Electric Utility Official Statement
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OFFICIAL STATEMENT Ratings: S&P: “A+” (See “Continuing Disclosure of Dated November 5, 2019 Information” herein) Fitch: “AA-” (See “OTHER INFORMATION NEW ISSUE - Book-Entry-Only – Ratings” herein) In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "TAX MATTERS" herein. THE BONDS HAVE NOT BEEN DESIGNATED AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS $140,790,000 CITY OF GARLAND, TEXAS (Dallas, Collin and Rockwall Counties) ELECTRIC UTILITY SYSTEM REVENUE REFUNDING BONDS, NEW SERIES 2019A Dated Date: December 1, 2019 Due: March 1, as shown on page 2 Interest to accrue from the date of initial delivery PAYMENT TERMS . Interest on the $140,790,000 City of Garland, Texas, Electric Utility System Revenue Refunding Bonds, New Series 2019A (the "Bonds") will accrue from the date of initial delivery to the underwriters thereof (the “Underwriters”), will be payable September 1, 2020, and each March 1 and September 1 thereafter until maturity or prior redemption, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof within a stated maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds (see "THE BONDS - Book-Entry-Only System" herein). The initial Paying Agent/Registrar is Zions Bancorporation, National Association, Amegy Bank Division, Houston, Texas (see "THE BONDS - Paying Agent/Registrar"). AUTHORITY FOR ISSUANCE . The Bonds are authorized and issued pursuant to the Constitution and general laws of the State of Texas (the “State”), particularly Chapter 1207, Texas Government Code, as amended, and an ordinance (the "Ordinance") adopted by the City Council, and are special obligations of the City of Garland, Texas (the "City"), payable, both as to principal and interest, together with the Bonds Similarly Secured and any Additional Bonds (each as defined in the Ordinance) solely from and secured by a lien on and pledge of the Net Revenues of the City’s Electric Utility System (the “System” or “Electric System”), such lien and pledge, however, being subordinate to the lien and pledge of the Net Revenues to the Prior Lien Bonds (identified and defined in the Ordinance), but superior to the lien on and pledge of the Net Revenues to the City’s Electric System commercial paper notes (see “VARIABLE RATE PROGRAMS”). The City has covenanted in the Ordinance that it will not issue any additional obligations that are on a parity with the outstanding Prior Lien Bonds. At such time as there are no Prior Lien Bonds outstanding, the Bonds Similarly Secured, together with any Additional Bonds, will become obligations equally secured by a first lien on and pledge of the Net Revenues of the System. The City has not covenanted nor obligated itself to pay the Bonds from monies raised or to be raised from taxation (see "THE BONDS - Authority for Issuance" and “THE BONDS – Security and Source of Payment”). PURPOSE . Proceeds from the sale of the Bonds will be used to (i) refund a portion of the City’s outstanding Electric System revenue debt described in Schedule I – Schedule of Refunded Obligations (the “Refunded Obligations”) for debt service savings, (ii) pay a portion of the City’s outstanding Electric System commercial paper notes authorized in 2018 (the “Refunded Notes”) (see “VARIABLE RATE PROGRAMS”) and (iii) pay the costs of issuance associated with the sale of the Bonds (see “PLAN OF FINANCING – Purpose of the Bonds”). CUSIP PREFIX: 366133 MATURITY SCHEDULE & 9 DIGIT CUSIP See Schedule on Page 2 LEGALITY . The Bonds are offered for delivery when, as and if issued and received by the Underwriters and subject to the approving opinion of the Attorney General of Texas and the opinion of Norton Rose Fulbright US LLP, Bond Counsel, Dallas, Texas, (see Appendix C, "Form of Bond Counsel's Opinion"). Certain legal matters will be passed upon for the Underwriters by Bracewell LLP, Dallas, Texas, Counsel for the Underwriters. DELIVERY. It is expected that the Bonds will be available for delivery through DTC on December 3, 2019. Goldman Sachs BofA Securities Wells Fargo Securities MATURITY SCHEDULE CUSIP Prefix: 366133(1) Par Interest Initial CUSIP Amount Maturity Rate Yield Suffix (1) $ 9,080,000 3/1/2021 5.000% 1.240% NC6 10,765,000 3/1/2022 5.000% 1.270% ND4 11,320,000 3/1/2023 5.000% 1.320% NE2 10,750,000 3/1/2024 5.000% 1.400% NF9 10,200,000 3/1/2025 5.000% 1.470% NG7 10,720,000 3/1/2026 5.000% 1.570% NH5 11,275,000 3/1/2027 5.000% 1.660% NJ1 11,850,000 3/1/2028 5.000% 1.760% NK8 12,465,000 3/1/2029 5.000% 1.870% NL6 13,105,000 3/1/2030 5.000% 1.950% NM4 975,000 3/1/2031 4.000% 2.110% (2) NN2 1,015,000 3/1/2032 4.000% 2.180% (2) NP7 1,055,000 3/1/2033 4.000% 2.310% (2) NQ5 1,100,000 3/1/2034 4.000% 2.390% (2) NR3 1,145,000 3/1/2035 4.000% 2.480% (2) NS1 1,190,000 3/1/2036 4.000% 2.520% (2) NT9 1,240,000 3/1/2037 4.000% 2.560% (2) NU6 1,290,000 3/1/2038 4.000% 2.600% (2) NV4 (2) 1,340,000 3/1/2039 4.000% 2.630% NW2 $7,575,000 4.000% Term Bond due March 1, 2044 at a Price of 110.713% to Yield 2.790% (2) - CUSIP No. (1) NX0 $11,335,000 4.000% Term Bond due March 1, 2050 at a Price of 110.058% to Yield 2.860% (2) - CUSIP No. (1) NY8 (Interest to accrue from the Delivery Date) _______________ (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services managed by S&P Global Market Intelligence 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. The City, the Financial Advisor and the Underwriters take no responsibility for the accuracy of such numbers. (2) Priced to the March 1, 2030 optional redemption date at par. BONDS OPTIONAL REDEMPTION. The City reserves the right, at its option, to redeem Bonds having stated maturities on and after March 1, 2031, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on March 1, 2030, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "THE BONDS –Optional Redemption"). MANDATORY SINKING FUND REDEMPTION. The Bonds maturing on March 1 in the years 2044 and 2050 are subject to mandatory redemption in part prior to maturity at a price of par plus accrued interest to the redemption date as described under “THE BONDS – Mandatory Sinking Fund Redemption.” 2 No dealer, broker, salesman or other person has been authorized by the City 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 the City. This Official Statement does not constitute an offer to sell Bonds in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. Certain information set forth herein has been obtained from the City and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Financial Advisor or the Underwriters. Any information and expressions of opinion herein contained 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 City or other matters described herein since the date hereof. See “CONTINUING DISCLOSURE OF INFORMATION” for a description of the City’s undertaking to provide certain information on a continuing basis. This Official Statement contains, in part, estimates and matters of opinion that are not intended as statements of fact, and no representation or warranty is made as to the correctness of such estimates and opinions or that they will be realized. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in the Official Statement in accordance with, and as part of, their respective responsibilities to investors under federal securities laws as applied to the facts and circumstance of this transaction but the Underwriters do not guarantee the accuracy or completeness of such information. This Official Statement, which includes the cover page, the schedule and the appendices hereto, does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation or sale.