The Hospitals and Higher Education Facilities Authority of Philadelphia
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New Issue - Book-Entry Only Ratings: See “RATINGS” herein In the opinion of Co-Bond Counsel, interest on the 2017 Bonds (as herein defined) is excluded from gross income for purposes of federal income taxation under existing statutes, regulations, rulings and court decisions, subject to conditions described in “TAX EXEMPTION AND OTHER TAX MATTERS” herein. Interest on the 2017 Bonds will not be a specific preference item for purposes of the individual and corporate alternative minimum taxes; however, such interest is taken into account in computing the alternative minimum tax for certain corporations and may be subject to certain other federal taxes affecting corporate holders of the 2017 Bonds. Under the laws of the Commonwealth of Pennsylvania, as enacted and construed on the date hereof, the 2017 Bonds are exempt from Pennsylvania personal property taxes and the interest on the 2017 Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax. For a more complete discussion, see “TAX EXEMPTION AND OTHER TAX MATTERS” herein. $235,240,000 THE HOSPITALS AND HIGHER EDUCATION FACILITIES AUTHORITY OF PHILADELPHIA Hospital Revenue Bonds (Temple University Health System Obligated Group), Series of 2017 Dated: Date of Delivery Due: July 1, as shown on inside cover Interest Payable: January 1 and July 1 First Interest Payment: January 1, 2018 The Hospitals and Higher Education Facilities Authority of Philadelphia (the “Authority”) is issuing its $235,240,000 Hospital Revenue Bonds (Temple University Health System Obligated Group), Series of 2017 (the “2017 Bonds”) to finance a project (as described herein) on behalf of an obligated group (the “Obligated Group”) consisting of Temple University Hospital, Inc., Temple University Health System, Inc., Jeanes Hospital, Temple Health System Transport Team, Inc., Temple Physicians, Inc., The American Oncologic Hospital d/b/a The Hospital of Fox Chase Cancer Center, The Institute for Cancer Research d/b/a The Research Institute of Fox Chase Cancer Center, Fox Chase Cancer Center Medical Group, Inc. and Fox Chase Network, Inc. (each, a “Member” and collectively, the “Members”). The 2017 Bonds will bear interest at the rates shown on the inside cover hereof and will be issued in denominations of $5,000 or any integral multiple thereof. The principal or redemption price of the 2017 Bonds will be payable upon presentation and surrender thereof at the corporate trust office of the Trustee (as hereinafter defined) in Philadelphia, Pennsylvania. Interest on the 2017 Bonds will be payable on January 1 and July 1 of each year, commencing January 1, 2018, by check mailed (or in certain circumstances by wire transfer) to the registered owners thereof by the Trustee. The 2017 Bonds, when, as and if issued, will be issuable as fully registered bonds without coupons, and when issued will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as Securities Depository for the 2017 Bonds. Except as described herein, purchasers will not receive certificates representing their beneficial ownership in the 2017 Bonds. See “BOOK-ENTRY ONLY SYSTEM” herein. So long as DTC or its nominee, Cede & Co., is the registered owner of the 2017 Bonds, payments of principal or redemption price of and interest on the 2017 Bonds will be made directly to DTC or such nominee by the Trustee. Disbursement of such payments to the DTC Participants (as herein defined) is the responsibility of DTC and disbursements of such payments to the Beneficial Owners (as herein defined) is the responsibility of the DTC Participants and the Indirect Participants (as herein defined), as more fully described herein. The 2017 Bonds are limited obligations of the Authority and will be secured under the provisions of a Fourteenth Supplemental Loan and Trust Agreement dated as of October 1, 2017 (the “Fourteenth Supplement”), by and among the Authority, the Obligated Group and U.S. Bank National Association, as successor trustee (the “Trustee”), which amends and supplements the Loan and Trust Agreement dated as of January 15, 1993. See “BONDHOLDERS’ RISKS” herein for a discussion of certain factors which should be considered in connection with an investment in the 2017 Bonds. The 2017 Bonds are subject to optional, extraordinary and special redemption prior to maturity, and to purchase in lieu of redemption, as described herein. See “THE 2017 BONDS - Redemption of 2017 Bonds” herein. THE 2017 BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY AND SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OF THE CITY OF PHILADELPHIA, THE COMMONWEALTH OF PENNSYLVANIA, OR ANY POLITICAL SUBDIVISION, AGENCY OR INSTRUMENTALITY THEREOF OTHER THAN THE LIMITED OBLIGATION OF THE AUTHORITY AS AFORESAID. NEITHER THE GENERAL CREDIT OF THE AUTHORITY NOR THE CREDIT OR THE TAXING POWER OF THE CITY OF PHILADELPHIA, THE COMMONWEALTH OF PENNSYLVANIA OR ANY OTHER POLITICAL SUBDIVISION, AGENCY OR INSTRUMENTALITY THEREOF IS PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF, OR INTEREST ON, THE 2017 BONDS. THE AUTHORITY HAS NO TAXING POWER. NEITHER TEMPLE UNIVERSITY-OF THE COMMONWEALTH SYSTEM OF HIGHER EDUCATION (“TEMPLE UNIVERSITY”) NOR ANY AFFILIATE OF TEMPLE UNIVERSITY (OTHER THAN THE MEMBERS OF THE OBLIGATED GROUP) HAS GUARANTEED OR IS OTHERWISE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF, OR INTEREST ON, THE 2017 BONDS. The cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read this entire Official Statement to obtain information essential to making an informed investment decision. This Official Statement is dated October 25, 2017 and the information contained herein speaks only as of that date. The 2017 Bonds are offered subject to the approving legal opinion of Dilworth Paxson LLP, Philadelphia, Pennsylvania, and Stevens & Lee, P.C., Philadelphia, Pennsylvania, as Co-Bond Counsel, to be furnished upon delivery of the 2017 Bonds. Certain legal matters will be passed upon for the Obligated Group by Beth C. Koob, Esquire, Chief Counsel of Temple University Health System, Inc. Certain legal matters will be passed upon for the Underwriters by Ballard Spahr LLP, Philadelphia, Pennsylvania, and for the Authority by its Counsel, Austin J. McGreal, Esquire, Philadelphia, Pennsylvania. The 2017 Bonds are expected to be available in definitive form for delivery in New York, New York on or about November 2, 2017. MORGAN STANLEY PNC CAPITAL MARKETS LLC $235,240,000 THE HOSPITALS AND HIGHER EDUCATION FACILITIES AUTHORITY OF PHILADELPHIA Hospital Revenue Bonds (Temple University Health System Obligated Group), Series of 2017 MATURITY SCHEDULE Maturity Date Principal Interest (July 1) Amount Rate Price Yield CUSIP No.† 2019 $6,440,000 5.00% 105.034 1.910% 717903K23 2020 5,505,000 5.00 107.364 2.140 717903K31 2021 5,680,000 5.00 109.468 2.290 717903K49 2022 13,095,000 5.00 111.124 2.460 717903K56 2023 10,690,000 5.00 112.168 2.670 717903K64 2024 14,195,000 5.00 113.026 2.840 717903K72 2025 14,920,000 5.00 113.525 3.010 717903K80 2026 15,685,000 5.00 113.602 3.190 717903K98 2027 15,385,000 5.00 113.698 3.330 717903L22 2028 16,170,000 5.00 112.904 3.420∗ 717903L30 2029 16,995,000 5.00 112.291 3.490* 717903L48 2030 17,950,000 5.00 111.682 3.560* 717903L55 2031 18,830,000 5.00 111.336 3.600* 717903L63 2032 19,800,000 5.00 111.164 3.620* 717903L71 2033 20,820,000 5.00 110.648 3.680* 717903L89 * 2034 23,080,000 5.00 110.391 3.710 717903L97 † Copyright 2017, American Bankers Association. CUSIP data herein are provided by Standard & Poor’s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. All rights reserved. The CUSIP numbers listed above are being provided only for the convenience of the reader and neither the Authority nor the Underwriters make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. Any CUSIP number may change after the issuance of the 2017 Bonds as a result of subsequent events including in particular, but not by way of limitation, the procurement of secondary market portfolio insurance or other similar enhancement that is applicable to all or certain portions of the 2017 Bonds. ∗ Yield calculated to first optional redemption date of July 1, 2027. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2017 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT NOTICE. THE UNDERWRITERS MAY OFFER AND SELL THE 2017 BONDS TO CERTAIN DEALERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS. THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE 2017 BONDS IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT. THE 2017 BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACT. THE REGISTRATION OR QUALIFICATION OF THE 2017 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF THE SECURITIES LAWS OF CERTAIN STATES, IF ANY, IN WHICH THE 2017 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN CERTAIN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF.