The 2017 Bonds Are Limited Obligations of the Authority, Payable Solely from the Trust Estate
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NEW ISSUE—BOOK ENTRY ONLY RATINGS: Moody’s: A1 S&P: A+ Fitch: AA- (See “RATINGS” herein) In the opinion of Bond Counsel, under existing law and assuming continuing compliance by the Pennsylvania Economic Development Financing Authority (the “Authority”) and UPMC (the “Corporation”) with certain covenants related to the Internal Revenue Code of 1986, as amended (the “Code”), interest on the 2017A Bonds (including any original issue discount properly allocable to an owner thereof) is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax; however, interest with respect to the 2017A Bonds may be taken into account in determining “adjusted current earnings” for purposes of computing the alternative minimum tax on certain corporations. Bond Counsel’s opinion assumes compliance by the Authority and the Corporation with all requirements of the Code that must be satisfied subsequent to the issuance of the 2017A Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. Interest on the 2017B Bonds is not excluded from gross income for federal tax purposes. Furthermore, in the opinion of Bond Counsel, the 2017 Bonds are exempt from personal property taxes in Pennsylvania and the interest on the 2017 Bonds is exempt from Pennsylvania corporate net income tax and personal income tax. See “TAX EXEMPTION AND OTHER TAX MATTERS”. $536,745,000 PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY UPMC REVENUE BONDS, SERIES 2017 consisting of $436,745,000 Series 2017A $100,000,000 Series 2017B (Federally Taxable) DATED: Date of Delivery MATURITY: November 15, as shown herein The UPMC Revenue Bonds, Series 2017 (the “2017 Bonds”), being issued by the Pennsylvania Economic Development Financing Authority (the “Authority”), will be issued as fully registered bonds and initially registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York, which will act as securities depository therefor. Purchasers will not receive certificates representing their ownership interest in the 2017 Bonds. So long as Cede & Co. is the registered owner, as nominee of DTC, references herein to “Owners”, “registered owners” or “Bondholders” shall mean Cede & Co., as aforesaid, and shall not mean the beneficial owners of the 2017 Bonds. Beneficial ownership of the 2017 Bonds may be acquired in denominations of $5,000 and any multiple thereof. Principal of and interest on the 2017 Bonds will be paid by The Bank of New York Mellon Trust Company, N.A., Pittsburgh, Pennsylvania, as trustee and paying agent (the “Bond Trustee”). So long as DTC or its nominee, Cede & Co., is the registered owner, such payments will be made directly to Cede & Co. Disbursements of such payments to the DTC Participants are the responsibility of DTC and disbursements of such payments to the beneficial owners are the responsibility of the DTC Participants and the Indirect Participants, as more fully described herein. Interest will be payable semiannually on each May 15 and November 15, commencing May 15, 2018, by check mailed to the registered owners as of the close of business on the applicable record date preceding each Interest Payment Date. The 2017 Bonds are subject to redemption prior to maturity as set forth herein. The 2017 Bonds will be issued pursuant to a Trust Indenture, dated as of October 1, 2017 (the “Bond Indenture”), between the Authority and the Bond Trustee. The principal of, premium, if any, and interest on the 2017 Bonds will be payable solely from, and secured by, the Authority’s pledge and assignment to the Bond Trustee of the Trust Estate, which includes payments to be made under a Loan Agreement, dated as of October 1, 2017 (the “Loan Agreement”), between the Authority and UPMC (the “Corporation”), a Pennsylvania nonprofit corporation. The payment obligations of the Corporation under the Loan Agreement will be evidenced and secured by, among other things, a promissory note (the “2017 MTI Note”) issued by the Corporation to the Authority and assigned to the Bond Trustee, pursuant to the terms of a Master Trust Indenture, dated as of May 1, 2007, as supplemented (the “Master Indenture”), between the Corporation and The Bank of New York Mellon Trust Company, N.A., as master trustee. The Corporation, UPMC Presbyterian Shadyside, Magee-Womens Hospital of UPMC, UPMC Passavant and UPMC St. Margaret are all of the members of the obligated group under the Master Indenture (the “Obligated Group”). Under the Master Indenture, the 2017 MTI Note will be an obligation secured by a pledge of the Obligated Group’s gross revenues. THE 2017 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY FROM THE TRUST ESTATE. NEITHER THE COMMONWEALTH OF PENNSYLVANIA NOR ANY POLITICAL SUBDIVISION THEREOF IS OBLIGATED TO PAY THE PRINCIPAL OR REDEMPTION PRICE OF OR THE INTEREST ON THE 2017 BONDS, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE 2017 BONDS. THE AUTHORITY HAS NO TAXING POWER. The 2017 Bonds are offered when, as and if issued by the Authority and accepted by the Underwriters, subject to prior sale, withdrawal or modification of the offer without notice, and simultaneous delivery of the approving legal opinion of Campbell & Levine, LLC, Pittsburgh, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the Authority by the Office of Chief Counsel, Pennsylvania Department of Community and Economic Development; for the Corporation by its special counsel, Eckert Seamans Cherin & Mellott, LLC, Pittsburgh, Pennsylvania; and for the Underwriters by their counsel, Kutak Rock LLP, Philadelphia, Pennsylvania. It is expected that the 2017 Bonds will be available for delivery on or about October 11, 2017. This cover page is for quick reference only and does not summarize the issue. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. Capitalized terms used above and not otherwise defined have the meanings ascribed to them herein. RBC Capital Markets† Wells Fargo Securities‡ PNC Capital Markets LLC BNY Mellon Capital Markets, LLC Huntington Capital Markets Dated: September 27, 2017 † Series 2017A Bonds Senior Manager ‡ Series 2017B Bonds Senior Manager $536,745,000 PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY UPMC REVENUE BONDS, SERIES 2017 consisting of $436,745,000 UPMC REVENUE BONDS, SERIES 2017A MATURITIES, PRINCIPAL AMOUNTS, COUPONS, PRICES, YIELDS AND CUSIPS $268,755,000 2017A Serial Bonds Maturity Principal (November 15) Amount Coupon Yield Price CUSIP* 2018 $ 8,530,000 4.000% 0.980% 103.278 70870JAA6 2019 8,880,000 4.000% 1.120% 105.944 70870JAB4 2020 9,240,000 4.000% 1.250% 108.320 70870JAC2 2021 9,620,000 4.000% 1.410% 110.268 70870JAD0 2022 10,010,000 4.000% 1.600% 111.695 70870JAE8 2023 10,475,000 5.000% 1.780% 118.517 70870JAF5 2024 11,010,000 5.000% 1.970% 119.968 70870JAG3 2025 9,145,000 5.000% 2.170% 120.902 70870JAH1 2025 2,395,000 2.125% 2.170% 99.666 70870JAJ7 2026 12,095,000 5.000% 2.340% 121.674 70870JAK4 2027 12,715,000 5.000% 2.490% 122.279 70870JAL2 2028 13,370,000 5.000% 2.650%** 120.692 70870JAM0 2029 14,055,000 5.000% 2.760%** 119.615 70870JAN8 2030 14,775,000 5.000% 2.830%** 118.935 70870JAP3 2031 7,960,000 5.000% 2.890%** 118.357 70870JAQ1 2031 7,500,000 3.125% 3.330% 97.706 70870JAR9 2032 11,140,000 5.000% 2.960%** 117.686 70870JAS7 2032 5,000,000 3.375% 3.430% 99.353 70870JAT5 2033 16,785,000 3.375% 3.520% 98.227 70870JAU2 2034 17,415,000 4.000% 3.440%** 104.739 70870JAV0 2035 18,130,000 4.000% 3.500%** 104.218 70870JAW8 2036 18,870,000 4.000% 3.560%** 103.701 70870JAX6 2037 19,640,000 4.000% 3.600%** 103.357 70870JAY4 $110,890,000 4.00% Term Bond Due November 15, 2042 – Priced at 102.251 to Yield 3.730%** CUSIP* 70870JAZ1 $57,100,000 4.00% Term Bond Due November 15, 2047 – Priced at 101.660 to Yield 3.800%** CUSIP* 70870JBA5 $100,000,000* UPMC REVENUE BONDS, SERIES 2017B (FEDERALLY TAXABLE) MATURITIES, PRINCIPAL AMOUNTS, COUPONS, PRICES, YIELDS AND CUSIPS $100,000,000 2017B Serial Bonds Maturity Principal (November 15) Amount Coupon Yield Price CUSIP* 2018 $ 1,905,000 1.680% 1.680% 100.000 70870JBB3 2019 2,220,000 1.917% 1.917% 100.000 70870JBC1 2020 2,260,000 2.153% 2.153% 100.000 70870JBD9 2021 2,310,000 2.352% 2.352% 100.000 70870JBE7 2022 2,360,000 2.552% 2.552% 100.000 70870JBF4 2023 2,420,000 2.731% 2.731% 100.000 70870JBG2 2024 2,485,000 2.981% 2.981% 100.000 70870JBH0 2025 2,555,000 3.051% 3.051% 100.000 70870JBJ6 2026 2,630,000 3.151% 3.151% 100.000 70870JBK3 2027 78,855,000 3.201% 3.201% 100.000 70870JBL1 *The CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Authority, the Corporation or the Underwriters, 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 refunding or defeasance of such issue or the use of secondary market financial products.