Aa3 BOOK-ENTRY ONLY Fitch: AA- See “RATINGS” Herein
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PRELIMINARY OFFICIAL STATEMENT DATED MAY 6, 2016 RATINGS NEW ISSUE Moody’s: Aa3 BOOK-ENTRY ONLY Fitch: AA- See “RATINGS” herein. In the opinion of Bond Counsel, under existing law, interest on the Tax-Exempt Series 2016A Bonds (defined below) is excludable from gross income for federal income tax purposes and the Tax-Exempt Series 2016A Bonds are “qualified 501(c)(3) bonds” under the Code (as defined herein), and interest on the Tax-Exempt Series 2016A Bonds will not be subject to the alternative minimum tax on individuals. See “TAX MATTERS—TAX-EXEMPT SERIES 2016A BONDS” herein for a discussion of Bond Counsel’s opinion, including a description of alternative minimum tax consequences for corporations. THE TAX-EXEMPT SERIES 2016A BONDS WILL NOT BE DESIGNATED AS “QUALIFIED TAX-EXEMPT OBLIGATIONS” FOR FINANCIAL INSTITUTIONS. $117,205,000* mstances shall this Preliminary Official Statement constitute constitute Statement Official Preliminary this shall mstances S OUTHERN SOUTHWEST HIGHER EDUCATION AUTHORITY, INC. M ETHODIST U NIVERSITY Higher Education Revenue Bonds (Southern Methodist University Project) ich such offer, solicitation or sale would be unlawful prior to registration or or to registration prior be unlawful would or sale solicitation offer, such ich Tax-Exempt Series 2016A Dated: Date of Delivery Due: October 1, as shown below The Southwest Higher Education Authority, Inc. (the “Issuer”) is offering $117,205,000* of its Higher Education Revenue Bonds (Southern Methodist University Project) Tax-Exempt Series 2016A (the “Tax-Exempt Series 2016A Bonds” and together with the Taxable Series 2016B Bonds, the “Series 2016 Bonds”). Interest on the Tax-Exempt Series 2016A Bonds accrues from the date of delivery and is payable on October 1, 2016, and semiannually on each April 1 and October 1 thereafter. The Tax-Exempt Series 2016A Bonds will be issued as fully registered bonds in denominations of $5,000 or integral multiples thereof and, when issued, 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 Tax-Exempt Series 2016A Bonds. So long as the book- entry system is in effect, purchases of beneficial ownership interests in the Tax-Exempt Series 2016A Bonds will be made in book-entry form only and purchasers will not receive certificates representing their interests in the Tax-Exempt Series 2016A Bonds purchased. Principal of, any redemption price for, and interest on the Tax-Exempt Series 2016A Bonds will be payable by The Bank of New York Mellon Trust Company, National Association (the “Trustee”) to the registered owners of the Tax-Exempt Series 2016A Bonds, initially to DTC, which in turn is to remit such payments to its participants for subsequent disbursement to beneficial owners. d herein are subject to completion or amendment. Under no circu no Under amendment. or completion to subject are herein d The Tax-Exempt Series 2016A Bonds are subject to optional and mandatory redemption prior to stated maturity, as described herein. See “THE SERIES 2016 BONDS—REDEMPTION” herein. The payment of the principal of, redemption premium, if any, and interest on the Tax-Exempt Series 2016A Bonds constitute limited obligations of the Issuer, payable solely from payments required to be made pursuant to the Loan Agreement (as amended) between the Issuer and Southern Methodist University (the “University”). The Loan Agreement is authenticated as urisdiction. j y a “Security” under a Master Indenture, described herein, which further secures the University’s obligations under the Loan Agreement. ______________________ CUSIP PREFIX: 845040 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on Page ii ______________________ BofA Merrill Lynch BOSC, Inc. A subsidiary of BOK Financial Corporation J.P. Morgan Wells Fargo Securities ualification under the securities law of an of law securities the under ualification This Preliminary Official Statement and the information containe information the and Statement Official Preliminary This in wh jurisdiction in any securities of these any sale be there nor shall to buy of an offer or a to sell solicitation an offer q * Preliminary, subject to change. NEITHER THE STATE OF TEXAS NOR ANY POLITICAL SUBDIVISION, OR AGENCY THEREOF, INCLUDING THE CITY OF UNIVERSITY PARK, TEXAS, IS OBLIGATED TO PAY THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE TAX-EXEMPT SERIES 2016A BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS, THE CITY OF UNIVERSITY PARK, TEXAS, OR ANY OTHER POLITICAL SUBDIVISION, OR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE TAX-EXEMPT SERIES 2016A BONDS. THE ISSUER HAS NO TAXING POWER. Tax-Exempt Series 2016A Bonds Maturity Schedule $117,205,000* Serial Bonds Due Interest Due Interest Oct. 1 Amount* Rate Yield CUSIPs(1) Oct. 1 Amount* Rate Yield CUSIPs(1) 2020 $7,925,000 2028 $7,460,000 2021 8,345,000 2029 7,400,000 2022 6,825,000 2030 3,125,000 2023 8,260,000 2031 3,260,000 2024 8,670,000 2032 3,400,000 2025 9,110,000 2033 3,725,000 2026 9,445,000 2034 3,860,000 2027 7,095,000 2035 4,005,000 $8,500,000* ______% Term Bonds due October 1, 2040 Price: _______% CUSIP No.(1)______ ___ $6,795,000* ______% Term Bonds due October 1, 2045 Price: _______% CUSIP No.(1)______ ___ THIS COVER PAGE CONTAINS INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT INTENDED AS A SUMMARY OF THIS TRANSACTION. INVESTORS ARE ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION. Separate Issues. The Tax-Exempt Series 2016A Bonds are being offered by the Issuer concurrently with the Issuer’s Higher Education Revenue Bonds (Southern Methodist University Project), Taxable Series 2016B (the “Taxable Series 2016B Bonds” and together with the Tax-Exempt Series 2016A Bonds, the “Series 2016 Bonds”), under a common Official Statement. The Tax-Exempt Series 2016A Bonds and the Taxable Series 2016B Bonds are separate and distinct securities offerings being issued and sold independently except for the common Official Statement, and while the Series 2016 Bonds share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including the type of obligation being offered, its terms for payment, the security for its payment, the rights of the holders, the tax status of its interest and other features. Concurrently with the issuance of the Series 2016 Bonds, the University and the Master Trustee will execute a First Supplemental Indenture to Master Indenture (the “First Supplement”). Pursuant to the First Supplement the limitations in the Master Indenture regarding the imposition of mortgages and other encumbrances on University properties are removed and the limitations on debt by the University are eliminated. The First Supplement will become effective upon the consent of holders of a majority of the principal amount of the “Securities” issued pursuant to the Master Indenture. Purchasers of the Series 2016 Bonds are deemed to have consented to the First Supplement. The Tax-Exempt Series 2016A Bonds are offered when, as and if issued and accepted by the Underwriters, subject to prior sale, withdrawal, or modification of the offer without notice and to the delivery of the approving opinion of Bracewell LLP, Bond Counsel, and the approval of the Attorney General of the State of Texas. Certain legal matters will be passed upon for the Issuer by Bond Counsel, for the University by its counsel, Paul J. Ward, General Counsel, Vice President for Legal Affairs and Government Relations and Secretary, and for the Underwriters by their counsel, McCall, Parkhurst & Horton L.L.P., Dallas, Texas. FirstSouthwest, a Division of Hilltop Securities, Inc. (“FirstSouthwest”) is serving as Financial Advisor to the University. It is expected that the Tax-Exempt Series 2016A Bonds will be delivered through the facilities of DTC on or about May 27, 2016. * Preliminary, subject to change. (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. PRELIMINARY OFFICIAL STATEMENT DATED MAY 6, 2016 RATINGS NEW ISSUE Moody’s: Aa3 BOOK-ENTRY ONLY Fitch: AA- See “RATINGS” herein. Interest on the Taxable Series 2016B Bonds (defined below) is not excludable from gross income for federal income tax purposes. See “TAX MATTERS-TAXABLE SERIES 2016B BONDS” herein. $25,290,000* S OUTHERN SOUTHWEST HIGHER EDUCATION AUTHORITY, INC. M ETHODIST U NIVERSITY Higher Education Revenue Bonds (Southern Methodist University Project) Taxable Series 2016B Dated: Date of Delivery Due: October 1, as shown below The Southwest Higher Education Authority, Inc. (the “Issuer”) is offering $25,290,000* of its Higher Education Revenue Bonds (Southern Methodist University Project), Taxable Series 2016B (the “Taxable Series 2016B Bonds” and together with the Tax-Exempt Series 2016A Bonds, the “Series 2016 Bonds”). Interest on the Taxable Series 2016B Bonds accrues from the date of delivery and is payable on October 1, 2016, and semiannually on each April 1 and October 1 thereafter. The Taxable Series 2016B Bonds will be issued as fully registered bonds in denominations of $5,000 or integral multiples thereof and, when issued, 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 Taxable Series 2016B Bonds. So long as the book-entry system is in effect, purchases of beneficial ownership interests in the Taxable Series 2016B Bonds will be made in book-entry form only and purchasers will not receive certificates representing their interests in the Taxable Series 2016B Bonds purchased.