City of San Antonio, Texas Electric and Gas Systems Revenue and Refunding Bonds, New Series 2017

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City of San Antonio, Texas Electric and Gas Systems Revenue and Refunding Bonds, New Series 2017 PRELIMINARY OFFICIAL STATEMENT DATED: MARCH 28, 2017 RATINGS: Fitch "AA+" Moody's "Aa1" S&P "AA" NEW ISSUE –BOOK ENTRY-ONLY SYSTEM See "RATINGS" herein In the opinion of Norton Rose Fulbright US LLP and Kassahn & Ortiz, P.C., Co-Bond Counsel, assuming continuing compliance by the City (defined below) after the date of initial delivery of the Bonds (defined below) with certain covenants described in the Ordinance (defined below) and subject to the matters described herein under "TAX MATTERS", interest on the Bonds under existing statutes, regulations, rulings, and court decisions (1) will be excludable from the gross income of the owners thereof for federal income tax purposes under section 103 of the Internal Revenue Code of 1986, as amended and (2) will not be included in computing the alternative minimum taxable income of the owners thereof who are individuals or, except as described herein, corporations. See "TAX MATTERS" herein. $306,975,000* anoffer tobuy, nor shall there be any sale of CITY OF SAN ANTONIO, TEXAS ELECTRIC AND GAS SYSTEMS REVENUE AND REFUNDING BONDS, NEW SERIES 2017 Dated: April 1, 2017 (Interest to accrue from the Closing Date) Due: February 1, as shown herein The $306,975,000* City of San Antonio, Texas Electric and Gas Systems Revenue and Refunding Bonds, New Series 2017 (the "Bonds") will be issued under and in conformity with the Constitution and general laws of the State of Texas, including Chapters 1207, 1371 and 1502, as amended, Texas Government Code (together, the "Act"), and pursuant to an ordinance ("Ordinance") adopted by the City Council ("City Council") of the City of San Antonio, Texas ("City") on February 23, 2017. As permitted by applicable provisions of the Act, the City Council has, in the Ordinance, delegated to certain City representatives the authority to execute an approval certificate (the "Approval Certificate") establishing final characteristics These securities may not be sold nor may offers to buy be accepted prior to the the to prior be accepted buy to offers may nor be sold not may securities These and terms of the sale of the Bonds. The Bonds are being issued to: (i) pay the costs associated with acquiring, purchasing, constructing, improving, repairing, extending, equipping, and ficationunder the securitieslaws of any suchjurisdiction. renovating the Systems (defined herein), (ii) refund certain outstanding obligations of the City identified in Appendix G hereto ("Refunded Bonds") for debt service savings, and (iii) pay costs and expenses relating to the issuance of the Bonds. The Bonds are issuable only as fully registered obligations in denominations of $5,000 or any integral multiple thereof. Interest on the Bonds will accrue from the date of their initial delivery (the "Closing Date") to the initial purchasers thereof named below (collectively, the "Underwriters") (expected to occur on or about April 27, 2017*) and will be payable on February 1 and August 1 of each year, commencing August 1, 2017. The Bonds will be issued in book-entry-only form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC") acting as securities depository ("Securities Depository"). The City reserves the right to discontinue the use of the Securities Depository, but so long as DTC or its nominee is the registered owner of the Bonds, purchasers of the Bonds ("Beneficial Owners") will not receive physical delivery of certificates representing their interest in the Bonds purchased. The principal of, premium, if any, and interest on the Bonds will be payable by The Bank of New York Mellon Trust Company, National Association, Dallas, Texas, as Paying Agent / Registrar, to the Securities Depository, which will in turn remit such principal, premium, if any, and interest to the Beneficial Owners. See "THE BONDS – Book- Entry-Only System" herein. In the Bond Ordinances (defined herein), the City has authorized the City Public Service Board of San Antonio ("CPS", "Board", or "CPS Energy") to manage, operate, and maintain the City's Electric and Gas Systems (the "Systems"). The Bonds are special obligations of the City issued on a parity with the currently outstanding Previously Issued Senior Lien Obligations (defined herein) and any Additional Senior Lien Obligations (defined herein) hereafter issued, payable solely from and equally and ratably secured, together with the currently outstanding Previously Issued Senior Lien Obligations, by a first and prior lien on and pledge of the Net Revenues of the Systems (defined herein) that is superior to the pledge thereof and lien thereon securing the currently outstanding Junior Lien Obligations (defined herein) and the Notes (defined herein), and notes issued under the Flexible Rate Revolving Note Private Placement Program (defined herein), all as fully set forth in the Ordinance. See "THE BONDS – Authority and Security for the Bonds" herein. The Ordinance does not create a mortgage or other security interest on the property of the Systems. The Bonds are special obligations of the City payable only from the Net Revenues of the Systems, at the level of priority described above, and the taxing power of none of the City, any other political subdivision of the State of Texas, or the State of Texas is pledged for the payment thereof. al form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of solicitation the or sell to offer an constitute Statement Official Preliminary this shall circumstances no Under al form. SEE INSIDE COVER PAGE FOR MATURITIES, INTEREST RATES AND PRICING SCHEDULE The Bonds are offered for initial delivery when, as, and if issued and received by the Underwriters and subject to the approval of the Attorney General of the State of Texas and the approval of certain legal matters by Norton Rose Fulbright US LLP and Kassahn & Ortiz, P.C., both of San Antonio, Texas, as Co-Bond Counsel. Certain legal matters will be passed upon for the City by the City Attorney, by Carolyn E. Shellman, Esq., General Counsel for the City Public Service Board, and for the Underwriters by their legal counsel, McCall, Parkhurst & Horton L.L.P., San Antonio, Texas. The Bonds are expected to be available for initial delivery to the Underwriters and credited through DTC on or about April 27, 2017*. GOLDMAN, SACHS & CO. CITIGROUP FROST BANK RAMIREZ & CO., INC. RICE FINANCIAL PRODUCTS COMPANY __________________________________________________ This Preliminary Official Statement and the information contained herein are subject to completion or amendment without notice. without amendment or completion to subject are herein contained information the and Statement Official Preliminary This fin in delivered is Statement Official the time these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or or quali to registration prior would unlawful sale or be solicitation offer, such which in jurisdiction any in these securities *Preliminary subject to change. MATURITIES, INTEREST RATES AND PRICING SCHEDULE $306,975,000* CITY OF SAN ANTONIO, TEXAS ELECTRIC AND GAS SYSTEMS REVENUE AND REFUNDING BONDS, NEW SERIES 2017 Due February 1 in the years shown below Stated Principal Interest Initial ( ( Maturity 1) Amount ($)* Rate (%) Yield (%) CUSIP No. 2) 02/01/2018 21,965,000 02/01/2019 12,270,000 02/01/2020 6,390,000 02/01/2021 150,000 02/01/2022 *** 02/01/2023 *** 02/01/2024 *** 02/01/2025 *** 02/01/2026 6,915,000 02/01/2027 7,260,000 02/01/2028 7,620,000 02/01/2029 8,005,000 02/01/2030 8,405,000 02/01/2031 8,825,000 02/01/2032 9,265,000 02/01/2033 9,730,000 02/01/2034 10,215,000 02/01/2035 10,725,000 02/01/2036 11,260,000 02/01/2037 11,825,000 02/01/2038 12,415,000 02/01/2039 13,035,000 02/01/2040 13,690,000 02/01/2041 14,370,000 02/01/2042 15,090,000 02/01/2043 15,845,000 02/01/2044 16,635,000 02/01/2045 17,470,000 02/01/2046 18,340,000 02/01/2047 19,260,000 _____________________________________________________________ *Preliminary subject to change (1) The Bonds are subject to redemption prior to stated maturity at the prices, in the amounts, and at the times described herein. See "THE BONDS – Redemption of Bonds". Any Term Bonds (defined herein) will be subject to mandatory sinking fund redemption. (2) CUSIP numbers are included solely for the convenience of the owners of the Bonds. 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. No assurance can be given that the CUSIP number for a particular maturity of the Bonds will remain the same after the date of delivery of the Bonds. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the City, the Board, the Co-Financial Advisors, or the Underwriters shall be responsible for the selection, changes to, errors, or correctness of the CUSIP numbers set forth herein. ii CITY OF SAN ANTONIO, TEXAS CITY COUNCIL Ivy R. Taylor, Mayor Ron Nirenberg Roberto Treviño Rebecca Viagran Rey Saldaña Shirley Gonzales Cris Medina Mike Gallagher Ray Lopez Joe Krier Alan Warrick II Sheryl Sculley – City Manager Ben Gorzell, Jr. – Chief Financial Officer Leticia M. Vacek – City Clerk Andrew Segovia – City Attorney(1) CITY PUBLIC SERVICE BOARD OF SAN ANTONIO Edward B. Kelley, Chairman Derrick Howard, Vice Chairman Homer Guevara, Jr., Trustee John T. Steen, Jr., Trustee Ivy R.
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