Citi J.P. Morgan Dated: May 11, 2010
Total Page:16
File Type:pdf, Size:1020Kb
NEW ISSUE – Book-Entry Only Ratings: See “RATINGS” herein In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the District, interest on the 2010A Bonds is not excluded from gross income for federal income tax purposes under Section 103 of the Code. In the opinion of Bond Counsel to the District, based on an analysis of existing laws, regulations, rulings and court decisions and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the 2010B Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986. In the further opinion of Bond Counsel, interest on the 2010B Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, nor is interest on the 2010B Bonds included in adjusted current earnings when calculating corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the 2010 Bonds. See “TAX MATTERS” herein. $135,070,000 PUBLIC UTILITY DISTRICT NO. 1 OF SNOHOMISH COUNTY, WASHINGTON ELECTRIC SYSTEM REVENUE BONDS $128,075,000 SERIES 2010A $6,995,000 SERIES 2010B TAXABLE BUILD AMERICA BONDS (DIRECT PAY) Dated: Date of Delivery Due: As shown on the inside front cover. The Electric System Revenue Bonds, Series 2010A Taxable Build America Bonds (Direct Pay) (the “2010A Bonds”) and Series 2010B (the “2010B Bonds” and together with the 2010A Bonds, the “2010 Bonds”) of Public Utility District No. 1 of Snohomish County, Washington (the “District”) will be issued as fixed rate bonds maturing in the amounts and bearing interest at the rates set forth on the inside front cover of this Official Statement, payable June 1 and December 1 of each year, commencing December 1, 2010. When issued, the 2010 Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the 2010 Bonds. Individual purchases will be made in book-entry form in authorized denominations, and purchasers of the 2010 Bonds will not receive certificates representing their interests in the 2010 Bonds. Payments of principal of and interest on the 2010 Bonds are to be paid to purchasers by DTC through DTC Participants, as described in APPENDIX E-“BOOK-ENTRY SYSTEM.” The District has appointed U.S. Bank National Association to act as Stand-by Trustee upon the occurrence of an Event of Default. See “SECURITY FOR THE 2010 BONDS—Stand-by Trustee.” The District intends to appoint the Stand-by Trustee as Bond Registrar and Paying Agent for the 2010 Bonds. The District will designate the 2010A Bonds as “Build America Bonds” under the provisions of the American Recovery and Reinvestment Act of 2009 (the “ARRA”). The interest on the 2010A Bonds is not excluded from gross income for purposes of federal income tax. See “TAX MATTERS.” The 2010A Bonds are subject optional and mandatory redemption prior to maturity, as described herein. The 2010 Bonds are being issued (i) to finance additions, betterments and improvements to and renewals, replacements and extensions of the Electric System, (ii) to fund the Debt Service Reserve Account and (iii) and to pay costs of issuing the 2010 Bonds. See “PURPOSE AND APPLICATION OF 2010 BOND PROCEEDS.” The 2010 Bonds are special limited obligations of the District payable from and secured solely by the Electric System Revenues, subject to the prior payment of Operating Expenses of the Electric System. The 2010 Bonds are secured by a pledge of and lien and charge on Electric System Revenues equal to the pledge of and lien and charge on Electric System Revenues that secure the Senior Electric System Bonds heretofore and hereafter issued pursuant to the Senior Electric System Bond Resolution (as defined herein) and any Parity Lien Obligations. The District has covenanted in the Generation System Bond Resolution (as defined herein) to cause the Generation System to sell and the Electric System to purchase in each month all of the electric power and energy of the Generation System available in such month for use in the Electric System. Payment for such electric power and energy must be made at the times and in the amounts sufficient for the timely payment of all costs of the Generation System (as further defined herein, the “Generation System Power Costs”), including debt service on the Generation System Bonds, as the same shall become due. The District is obligated to pay Generation System Power Costs (i) as Operating Expenses of the Electric System for any month in which any power and energy from the Generation System was made available to the Electric System (regardless of whether or not the Electric System actually scheduled or received any such power or energy) and (ii) at all other times on a parity with the Senior Electric System Bonds outstanding from time to time, including the 2010 Bonds. See “SECURITY FOR THE 2010 BONDS.” MATURITY SCHEDULE — See Inside Front Cover The 2010 Bonds shall not in any manner or to any extent constitute general obligations of the District or of the State of Washington, or of any political subdivision of the State of Washington, or a charge upon any general fund or upon any money or other property of the District or of the State of Washington, or of any political subdivision of the State of Washington, not specifically pledged thereto by the Senior Electric System Bond Resolution, nor shall the full faith and credit of the District or of the State of Washington, or of any political subdivision of the State of Washington, be pledged tothe payment of principal, premium, if any, or interest on the 2010 Bonds. This cover page is not intended to be a summary of all of the terms of, or security for, the 2010 Bonds. Investors are advised to read the entire Official Statement to obtain information essential to making an informed investment decision. The 2010 Bonds are offered when, as and if issued and received by the Underwriters, subject to the approval of legality by Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the District, and certain other conditions. Certain legal matters will be passed upon for the District by its General Counsel, Anne Spangler. Certain legal matters will be passed upon for the Underwriters by their counsel, Foster Pepper PLLC, Seattle, Washington. It is expected that delivery of the 2010 Bonds will be made through DTC in New York, New York, by Fast Automated Securities Transfer (FAST), on or about May 25, 2010. Citi J.P. Morgan Dated: May 11, 2010 MATURITY SCHEDULE $135,070,000 PUBLIC UTILITY DISTRICT NO. 1 OF SNOHOMISH COUNTY, WASHINGTON ELECTRIC SYSTEM REVENUE BONDS $128,075,000 SERIES 2010A TAXABLE BUILD AMERICA BONDS (DIRECT PAY) $12,080,000 Serial Bonds Maturity Date Principal Interest CUSIP December 1 Amount Rate Price No. 833102** 2017 $1,340,000 3.735% 100% WW2 2018 3,025,000 4.154 100 WX0 2019 3,130,000 4.254 100 WY8 2020 645,000 4.404 100 WZ5 2021 1,170,000 4.554 100 XA9 2022 1,550,000 4.754 100 XB7 2023 1,220,000 4.904 100 XC5 $115,995,000 Term Bonds $29,565,000 5.580% 2010A Term Bonds due December 1, 2029, Priced to yield 5.588% CUSIP No. 833102XD3** $86,430,000 5.630% 2010A Term Bonds due December 1, 2035, Priced to yield 5.638% CUSIP No. 833102XE1** $6,995,000 SERIES 2010B $6,995,000 Serial Bonds Maturity Date Principal Interest CUSIP No. December 1 Amount Rate Yield 833102** 2013 $3,375,000 3.000% 1.540% XH4 2014 3,620,000 3.000 1.950 XJ0 **CUSIP numbers are provided by CUSIP Global Services, managed on behalf of the American Bankers Association by Standard & Poor’s. CUSIP® is a registered trademark of the American Bankers Association. The CUSIP numbers are not intended to create a database and do not serve in any way as a substitute for CUSIP service. CUSIP numbers are provided for convenience and reference only and are subject to change. Neither the District nor the Underwriter takes responsibility for the accuracy of the CUSIP numbers. No dealer, broker, salesperson or other person has been authorized by the District or the Underwriters to give any information or to make any representations other than those contained in this Official Statement in connection with the offering of the 2010 Bonds and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2010 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been provided by the District or obtained by the District from other sources which the District believes to be reliable, but it is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriters. The information herein is subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District since the date hereof. In connection with the offering of the 2010 Bonds, the Underwriters may overallot or effect transactions which stabilize or maintain the market price of the 2010 Bonds at levels above that which might otherwise prevail in the open market.