Massachusetts Institute of Technology and References to “Bonds” Or “Securities” Mean the Bonds Offered Hereby
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PRELIMINARY OFFERING MEMORANDUM DATED JULY 22, 2016 NEW ISSUE – BOOK-ENTRY ONLY $500,000,000* MASSACHUSETTS INSTITUTE OF TECHNOLOGY Taxable Bonds, Series E ____%* Bonds, due __________* Issue Price: ___%* CUSIP No. ___________+ Interest payable: January 1 and July 1 Dated: Date of Delivery The Massachusetts Institute of Technology Taxable Bonds, Series E (the “Bonds”), will be issued pursuant to the terms of an Indenture of Trust, dated as of August 1, 2016 (the “Indenture”), by and between the Massachusetts Institute of Technology (the “Institution”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The proceeds of the Bonds will be used by the Institution to support current or future capital projects consistent with the Institution’s capital plan and to pay costs of issuance. The Bonds will be issued in fully registered form in denominations of $1,000 and any integral multiple thereof and, when issued, will be registered under a global book-entry system in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Individual purchases will be made in book-entry form only, in principal amounts of $1,000 and any integral multiple thereof. Purchasers of the Bonds will not receive physical certificates (except under certain circumstances described in the Indenture) representing their ownership interests in the Bonds purchased. Interest on the Bonds will be payable on January 1 and July 1 of each year, commencing on January 1, 2017. So long as the Bonds are held by DTC, the principal or Redemption Price (as defined herein) of and interest on the Bonds will be payable by wire transfer to DTC, which in turn is required to remit such principal or Redemption Price and interest to the DTC Participants for subsequent disbursement to the Beneficial Owners of the Bonds, as more fully described in “BOOK-ENTRY ONLY SYSTEM AND GLOBAL CLEARANCE PROCEDURES” herein. The Bonds are subject to optional redemption prior to their stated maturity as described herein. See “THE BONDS – Redemption” herein. Interest, Redemption Price and profit, if any, on the sale of the Bonds, are not excludable from gross income for federal or state income tax purposes. See “TAX MATTERS” herein. The Bonds constitute unsecured general obligations of the Institution. The Institution has other unsecured general obligations outstanding. See APPENDIX B – “REPORT OF THE TREASURER FOR THE YEAR ENDED JUNE 30, 2015” attached hereto. Moreover, the Institution is not restricted by the Indenture or otherwise from incurring additional indebtedness. Such additional indebtedness, if issued, may be either secured or unsecured and may be entitled to payment prior to payment on the Bonds. See “SECURITY FOR THE BONDS” herein. This cover page contains certain information for quick reference only. It is not intended to be a summary of this issue. Investors must read the entire Offering Memorandum to obtain information essential to the making of an informed investment decision. The Bonds are offered by the Underwriters, when, as and if issued by the Institution and accepted by the Underwriters, subject to the approval of legality by Nixon Peabody LLP, Boston, Massachusetts, counsel to the Institution. In addition, certain other legal matters will be passed upon for the Underwriters by their counsel, Orrick, Herrington & Sutcliffe LLP, New York, New York. It is expected that the Bonds will be available for delivery to DTC in New York, New York on or about August __, 2016. J.P. Morgan Barclays July __, 2016 * Preliminary, subject to change. + CUSIP is a registered trademark of the American Bankers Association. CUSIP Global Services is managed on behalf of the American Bankers Association by S&P Capital IQ, a business line of The McGraw Hill Companies. Copyright ©2016 CUSIP Global Services. The CUSIP numbers have been assigned by an independent company not affiliated with the Institution and are included solely for the convenience of the owners of the Bonds. None of the Institution, the Trustee or the Underwriters is responsible for the selection or uses of the CUSIP numbers, and no representation is made as to their correctness on the Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions This Preliminary Offering Memorandum and the information contained herein are subject to completion, amendment or other changes without any notice. The securities described herein may not be sold nor may offers to buy be accepted prior to buy offers The securitiesnot be sold nor may described herein may notice. This Preliminary contained herein are subject to completion, amendment or other changes without any and the information Memorandum Offering sale of these securities nor shall there be any buy, to to sell or the solicitation of an offer Under no circumstances shall this Preliminary constitute an offer Memorandum Offering form. in final is delivered Memorandum to the time Offering such jurisdiction. prior of any or qualification under the securities to registration be unlawful laws solicitation or sale would jurisdictionin any in which such offer, including, but not limited to, a refunding in whole or in part of such maturity. TABLE OF CONTENTS Page GENERAL INFORMATION ....................................................................................................................................... i INFORMATION CONCERNING OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS OUTSIDE THE UNITED STATES .............................................................................................................. ii SUMMARY OF THE OFFERING .......................................................................................................................... viii INTRODUCTION ....................................................................................................................................................... 1 Purpose of the Bonds ..................................................................................................................................... 1 The Institution ............................................................................................................................................... 1 The Bonds ..................................................................................................................................................... 1 Security for the Bonds ................................................................................................................................... 2 Additional Bonds ........................................................................................................................................... 2 Outstanding Indebtedness .............................................................................................................................. 2 Redemption ................................................................................................................................................... 2 Certain Information Related to this Offering Memorandum ......................................................................... 2 PLAN OF FINANCE .................................................................................................................................................. 3 THE BONDS ............................................................................................................................................................... 3 Description of the Bonds ............................................................................................................................... 3 Book-Entry Only System and Global Clearance Procedures ........................................................................ 3 Optional Redemption .................................................................................................................................... 4 Partial Redemption of Bonds ........................................................................................................................ 5 Notice of Redemption ................................................................................................................................... 6 Effect of Redemption .................................................................................................................................... 6 Selection of Bonds for Redemption .............................................................................................................. 7 SECURITY FOR THE BONDS .................................................................................................................................. 7 General .......................................................................................................................................................... 7 Certain Funds and Accounts Established by the Indenture ........................................................................... 8 TAX MATTERS ......................................................................................................................................................... 8 U.S. Holders .................................................................................................................................................. 9 Taxation of Interest Generally ......................................................................................................................