NY MTA 11 Hudson Yard

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NY MTA 11 Hudson Yard PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 22, 2016 NEW ISSUE BOOK‑ENTRY‑ONLY $1,057,430,000* MTA HUDSON RAIL YARDS TRUST OBLIGATIONS, SERIES 2016A Evidencing the Interests of Owners Thereof in the MTA Financing Agreement Amount Payable By the Metropolitan Transportation Authority DATED: Date of Delivery DUE: November 15, as shown on the inside cover page The MTA Hudson Rail Yards Trust Obligations, Series 2016A (“Series 2016A Obligations”) are being executed and delivered by Wells Fargo Bank, National Association, as Trustee (“Trustee”), to (i) retire the outstanding Transportation Revenue Bond Anticipation Notes, Series 2016A of the Metropolitan Transportation Authority (“Authority”), which were issued to provide interim financing of approved capital program transit and commuter projects, (ii) finance approved capital program transit and commuter projects of the affiliates and subsidiaries of the Authority, (iii) fund an Interest Reserve Requirement in an amount equal to one-sixth (1/6) of the greatest amount of Interest Components (as hereinafter defined) in the current or any future year, (iv) fund a portion of the Capitalized Interest Fund requirement, and (v) finance certain costs of issuance. Pursuant to the Financing Agreement (as hereinafter defined), the Authority has agreed to pay to, or for the benefit of, the Trustee the “MTA Financing Agreement Amount,” consisting of principal and interest components. The Series 2016A Obligations evidence the interest of the Owners thereof in such MTA Financing Agreement Amount payable by the Authority pursuant to the Financing Agreement. The principal amount of the Series 2016A Obligations listed on the inside cover page represent the principal components of the MTA Financing Agreement Amount (“Principal Components”) and the interest at the rates listed on the inside cover page represent the interest components of the MTA Financing Agreement Amount (“Interest Components”). The Series 2016A Obligations (and the related Principal Components and Interest Components) are special limited obligations payable solely from the Trust Estate established under the MTA Hudson Rail Yards Trust Agreement, dated as of September 1, 2016 (“Trust Agreement”), by and between the Authority and the Trustee. The Trust Estate consists principally of (i) Monthly Ground Rent (as defined herein) to be paid by the Ground Lease Tenants (as defined herein) of certain parcels being developed on and above the Eastern Rail Yard and Western Rail Yard portions of the John D. Caemmerer West Side Yards (“Hudson Rail Yards”) currently operated by The Long Island Rail Road Company (“LIRR”), (ii) monthly scheduled transfers from the Capitalized Interest Fund during the limited period that the Monthly Ground Rent is abated under the applicable Ground Lease, (iii) payments made by the Ground Lease Tenants if they elect to exercise their option to purchase the fee interest in such parcels (“Fee Purchase Payments”), (iv) certain Contingent Support Payments (as hereinafter defined) made by the Authority, (v) rights of the Authority to exercise certain remedies under the Ground Leases and (vi) rights of the Trustee to exercise certain remedies under the Ground Leases and the Fee Mortgages, all as more fully described herein. Pursuant to the Interagency Financing Agreement, dated as of September 1, 2016 (“Financing Agreement”), by and among the Authority, New York City Transit Authority, Manhattan and Bronx Surface Transit Operating Authority, LIRR, Metro-North Commuter Railroad Company, and MTA Bus Company (collectively, the “Related Transportation Entities”), and the Trustee, the Authority has agreed to pay to the Trustee the MTA Financing Agreement Amount with moneys provided by the Financing Agreement Payments (which are principally the revenues within the Trust Estate) and Interest Reserve Advances. The Authority has established a deposit account with Wells Fargo Bank, National Association, as depositary (“Depositary”), and the Authority will direct all Ground Lease Tenants to make Monthly Ground Rent and Fee Purchase Payments directly to the Depositary, which deposits will be transferred daily to the Trustee. In addition, in the event the Authority elects to exercise certain Authority Cure Rights upon the occurrence of a Ground Lease Payment Event of Default or is required to make certain Direct Cost Rent Credit Payments, as described herein, the Authority will make all payments relating to defaulted and future Monthly Ground Rent directly to the Depositary. The Series 2016A Obligations are not obligations of The City of New York (“City”) or the State of New York (“State”). EXcept with respect to Contingent Support Payments, which are payable by the authority from AVailable Transportation ReVenues (which are subordinate to the Authority’s obligation to pay debt serVice on its Transportation ReVenue Bonds), neither the Authority nor any of the other Related Transportation Entities is obligated to make any other payment with respect to the MTA Financing Agreement Amount or the Series 2016A Obligations (and the related Principal Components and Interest Components) from any source, OTHER THAN the Trust Estate (WHICH INCLUDES THE FINANCING AGREEMENT PAYMENTS). THE AUTHORITY HAS NO TAXING POWER. THE SERIES 2016A OBLIGATIONS ARE NOT OBLIGATIONS OF THE GROUND LEASE TENANTS. In the opinion of Nixon Peabody LLP and D. Seaton and Associates, P.A., P.C., Co-Bond Counsel, under existing law and relying on certain representations by the Authority and assuming the compliance by the Authority with certain covenants, the Interest Components of the MTA Financing Agreement Amount paid to Owners of the Series 2016A Obligations are: • excluded from an Owner’s federal gross income under Section 103 of the Internal Revenue Code of 1986, and • not a specific preference item for an Owner in calculating the federal alternative minimum tax, but • included in the adjusted current earnings of certain corporations in calculating the federal corporate alternative minimum tax. Also in Co-Bond Counsel’s opinion, under existing law, the Interest Components of the MTA Financing Agreement Amount paid to Owners of the Series 2016A Obligations are exempt from personal income taxes of the State and any political subdivisions of the State, including the City. See “TAX MATTERS” herein for a discussion of certain federal and State income tax matters. The Series 2016A Obligations are subject to optional and early mandatory redemption prior to maturity as described herein. The Series 2016A Obligations are not subject to mandatory scheduled sinking fund redemption. INVESTMENT IN THE SERIES 2016A OBLIGATIONS INVOLVES CERTAIN RISKS. INVESTORS SHOULD READ THIS ENTIRE OFFICIAL STATEMENT, INCLUDING THE SCHEDULE AND ATTACHMENTS HERETO AND ALL PORTIONS INCLUDED BY SPECIFIC CROSS-REFERENCE, TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION. SEE “CERTAIN RISK FACTORS” IN THIS OFFICIAL STATEMENT FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING AN INVESTMENT IN THE SERIES 2016A OBLIGATIONS. The Series 2016A Obligations are offered when, as, and if issued, subject to certain conditions, and are expected to be delivered through the facilities of The Depository Trust Company (“DTC”), on or about September __, 2016. Goldman, Sachs & Co. BofA Merrill Lynch Citigroup J.P. Morgan Jefferies Loop Capital Markets Morgan Stanley Ramirez & Co., Inc. RBC Capital Markets Siebert Brandford Shank & Co., L.L.C. Wells Fargo Securities September __, 2016 This Preliminary Official Statement and the information contained herein are subject to completion or amendment without notice. Under no circumstances shall this Preliminary to sell or the solicitation of Official Statement constitute an offer This Preliminary contained herein are subject to completion or amendment without notice. Official Statement and the information prior of such jurisdiction. or qualification under the securities to registration be unlawful laws solicitation, or sale would jurisdiction sale of these securities, in any in which such offer, nor shall there be any to buy, an offer * Preliminary, subject to change. Artist’s Renderings of Hudson Yards Development MTA’s Hudson Rail Yards The above illustrations are an artist’s rendering. Actual improvements may deviate from the above illustrations. Note: some of the buildings in the aerial view are adjacent to MTA’s Hudson Rail Yards and are not subject to the Ground Leases. $1,057,430,000* MTA Hudson Rail Yards Trust Obligations, Series 2016A Evidencing the Interests of the Owners Thereof in the MTA Financing Agreement Amount Payable By the Metropolitan Transportation Authority $375,000,000* ____% Series 2016A Term Obligation due November 15, 2046*, Yield: _______% CUSIP Number† ________ $307,000,000* ____% Series 2016A Term Obligation due November 15, 2051*, Yield: ________% CUSIP Number† ________ $375,430,000* ____% Series 2016A Term Obligation due November 15, 2056*, Yield: ________% CUSIP Number† ________ The Series 2016A Obligations are subject to early mandatory redemption and optional redemption. See “DESCRIPTION OF SERIES 2016A OBLIGATIONS – Redemption Prior to Maturity”, and Indicative Early Mandatory Redemption Schedules, which are included for illustrative purposes only, in this official statement for additional details regarding the early mandatory redemption provisions applicable to the Series 2016A Obligations. The Series 2016A Obligations are also subject to optional redemption from any available funds
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