County of Cabarrus, North Carolina Installment Financing Contract), Series 2016
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PRELIMINARY OFFICIAL STATEMENT DATED MARCH 1, 2016 NEW ISSUE – BOOK-ENTRY-ONLY Rating: Moody’s: Aa2 S&P: AA Fitch: AA (See “RATINGS” herein) In the opinion of Bond Counsel, under existing law and subject to compliance with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), as described herein, the portion of the Installment Payments designated and paid as interest with respect to the 2016 Limited Obligation Bonds is excludable from the gross income of the owners thereof for federal income tax purposes. In addition, such interest is not a specific item of tax preference for purposes of the federal alternative minimum tax imposed on corporations and other taxpayers, including individuals. Further, the portion of the Installment Payments designated and paid as interest with respect to the 2016 Limited Obligation Bonds is exempt from all present State of North Carolina income taxes. For a description of certain provisions of the Code that may affect the tax treatment of the portion of the Installment Payments designated and paid as interest with respect to the 2016 Limited Obligation Bonds for certain owners thereof, see the caption “LEGAL MATTERS - TAX TREATMENT” herein. $71,230,000* Limited Obligation Bonds (County of Cabarrus, North Carolina Installment Financing Contract), Series 2016 S COUNT RU Y Evidencing Proportionate Undivided Interests R 1792 S A E B A A L in the Right to Receive Certain Revenues Pursuant to C an Installment Financing Contract Between N A the Cabarrus County Development Corporation and the O N RT LI H CARO COUNTY OF CABARRUS, NORTH CAROLINA Dated: Date of Delivery Due: As shown on the inside cover This Official Statement has been prepared by the County of Cabarrus, North Carolina (the County“ ”) to provide information on the Cabarrus County Development Corporation Limited Obligation Bonds (County of Cabarrus, North Carolina Installment Financing Contract), Series 2016 (the “2016 Limited Obligation Bonds”). Selected information is presented on this cover page for the convenience of the user. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. Security: The 2016 Limited Obligation Bonds, together with any Additional Obligations (as defined herein) outstanding under the Indenture (as defined herein), evidence proportionate undivided interests in the right to receive certain Revenues (as defined herein) pursuant to an Installment Financing Contract dated as of March 1, 2016 (the “Contract”), between the Cabarrus County Development Corporation (the “Corporation”) and the County. As security for its obligations under the Contract, the County will execute and deliver to a deed of trust trustee for the benefit of the Corporation a Deed of Trust, Security Agreement and Fixture Filing dated as of March 1, 2016 (the “Deed of Trust”), granting, among other things, a lien of record on the Premises (as defined herein). The Corporation will assign all of its rights in the Deed of Trust and the Contract (except certain rights with respect to indemnification, the payment of certain expenses and receipt of certain notices) to the Trustee (as defined herein). The Deed of Trust grants a first lien of record on the Premises, subject to Permitted Encumbrances (as defined in the Deed of Trust). THE PRINCIPAL OR REDEMPTION PRICE OF AND INTEREST WITH RESPECT TO THE 2016 LIMITED OBLIGATION BONDS ARE PAYABLE SOLELY FROM AMOUNTS PAYABLE BY THE COUNTY UNDER THE CONTRACT, AND TO THE EXTENT PROVIDED IN THE INDENTURE, CERTAIN PROCEEDS OF THE SALE OF THE 2016 LIMITED OBLIGATION BONDS, CERTAIN INVESTMENT EARNINGS, CERTAIN NET PROCEEDS (AS DEFINED IN THE CONTRACT), IF ANY, AND CERTAIN AMOUNTS REALIZED FROM ANY SALE OR LEASE OF THE PREMISES. NONE OF THE CONTRACT, THE 2016 LIMITED OBLIGATION BONDS OR THE INTEREST WITH RESPECT THERETO CREATES A PLEDGE OF THE FAITH AND CREDIT OF THE COUNTY WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT LIMITATION. NO DEFICIENCY JUDGMENT MAY BE RENDERED AGAINST THE COUNTY FOR ANY AMOUNTS THAT MAY BE OWED BY THE COUNTY UNDER THE CONTRACT, AND THE TAXING POWER OF THE COUNTY IS NOT AND MAY NOT BE PLEDGED DIRECTLY OR INDIRECTLY OR CONTINGENTLY TO SECURE ANY MONEYS OWING BY THE COUNTY UNDER THE CONTRACT AND DUE THE OWNERS OF THE 2016 LIMITED OBLIGATION BONDS. See the caption “SECURITY AND SOURCES OF PAYMENT” herein. Redemption: The 2016 Limited Obligation Bonds are subject to optional, extraordinary optional and mandatory sinking fund redemption before maturity as described herein. Executed and Delivered Pursuant to: The 2016 Limited Obligation Bonds will be executed and delivered pursuant to the Indenture. Purpose: Proceeds of the 2016 Limited Obligation Bonds will be used to provide funds (a) to pay a portion of the costs of (i) constructing and equipping new public school facilities and expanding, rehabilitating, renovating and equipping existing public school facilities including, but not limited to, one new elementary school and two new middle schools, and (ii) various real and personal property improvements related to the foregoing (collectively, the “2016 Project”) and (b) to pay certain expenses incurred in connection with the execution and delivery of the 2016 Limited Obligation Bonds. Interest Payment Dates: April 1 and October 1 of each year, commencing October 1, 2016. Denominations: $5,000 or integral multiples thereof. Closing/Delivery Date: On or about March 31, 2016. Registration: Full book-entry only; The Depository Trust Company. Trustee: Regions Bank, Atlanta, Georgia Bond Counsel & Corporation Counsel: Nexsen Pruet, PLLC, Charlotte, North Carolina County Counsel: Richard M. Koch, Esq., Charlotte, North Carolina Underwriters’ Counsel: Pope Flynn, LLC, Charlotte, North Carolina. Piper Jaffray & Co. J.P. Morgan The date of this Official Statement is March __, 2016. This Preliminary Official Statement and the information contained herein are subject to completion or amendment without notice. The 2016 Limited Obligation Bonds may not be sold nor may offers be accepted prior to the time Official offers not be sold nor may Bonds may The 2016 Limited Obligation This Preliminary contained herein are subject to completion or amendment without notice. Official Statement and the information any jurisdictionObligation Bonds in any sale of the 2016 Limited nor shall there be buy, to Under no circumstances shall this Preliminary to sell or the solicitation of an offer Official Statement constitute an offer form. in final Statement is delivered prior of that jurisdiction. or qualification under the securities to registration be unlawful laws solicitation, or sale would in which such offer, * Preliminary; subject to change. MATURITIES, AMOUNTS, INTEREST RATES AND YIELDS $71,230,000* Limited Obligation Bonds (County of Cabarrus, North Carolina Installment Financing Contract), Series 2016 DUE PRINCIPAL APRIL 1* AMOUNT* INTEREST RATE YIELD CUSIP 2017 $3,565,000 2018 3,565,000 2019 3,565,000 2020 3,570,000 2021 3,565,000 2022 3,565,000 2023 3,565,000 2024 3,565,000 2025 3,560,000 2026 3,560,000 2027 3,560,000 2028 3,560,000 2029 3,560,000 2030 3,560,000 2031 3,560,000 2032 3,560,000 2033 3,560,000 2034 3,555,000 2035 3,555,000 2036 3,555,000 * Preliminary; subject to change. IN CONNECTION WITH THIS OFFERING, PIPER JAFFRAY & CO. AND J.P. MORGAN SECURITIES LLC (TOGETHER, THE “UNDERWRITERS”) MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2016 LIMITED OBLIGATION BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. No dealer, broker, salesman or other person has been authorized to give any information or to make any representation other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy, nor will there be any sale of the 2016 Limited Obligation Bonds by any person in any jurisdiction in which it is not lawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the County, the Corporation and other sources that are deemed to be reliable. The electronic distribution of this Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the 2016 Limited Obligation Bonds described herein to the residents of any particular state and is not specifically directed to the residents of any particular state. The 2016 Limited Obligation Bonds will not be offered or sold in any state unless and until they are either registered pursuant to the laws of such state, or qualified pursuant to an appropriate exemption from registration in such state. NEITHER THE 2016 LIMITED OBLIGATION BONDS NOR THE INDENTURE HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION BY REASON OF THE PROVISIONS OF SECTION 3(A)(2) OF THE SECURITIES ACT OF 1933, AS AMENDED AND SECTION 304(A)(4) OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED. THE REGISTRATION OR QUALIFICATION OF THE 2016 LIMITED OBLIGATION BONDS AND THE INDENTURE IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE 2016 LIMITED OBLIGATION BONDS AND THE INDENTURE HAVE BEEN REGISTERED OR QUALIFIED, AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES, WILL NOT BE REGARDED AS A RECOMMENDATION THEREOF. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE 2016 LIMITED OBLIGATION BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.