LLC, Wyomissing, Pennsylvania; for Tower Health and the Obligated Group by their counsel, Stevens & Lee, P.C., Reading, Pennsylvania; and for the Underwriters by their counsel, Kutak Rock LLP, Washington, D.C. H2C Securities Inc. served as financial advisor to the System and the Obligated Group in connection with the 2017 Bonds. It is expected that the 2017 Bonds in definitive form will be available for delivery to DTC in New York, New York on or about October 31, 2017. Citigroup Barclays The date of this Official Statement is October 17, 2017. $590,500,000 Berks County Industrial Development Authority Health System Revenue Bonds (Tower Health Project) Series of 2017 Serial Bonds Maturity Principal Interest (Nov. 1) Amount Rate Yield Price CUSIP† 2021 $1,770,000 5.000% 1.600% 113.123 08451PAA9 2022 3,040,000 5.000% 1.800% 115.235 08451PAB7 2023 5,945,000 5.000% 1.970% 117.067 08451PAC5 2024 6,490,000 5.000% 2.150% 118.429 08451PAD3 2025 7,035,000 5.000% 2.340% 119.304 08451PAE1 2026 7,610,000 5.000% 2.520% 119.858 08451PAF8 2027 8,215,000 5.000% 2.620% 120.818 08451PAG6 2028 8,885,000 5.000% 2.760%∗ 119.458 08451PAH4 2029 9,580,000 5.000% 2.880%* 118.306 08451PAJ0 2030 10,305,000 5.000% 2.940%* 117.736 08451PAK7 2031 11,005,000 4.000% 3.220%* 106.623 08451PAL5 2032 6,855,000 4.000% 3.340%* 105.571 08451PAM3 2033 7,570,000 4.000% 3.450%* 104.618 08451PAN1 2034 8,375,000 5.000% 3.200%* 115.300 08451PAP6 2035 9,675,000 5.000% 3.250%* 114.839 08451PAQ4 2036 10,735,000 5.000% 3.290%* 114.471 08451PAR2 2037 11,795,000 5.000% 3.320%* 114.196 08451PAS0 2038 12,800,000 4.000% 3.700%* 102.488 08451PAT8 2039 13,715,000 4.000% 3.730%* 102.236 08451PAU5 † Registered trademark of American Bankers Association. CUSIP data herein is provided by Standard and Poor’s CUSIP Service Bureau, a division of the McGraw Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP service. CUSIP numbers are provided for reference only. Neither the Authority, the Bond Trustee nor the Underwriters take any responsibility for the accuracy of such numbers. ∗ Yield to first optional redemption date of November 1, 2027. 4813-3569-3905.1 $43,185,000; 3.750%; Term Bond Due Nov. 1, 2042; Yield 3.920%; Price 97.306; CUSIP† 08451PAV3 $75,000,000; 4.000%; Term Bond Due Nov. 1, 2047; Yield 3.840%∗; Price 101.318; CUSIP† 08451PAW1 $121,320,000; 5.000%; Term Bond Due Nov. 1, 2047; Yield 3.490%*; Price 112.654; CUSIP† 08451PAX9 $25,000,000; 4.000%; Term Bond Due Nov. 1, 2050; Yield 3.900%*; Price 100.821; CUSIP† 08451PAZ4 $164,595,000; 5.000%; Term Bond Due Nov. 1, 2050; Yield 3.550%*; Price 112.116; CUSIP† 08451PAY7 † Registered trademark of American Bankers Association. CUSIP data herein is provided by Standard and Poor’s CUSIP Service Bureau, a division of the McGraw Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP service. CUSIP numbers are provided for reference only. Neither the Authority, the Bond Trustee nor the Underwriters take any responsibility for the accuracy of such numbers. ∗ Yield to first optional redemption date of November 1, 2027. iii 4813-3569-3905.1 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2017 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.