Massachusetts Water Resources Authority, Massachusetts
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PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 1, 2011 NEW ISSUE Ratings† In the opinion of Bond Counsel, under existing law and assuming continued compliance with the Internal Revenue Code of 1986, as amended, interest on the Series 2011 Bonds is not included in gross income for federal income tax purposes and is not an item of tax preference for the purpose of computing the alternative minimum tax imposed on individuals and corporations, although such interest will be taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed upon certain corporations. In the opinion of Bond Counsel, the Series 2011 Bonds, their transfer and the income therefrom, including any profit made on the sale thereof, are exempt from Massachusetts personal income taxes and the Series 2011 Bonds are exempt from Massachusetts personal property tax. For federal and Massachusetts tax purposes, interest includes original issue discount. See “Tax Exemption” herein. Massachusetts Water Resources Authority $333,680,000* General Revenue Refunding Bonds, 2011 Series C Dated: Date of Initial Delivery Due: August 1, as shown on the inside cover The Series 2011 Bonds will be issued as fully registered bonds in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York. Purchases of the Series 2011 Bonds will be made in book-entry form only, in the denominations of $5,000 or any integral multiple thereof, and no physical delivery of the Series 2011 Bonds will be made to purchasers. So long as Cede & Co. is the registered owner of the Series 2011 Bonds, principal and interest on the Series 2011 Bonds are payable to DTC by U.S. Bank National Association, as Trustee. See “The Series 2011 Bonds – Book-Entry-Only System.” The Series 2011 Bonds will bear interest at the fixed rates and mature in the years and in the principal amounts set forth on the inside cover hereof. Interest on the Series 2011 Bonds will accrue from their date of delivery and will be payable on February 1 and August 1, commencing on February 1, 2012. The Series 2011 Bonds will be subject to optional and mandatory redemption prior to maturity, including redemption at par in circumstances as more fully described herein. The Series 2011 Bonds will constitute general obligations of the Massachusetts Water Resources Authority (the “Authority”). In addition, the Series 2011 Bonds will be secured by a lien on and pledge of certain revenues and other moneys of the Authority, as described herein. Neither The Commonwealth of Massachusetts (the “Commonwealth”) nor any political subdivision thereof shall be obligated to pay the principal of, premium, if any, or interest on any Series 2011 Bond, and neither the faith and credit nor the taxing power of the Commonwealth or any political subdivision thereof is pledged to such payment. The Authority has no taxing power. The Series 2011 Bonds are offered when, as and if issued by the Authority and received by the Underwriters, subject to the approval of legality by McCarter & English, LLP, Boston, Massachusetts, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the Authority by its Disclosure Counsel, Greenberg Traurig, LLP, Boston, Massachusetts, and for the Underwriters by their counsel, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, Massachusetts. Delivery of the Series 2011 Bonds to DTC or its custodial agent is expected in New York, New York on or about December __, 2011. BofA Merrill Lynch Barclays Capital Citigroup J.P. Morgan Jefferies & Company Fidelity Capital Markets Janney Montgomery Scott Morgan Stanley Ramirez & Co., Inc. Wells Fargo Securities November __, 2011 † See, “Ratings” herein. date the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction any in securities of these sale any be there shall nor buy, This Preliminary TheOfficialbuy securities be Statement toaccepted and prior the informationdescribed contained not offers to herein be to aresold hereinthe subjectnor may tomay completion, amendment or other change without notice. offer an of solicitation or the to sell offer an constitute Statement Official Preliminary this shall circumstances no Under form. final in delivered is Statement Official the date such jurisdiction. prior of any or qualification under the securities to registration be unlawful laws solicitation or sale would in which such offer, * Preliminary, subject to change. $333,680,000* Massachusetts Water Resources Authority General Revenue Refunding Bonds, 2011 Series C Maturities, Amounts, Rates and Yields Maturity* Interest Price/ * † (August 1) Amount Rate Yield CUSIP 2018 $30,000,000 2021 1,850,000 2022 15,845,000 2023 31,385,000 2024 38,535,000 2025 40,465,000 2026 25,560,000 2027 11,875,000 2028 12,470,000 2029 13,090,000 2030 13,745,000 2031 14,435,000 2032 15,155,000 $69,270,000* ___% Term Bonds Due August 1, 2042* to Yield ___% _________________ * Preliminary, subject to change. † The CUSIP numbers have been assigned by an independent company not affiliated with the Authority and are included solely for the convenience of the holders of the Series 2011 Bonds. None of the Authority, the Trustee of the Underwriters are responsible for the selection or uses of the CSUIP numbers, and no representation is made as to their correctness on the Series 2011 Bonds or as indicated above. The CUSIP numbers are subject to being changed after the issuance or the Series 2011 Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the Series 2011 Bonds as a result or the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of the Series 2011 Bonds. The information set forth herein has been obtained from the Authority, The Depository Trust Company and other sources that are deemed to be reliable but, as to information from sources other than the Authority, it is not to be construed as a representation of the Authority. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the Series 2011 Bonds shall under any circumstances create any implication that there has been no change in the affairs of the Authority since the date hereof. 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 responsibilities 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. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representation other than as contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority. 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 Series 2011 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The Underwriters may offer and sell the Series 2011 Bonds to certain dealers (including dealers depositing the Series 2011 Bonds into investment trusts) and certain dealer banks and banks acting as agents at prices lower or yields higher than the public offering prices or yields stated on the inside cover page hereof and said offering prices or yields may be changed from time to time by the Underwriters. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS TO STABILIZE OR MAINTAIN THE MARKET PRICES OR YIELDS OF THE SERIES 2011 BONDS AT A LEVEL ABOVE THAT WHICH MAY OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. i TABLE OF CONTENTS Page Page INTRODUCTION ................................................................ 1 MANAGEMENT’S REVIEW OF OPERATING THE SERIES 2011 BONDS ................................................. 3 RESULTS ............................................................................ 39 GENERAL ........................................................................ 3 HISTORICAL REVENUES, EXPENSES AND REDEMPTION ................................................................. 4 FUND DEPOSITS........................................................... 39 BOOK-ENTRY-ONLY SYSTEM ................................... 5 FISCAL YEAR 2007 ...................................................... 40 EXCHANGE AND TRANSFER ..................................... 6 FISCAL YEAR 2008 ...................................................... 41 APPLICATION OF SERIES 2011 BOND FISCAL YEAR 2009 ...................................................... 41 PROCEEDS AND OTHER MONEYS ................................. 7 FISCAL YEAR 2010 ...................................................... 42 GENERAL ........................................................................ 7 FISCAL YEAR 2011 CURRENT EXPENSE PLAN OF REFUNDING .....................................................