3280000 BOROUGH of AMBRIDGE WATER AUTHORITY Beaver County, Pennsylvania Water Revenue Bonds, Series of 2014
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NEW ISSUE: BOOK-ENTRY ONLY Bond Rating S&P “AA-” (Stable Outlook) (AGM Insured) S&P “A+” (Stable Outlook) (Underlying) (See “Bond Rating” herein) In the opinion of Bond Counsel, under existing law and assuming continuing compliance by the Authority with certain covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and any applicable regulations thereunder, the interest on and properly allocated accruals of original issue discount with respect to the 2014 Bonds are excluded from gross income for Federal income tax purposes and are not items of tax preference for purposes of the Federal Alternative Minimum Tax imposed on individuals and corporations; however (i) with respect to corporations such interest and accruals are taken into account in determining adjusted current earnings for purposes of computing the Alternative Minimum Tax in accordance with Section 55 of the Code and (ii) with respect to foreign corporations interest on the 2014 Bonds could be subject to a branch profits tax. See “Federal Tax Matters” herein for a brief description of these provisions. In the opinion of Bond Counsel, interest on the 2014 Bonds is exempt under present statutory and case law from the Pennsylvania Corporate Net Income Tax and from personal income taxation by the Commonwealth of Pennsylvania, or by any of its political subdivisions, and the 2014 Bonds are likewise exempt from Pennsylvania personal property taxes. (See “State Tax Matters” herein.) The Authority has designated each of the 2014 Bonds as a “qualified tax exempt obligation” for purposes of Section 265 of the Code (relating to deduction of interest expense allocable to tax exempt obligations held by certain financial institutions), and in the opinion of Bond Counsel the 2014 Bonds are “qualified tax-exempt obligations” within the meaning of said Section 265. $3,280,000 BOROUGH OF AMBRIDGE WATER AUTHORITY Beaver County, Pennsylvania Water Revenue Bonds, Series of 2014 Dated: Date of Delivery Due: November 15, as shown on the inside front cover The Water Revenue Bonds, Series of 2014 (the “2014 Bonds”), are being issued by the Borough of Ambridge Water Authority (the “Authority”) as fully registered The Water Revenue Bonds, Series of 2014 (the “2014 Bonds”), are being issued by the Borough of Ambridge Water Authority (the “Authority”) as fully registered bonds, without coupons, in denominations of $5,000 or in any integral multiple thereof within a maturity. Interest on the 2014 Bonds will be payable on May 15 and November 15 in each year, commencing with the payment due on May 15, 2014. The principal of and interest on the 2014 Bonds will be payable at the Designated Corporate Trust Office (hereinafter defined) of U.S. Bank National Association (the “Trustee”). Provided, however, that the regularly scheduled installments of interest on the 2014 Bonds will be paid, when due, by check or draft mailed to the persons who were the registered owners of the applicable 2014 Bonds as of the Regular Record Dates (hereinafter defined) corresponding to the applicable interest payment dates. The principal of the 2014 Bonds is payable when due to the registered owners thereof upon due presentation and surrender of the applicable 2014 Bonds. The transfer of 2014 Bonds will be registered at the Designated Corporate Trust Office of the Trustee. The 2014 Bonds will be initially issued and distributed under a book-entry-only system operated by The Depository Trust Company (“DTC”), and will be registered in the name of CEDE & Co., as sole registered owner thereof and nominee for DTC, Under this system (the “DTC Book-Entry-Only System”), DTC will act as securities depository for the 2014 Bonds and individual purchasers of book-entry interests in the 2014 Bonds will not receive Authority-issued certificates representing their ownership interest in the 2014 Bonds. So long as CEDE & Co., as nominee of DTC, is the sole registered owner of the 2014 Bonds and the DTC Book-Entry-Only system is in effect for the 2014 Bonds, references herein to 2014 Bondholders and holders or owners of the 2014 Bonds should be taken in all cases to mean the owners of book-entry interests in the 2014 Bonds and not the actual holder and registered owner of the 2014 Bonds, CEDE & Co., or DTC, and each such Bondholder must maintain an account with a DTC Direct or Indirect Participant in order to receive principal or interest payments made in respect of its ownership of beneficial interest in the 2014 Bonds. See “BOOK-ENTRY-ONLY SYSTEM” herein. MATURITY SCHEDULE (See Inside Front Cover) Redemption: The 2014 Bonds are subject to redemption prior to maturity as more fully set forth herein. Security: The 2014 Bonds will be issued under and secured pursuant to the terms of the Indenture hereinafter described. THE 2014 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE NET RECEIPTS AND REVENUES PLEDGED UNDER THE INDENTURE. NEITHER THE CREDIT NOR THE TAXING POWER OF THE BOROUGH OF AMBRIDGE, THE COUNTY OF BEAVER, THE COMMONWEALTH OF PENNSYLVANIA OR OF ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE 2014 BONDS. THE AUTHORITY HAS NO TAXING POWER. Bond Insurance: The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY MUNICIPAL CORP. The 2014 Bonds are offered, subject to prior sale, withdrawal or modification, when, as and if issued and received by the Underwriter and subject to the approving legal opinion of the Law Offices of Wayne D. Gerhold, Pittsburgh, Pennsylvania, Bond Counsel, to be furnished upon delivery of the 2014 Bonds. Certain legal matters will be passed upon for the Authority by Sainovich, Santicola & Steele P.C., Beaver, Pennsylvania, Solicitor to the Authority. CIM Investment Management, Inc., Pittsburgh, Pennsylvania, is serving as Financial Advisor to the Authority in connection with the issuance of the Bonds. The 2014 Bonds are expected to be delivered on or about February 18, 2014. The date of this Official Statement is January 14, 2014 $3,280,000 BOROUGH OF AMBRIDGE WATER AUTHORITY Beaver County, Pennsylvania Water Revenue Bonds, Series of 2014 MATURITY SCHEDULE Dated: Date of Delivery Due: November 15 as shown below Interest Payable May 15 and November 15, beginning May 15, 2014 Annual Principal Interest Year Amount Rate Price* 2015 $ 20,000 0.750% 100.000% 2016 20,000 2.000 102.697*** 2017 20,000 2.000 102.732*** 2018 20,000 2.000 101.589*** 2019 35,000 2.000 99.729** 2020 250,000 2.350 99.626** 2021 250,000 2.750 99.651** 2022 260,000 3.000 99.236** 2023 265,000 3.250 100.000 2024 275,000 3.250 98.922** 2025 285,000 3.500 99.234** 2026 295,000 3.625 99.038** 2027 305,000 3.750 98.936** 2029 645,000 4.000 99.417** 2030 335,000 4.000 98.197** * Accrued interest, if applicable, to be added. ** Original issue discount bonds (See "ORIGINAL ISSUE DISCOUNT BONDS" herein). *** Original issue premium bonds (See "PREMIUM BONDS" herein). - i - BOROUGH OF AMBRIDGE WATER AUTHORITY 600 11th Street Ambridge, Pennsylvania AUTHORITY BOARD MEMBERS David L. Bell, Chairman Chris J. Fontana, Vice Chairman Edward J. Dzubak, Director Thomas Klinsky, Director Richard Michalik, Director Mary W. Hrotic, Board Secretary/Treasurer/General Manager AUTHORITY SOLICITOR Sainovich, Santicola & Steele P.C. Beaver, Pennsylvania AUTHORITY CONSULTING ENGINEER NIRA Consulting Engineers, Inc. Coraopolis, Pennsylvania BOND COUNSEL Law Offices of Wayne D. Gerhold Pittsburgh, Pennsylvania TRUSTEE, PAYING AGENT, REGISTRAR AND ESCROW AGENT U.S. Bank National Association Pittsburgh, Pennsylvania UNDERWRITER Janney Montgomery Scott LLC Pittsburgh, Pennsylvania FINANCIAL ADVISOR CIM Investment Management, Inc. Pittsburgh, Pennsylvania - ii - Assured Guaranty Municipal Corp (“AGM”) makes no representation regarding the 2014 Bonds or the advisability of investing in the 2014 Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading “Bond Insurance” on the front cover hereof and in Appendix E to this Official Statement, and in the Specimen Municipal Bond Insurance Policy reproduced in Appendix F to this Official Statement. THE INFORMATION SET FORTH HEREIN HAS BEEN OBTAINED BY THE BOROUGH OF AMBRIDGE WATER AUTHORITY, BEAVER COUNTY, PENNSYLVANIA (THE "ISSUER") FROM ITS OWN RECORDS OR FROM OTHER SOURCES IT BELIEVES TO BE RELIABLE BUT IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS BY, AND IS NOT TO BE CONSTRUED AS A REPRESENTATION OR WARRANTY OF, THE ISSUER. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE 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 ISSUER OR ANY OTHER ENTITY PROVIDING SUBSTANTIAL SECURITY PLEDGED TO THE 2014 BONDS SINCE THE DATE HEREOF. IN ACCORDANCE WITH ITS RESPONSIBILITIES UNDER THE FEDERAL SECURITIES LAWS, THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT BUT DOES NOT GUARANTEE ITS ACCURACY OR COMPLETENESS. THIS OFFICIAL STATEMENT, INCLUDING THE FRONT COVER AND OTHER FRONTISPAGES HEREOF AND THE APPENDICES ATTACHED HERETO (IF ANY), DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITY OTHER THAN THE BONDS SPECIFICALLY OFFERED HEREBY. NO DEALER, BROKER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED BY THE ISSUER OR THE UNDERWRITER TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EITHER OF THE FOREGOING.