Lehigh County General Purpose Authority Preliminary Official Statement Dated January 17, 2017
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PRELIMINARY OFFICIAL STATEMENT DATED JANUARY 17, 2017 ® NEW ISSUE MOODY’S RATING: “A1” (See “RATING” herein) In the opinion of Stevens & Lee, P.C., Allentown, Pennsylvania, Bond Counsel, assuming continuing compliance by the Authority and the College with certain covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and all regulations applicable thereunder, interest on the Bonds is not includable in gross income under Section 103(a) of the Code, and interest on the Bonds is not an item of tax preference for purposes of the federal individual or corporate alternative minimum taxes; except as set forth under the heading “TAX MATTERS” in this Official Statement. Other provisions of the Code may affect the purchasers and holders of the Bonds. See “TAX MATTERS” herein for a brief description of these provisions. Under the laws of the Commonwealth of Pennsylvania, the Bonds and interest on the Bonds shall be free from taxation for state and local purposes within the Commonwealth of Pennsylvania, but this exemption does not extend to gift, estate, succession or inheritance taxes or any other taxes not levied directly on the Bonds or the interest thereon. Under the laws of the Commonwealth of Pennsylvania, profits, gains or income derived from the sale, exchange or other disposition of the Bonds are subject to state and local taxation within the Commonwealth of Pennsylvania. $19,700,000* LEHIGH COUNTY GENERAL PURPOSE AUTHORITY College Revenue Bonds (Muhlenberg College Project) Series of 2017 Dated: Date of Issuance Interest Payable: February 1 and August 1 Principal Due: February 1, as shown on inside cover First Interest Payment: August 1, 2017 The Lehigh County General Purpose Authority (the “Authority”) College Revenue Bonds (Muhlenberg College Project), Series of 2017 (the “Bonds”) will be issued under and secured by a Trust Indenture dated as of February 1, 2017 (the “Indenture”) by and between the Authority and The Bank of New York Mellon Trust Company, N.A., Philadelphia, Pennsylvania, as bond trustee (the “Trustee”). The Bonds will be issued only as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in denominations of $5,000 or any integral multiple thereof. See, “THE BONDS – Book-Entry Only System” herein. The principal or redemption price of the Bonds will be payable upon presentation and surrender thereof at the designated office of the Trustee. Interest on the Bonds will be payable on February 1 and August 1 each year, commencing August 1, 2017, by check mailed (or in certain circumstances by wire transfer) to the registered owners thereof by the Trustee. So long as DTC or its nominee, Cede & Co., is the registered owner of the Bonds, payments of the principal or redemption price of, and interest on, the Bonds will be made to DTC. The Bonds are payable solely from, and are secured by certain moneys held under the Indenture or received thereunder by an assignment and a pledge of, payments and other revenues to be received by the Authority under a Loan Agreement dated as of February 1, 2017 between the Authority and Muhlenberg College (the “College”) and the Series of 2017 Note issued by the College under the Master Trust Indenture dated as of February 1, 2017, between the College and The Bank of New York Mellon Trust Company, N.A. as master trustee. The College’s obligations under the Series of 2017 Note are an unsecured general obligation of the College. The proceeds of the Bonds will be used by the College to refund outstanding debt of the College, fund certain capital improvements, and to pay the costs of issuing the Bonds. There are risks associated with an investment in the Bonds, some of which are described under “RISK FACTORS’ herein. The Bonds will be subject to redemption prior to maturity as described herein. See “THE BONDS – Redemption” herein. THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY AND ARE PAYABLE SOLELY FROM THE SOURCES REFERRED TO IN THE INDENTURE PURSUANT TO WHICH THE BONDS ARE ISSUED AND SECURED, AND THE BONDS SHALL NOT BE OR BE DEEMED AN OBLIGATION OF THE COMMONWEALTH OF PENNSYLVANIA, THE COUNTY OF LEHIGH, OR ANY POLITICAL SUBDIVISION THEREOF. NEITHER THE COMMONWEALTH OF PENNSYLVANIA, THE COUNTY OF LEHIGH NOR ANY POLITICAL SUBDIVISION THEREOF IS OR SHALL BE OBLIGATED TO PAY THE PRINCIPAL OR PURCHASE PRICE OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA, THE COUNTY OF LEHIGH OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO SUCH PAYMENT. THE AUTHORITY HAS NO TAXING POWER. NO BOARD MEMBER, OFFICER, EMPLOYEE OR AGENT OF THE ISSUER, PAST, PRESENT OR FUTURE, SHALL HAVE ANY PERSONAL LIABILITY BY REASON OF EXECUTION OR ISSUANCE OF THE BONDS. THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. Maturity Schedule on Inside Cover Page The Bonds are offered when, as and if issued by the Authority, subject to prior sale, withdrawal or modification of the offer without any notice and to the approving opinion of Stevens & Lee, P.C. Allentown, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for Morgan Stanley & Co. LLC, as Underwriter, by its counsel, Clark Hill, PLC, Pittsburgh, Pennsylvania. Certain legal matters will be passed upon for the College and the Authority by their counsel, Davison & McCarthy PC, Allentown, Pennsylvania. It is expected that Bonds in definitive form will be delivered to the Trustee, as custodian for DTC, on or about _____________________, 2017. MORGAN STANLEY The date of this Official Statement is __________________, 2017. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, buy, to Under no circumstances shall this Preliminary to sell or the solicitation of an offer This Preliminary Official Statement constitute an offer contained herein are subject to completion or amendment. Official Statement and the information any such jurisdiction. priorlaws of qualification or filing under the securities to registration, be unlawful solicitation or sale would sale of these securities jurisdictionnor shall there be any in any in which such offer, * Preliminary; subject to change. $19,700,000* LEHIGH COUNTY GENERAL PURPOSE AUTHORITY College Revenue Bonds (Muhlenberg College Project) Series of 2017 Dated: _____________, 2017 Principal Due: February 1, as shown below Interest Due: February 1 and August 1 First Interest Payment: August 1, 2017 MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES Maturity Principal Amount Interest Rate Yield Price CUSIP**No. (February 1) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 $_____ ___% Term Bond Due February 1, 2039, Priced at ____% to Yield ____% * Preliminary; subject to change. ** The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Authority, the College or the Underwriter, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refundings or defeasance of such issue or the use of secondary market financial products. None of the Authority, the College or the Underwriter has agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above. LEHIGH COUNTY GENERAL PURPOSE AUTHORITY Allentown, Pennsylvania BOARD MEMBERS Jerome B. Frank Christopher Lakatosh William Newhard Brad Osborne Sean Pressmann AUTHORITY SOLICITOR AND COLLEGE COUNSEL Davison & McCarthy PC Allentown, Pennsylvania COLLEGE Muhlenberg College Allentown, Pennsylvania BOND COUNSEL Stevens & Lee, P.C. Allentown, Pennsylvania BOND TRUSTEE AND MASTER TRUSTEE The Bank of New York Mellon Trust Company, N.A. Philadelphia, Pennsylvania UNDERWRITER Morgan Stanley & Co. LLC Washington, DC UNDERWRITER'S COUNSEL Clark Hill, PLC Pittsburgh, Pennsylvania This Official Statement does not constitute an offering of any security, other than the original offering of the Bonds identified on the cover hereof. No dealer, broker, salesman or other person has been authorized by the Authority, the College or the Underwriter to give any information or to make any representation other than those 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 any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, and there shall not be any sale of the Bonds by any person in any jurisdiction in which it is unlawful to make such offer, solicitation, or sale.