Nuvance Series 2019B Official Bond Statement
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NEW ISSUE — BOOK-ENTRY ONLY RATINGS† Moody’s: “A3” S&P: “A-” In the opinion of Hawkins Delafield & Wood LLP, Bond Counsel, under existing statutes and court decisions and assuming continuing compliance with certain tax covenants described herein, (i) interest on the Bonds is excluded from gross income for federal income tax purposes pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) interest on the Bonds is not treated as a preference item in calculating the alternative minimum tax under the Code. In addition, in the opinion of Bond Counsel, under existing statutes, (i) interest on the 2019A Bonds is excluded from Connecticut taxable income for purposes of the Connecticut income tax on individuals, trusts and estates, and interest on the 2019A Bonds is excluded from amounts on which the net Connecticut minimum tax is based in the case of individuals, trusts and estates required to pay the federal alternative minimum tax; and (ii) interest on the 2019B Bonds is exempt from personal income taxes of New York State and its political subdivisions, including the City of New York. See “TAX MATTERS” herein. $340,110,000 $99,910,000 STATE OF CONNECTICUT HEALTH AND DUTCHESS COUNTY LOCAL EDUCATIONAL FACILITIES AUTHORITY DEVELOPMENT CORPORATION REVENUE BONDS, NUVANCE HEALTH ISSUE, REVENUE BONDS, NUVANCE HEALTH ISSUE, SERIES 2019A SERIES 2019B Dated: Date of Delivery Due: July 1, as shown on inside cover On the issuance date, the State of Connecticut Health and Educational Facilities Authority (the “Authority”) will issue its Revenue Bonds, Nuvance Health Issue, Series 2019A (the “Series 2019A Bonds”) and the Dutchess County Local Development Corporation (the “Corporation”) will issue its Revenue Bonds, Nuvance Health Issue, Series 2019B (the “Series 2019B Bonds”). The Series 2019A Bonds and the Series 2019B Bonds (collectively, the “Bonds”) are issuable only as fully registered bonds without coupons, and when issued, will be registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York. So long as Cede & Co. is the registered owner of the Bonds, principal, premium, if any, and interest payments on the Bonds will be made by the bond trustee of each series, to Cede & Co., which in turn will remit such payments to the DTC Participants and DTC Indirect Participants for subsequent disbursement to the beneficial owners of the Bonds. Purchase of the Bonds will be made in book-entry form only and individual purchasers will not receive physical delivery of bond certificates representing their beneficial interest in the Bonds. So long as Cede & Co. is the registered owner of the Bonds, references herein to the holders or registered owners of the Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the Bonds. See “THE BONDS - Book-Entry-Only System” herein. The Series 2019A Bonds are issued pursuant to a Trust Indenture dated as of August 1, 2019 (the “Series 2019A Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Series 2019A Trustee”). The proceeds of the Series 2019A Bonds will be loaned by the Authority to Health Quest Systems, Inc. (together with Nuvance Health, the “Series 2019A Borrowers”) and applied as described herein. The Series 2019B Bonds are issued pursuant to a Trust Indenture dated as of August 1, 2019 (the “Series 2019B Indenture”), by and between the Corporation and The Bank of New York Mellon, as trustee (the “Series 2019B Trustee”). The proceeds of the Series 2019B Bonds will be loaned by the Corporation to Western Connecticut Health Network, Inc. (together with Nuvance Health, the “Series 2019B Borrowers”) and applied as described herein. The Series 2019A Indenture and the Series 2019B Indenture shall be collectively referred to herein as the “Indentures.” The Series 2019A Trustee and the Series 2019B Trustee shall be collectively referred to herein as the “Trustees.” The Series 2019A Borrowers and the Series 2019B Borrowers shall be collectively referred to herein as the “Borrowers.” Each series of Bonds will be secured by (a) certain funds and accounts established under each Indenture; (b) all right, title and interest of the Authority or the Corporation, as the case may be, in and to each related Loan Agreement and all Revenues payable to the Authority or the Corporation, as the case may be; and (c) the Nuvance Health Series 2019A Note delivered with respect to the Series 2019A Bonds (the “Series 2019A Obligation”) and the Nuvance Health Series 2019B Note delivered with respect to the Series 2019B Bonds (the “Series 2019B Obligation”, and collectively with the Series 2019A Obligation, the “Series 2019 Obligations”) issued under the Amended and Restated Master Trust Indenture, dated as of August 1, 2019 (the “Master Indenture”), by and among Members of the Obligated Group (as defined herein) and The Bank of New York Mellon Trust Company, N.A., as master trustee (the “Master Trustee”), and under the Supplemental Indenture for the Series 2019A Obligation and the Supplemental Indenture for the Series 2019B Obligation, respectively, each dated as of August 1, 2019 (collectively, the “Supplemental Indentures”) by and among the Members of the Obligated Group and the Master Trustee. The Series 2019 Obligations are secured by a mortgage on the principal hospital campuses of certain Members of the Obligated Group as described herein. By virtue of the purchase of the Bonds, the beneficial owners of the Bonds are granting their consent to the amendment and restatement of the existing master trust indenture, as described herein. In accordance with each Indenture, each series of Bonds will be issued in the Fixed Rate Mode (as defined herein) and will bear interest at the Fixed Rates (as defined herein) listed on the inside front cover of this Official Statement until their respective maturity as set forth on the inside cover page hereof, or earlier redemption or conversion. Interest on each series of Bonds will be computed as described in this Official Statement. Interest on each series of Bonds will be payable on January 1, 2020 and semiannually thereafter on July 1 and January 1 in each year. Each series of Bonds is subject to the optional redemption (or mandatory tender), mandatory redemption and extraordinary redemption prior to maturity and purchase in lieu of redemption in certain circumstances, as described in this Official Statement. This Official Statement describes the provisions of each series of Bonds only when such Bonds bear interest at Fixed Rates during the Initial Fixed Rate Period (as defined herein). Should any Bonds be converted to operate in a different interest rate mode or for a different fixed interest rate period, such Bonds will be subject to mandatory tender for purchase, and, except as otherwise provided in the related Indenture, at that time, it is expected that a reoffering circular or supplement to this Official Statement or other disclosure document will be prepared for the remarketing of such Bonds. AN INVESTMENT IN THE BONDS INVOLVES A DEGREE OF RISK. A PROSPECTIVE BONDOWNER IS ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT, INCLUDING THE APPENDICES HERETO. SPECIAL REFERENCE IS MADE TO THE SECTIONS ENTITLED “PAYMENT AND SECURITY PROVISIONS RELATING TO THE BONDS”, “BONDHOLDERS’ RISKS” AND “REGULATION OF THE HEALTH CARE INDUSTRY” HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE BONDS. THE SERIES 2019A BONDS AND THE SERIES 2019B BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY AND THE CORPORATION, RESPECTIVELY, PAYABLE SOLELY FROM THE REVENUES (AS DEFINED IN EACH INDENTURE). NONE OF THE AUTHORITY, THE CORPORATION, THE STATE OF CONNECTICUT, THE STATE OF NEW YORK, DUTCHESS COUNTY, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST THEREON OR ANY COSTS INCIDENTAL THERETO. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF CONNECTICUT, THE STATE OF NEW YORK, DUTCHESS COUNTY, OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON, THE BONDS OR ANY COSTS INCIDENTAL THERETO. THE AUTHORITY AND THE CORPORATION HAVE NO TAXING POWER. MATURITIES, AMOUNTS, INTEREST RATES, PRICES AND CUSIP NUMBERS (See Inside Cover) This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this Bond issue. Investors are instructed to read the entire Official Statement to obtain information essential to making an informed investment decision. Kaufman, Hall & Associates, Inc. has acted as financial advisor to the Obligated Group in connection with the issuance of the Bonds. The Bonds are offered subject to prior sale, when, as and if issued by the Authority and the Corporation and accepted by the Underwriter, subject to certain conditions, including the approval of legality by Hawkins Delafield & Wood LLP, Bond Counsel to the Authority and the Corporation. Certain legal matters will be passed upon by Chapman and Cutler LLP, special counsel to the Obligated Group, and by Pullman & Comley, LLC, counsel to the Underwriter. It is expected that the Bonds in definitive form will be available for delivery to The Depository Trust Company, on or about August 28, 2019. BofA Merrill Lynch The date of this Official Statement is August 13, 2019. † For an explanation