$131,000,000 Santa Clara Valley Water District Morgan Stanley De La Rosa & Co., Inc. Lehman Brothers Backstrom Mccarley Berr
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NEW ISSUE-Book Entry Only See "RATINGS" herein. $131,000,000 SANTA CLARA VALLEY WATER DISTRICT Revenue Certificates of Participation (Water Utility System Improvement Projects) Series 2007A and Taxable Series 2007B $77,270,000 $53,730,000 Series 2007A Taxable Series 2007B Dated: Date of Delivery Due: June 1, as shown on the inside cover The proceeds of the Certificates will be used (a) to finance the cost of certain water utility system improvements, (b) to reimburse the District for costs previously expended on certain water utility system improvements, (c) to purchase debt service reserve surety bonds for the Certificates, (d) to capitalize a portion of interest payable with respect to the Certificates on and prior to June 1, 2009, and (e) to pay the costs of executing and delivering the Certificates. Interest represented by the Series 2007A Certificates is payable on December 1, 2007 and each June 1 and December 1 thereafter. Interest with respect to the Series 2007B Certificates is payable on December 1, 2007, and each March 1, June 1, September 1, and December 1 thereafter. The Certificates will be prepared as fully registered Certificates and, when delivered, will be registered in the name of CEDE & Co., as nominee of The Depository Trust Company, New York, New York. DTC will act as securities depository of the Certificates. Purchasers of beneficial interests will not receive certificates representing their interest in the Certificates. So long as CEDE & Co. is the registered owner of the Certificates, as nominee of DTC, references herein to the registered owners shall mean CEDE & Co., as aforesaid, and shall not mean the beneficial owners of the Certificates. Individual purchases of the Certificates will be made in book-entry form only in authorized denominations of $5,000 or any integral multiple thereof. Principal and interest are payable directly to DTC by U.S. Bank National Association, San Francisco, California, as Trustee. Upon receipt of payments of principal and interest, DTC is obligated to remit such principal and interest to the DTC Participants for subsequent disbursement to the beneficial owners of the Certificates. The Certificates are payable from the Installment Payments. The obligation of the District to make the Installment Payments is payable from, and is secured by a pledge of and lien on, the District Water Utility System Revenues. The Installment Payments are payable from Net Water Utility System Revenues on a parity with the lien securing the $98,115,000 outstanding Series 2006 Bonds and on a parity with certain amounts payable by the District with respect to a State of California Department of Water Resources loan and any obligations hereafter issued or incurred or a parity therewith subject to the terms of the Water Utility System Master Resolution. The obligation of the District to make the Installment Payments does not constitute a debt of the District or of the State of California or of any political subdivision thereof in contravention of any constitutional or statutory debt limitation or restriction. The Certificates are subject to optional, mandatory and extraordinary prepayment prior to maturity as described herein. Payment of the principal and interest evidenced by each series of Certificates will be insured by a financial guaranty insurance policy to be issued simultaneously with the delivery of such series of Certificates by MBIA Insurance Corporation. In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, San Francisco, California, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, the portion of each Installment Payment constituting interest (and original issue discount) with respect to the Series 2007A Certificates is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the {ilrther opinion of Special Counsel, the portion of each Installment Payment constituting interest (and original issue discount) with respect to the Certificates is exempt from State of California personal income tax. See "TAX MATTERS" herein with respect to tax consequences with respect to the Certificates. THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS ARE ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. The Certificates are offered when, as and if executed and delivered to the Underwriters, subject to the approval as to the legality of certain matters by Stradling Yocca Carlson & Rauth, a Professional Corporation, Special Counsel, and certain other conditions. Certain legal matters will be passed upon for the District and the Corporation by District Counsel, Debra L. Cauble, Esq., for the Underwriters by their counsel, Sidley Austin LLP for the Insurer, by its general counsel, and for the Trustee by its counsel. It is expected that the Certificates in book-entry form will be available for delivery through the facilities of DTC on or about October 1, 2007. MORGAN STANLEY LEHMAN BROTHERS DE LA ROSA & CO., INC. BACKSTROM MCCARLEY BERRY & CO., LLC Dated: September 11, 2007 $131,000,000 Santa Clara Valley Water District Revenue Certificates of Participation (Water Utility System Improvement Projects) Series 2007A and Taxable Series 2007B $77,270,000 $53,730,000 Series 2007A Taxable Series 2007B MATURITY SCHEDULE $77,270,000 Series 2007A Payment Date Principal Payment Date Principal (June 1) Amount Interest Rate Yield (June 1) Amount Interest Rate Yield 2010 $1,310,000 4.00% 3.38% 2015 $1,690,000 5.00% 3.55% 2011 1,375,000 4.00 3.42 2016 1,770,000 4.00 3.63 2012 1,430,000 4.00 3.45 2017 1,860,000 4.00 3.73 2013 1,505,000 5.00 3.47 2018 1,945,000 4.00 3.s2c 2014 1,580,000 5.00 3.50 2019 2,040,000 5.00 3.89c 2020 2,135,000 5.00 3.96c $4,630,000 5.00% Term Certificates due June 1, 2022 - Yield 4.12%c $5,085,000 4.75% Term Certificates due June 1, 2024 - Yield 4.32%c $5,620,000 4.75% Term Certificates due June 1, 2026 - Yield 4.39%c $9,475,000 4.75% Term Certificates due June 1, 2029 - Yield 4.53%c $33,820,000 5.00% Term Certificates due June 1, 2037 - Yield 4.48%c $53, 730,0001 Taxable Series 2007B Due June 1 Interest Rate Spread % 2037 .32% c Priced to call on June 1, 201 7. 1 The Series 2007B Certificates will represent interest from October 1, 2007 through and including November 30, 2007, at (a) the Three-Month LIBOR Rate determined as of September 27, 2007, plus (b) the per annum interest rate spread specified above, provided that the Series 2007B Certificates may not represent interest at more than the maximum rate of 17% per annum. Thereafter the Series 2007B Certificate will represent interest from the most recent interest payment date therefore to which interest has been paid or duly provided for at (a) the Three-Month LIBOR Rate for such period plus (b) the per annum interest rate spread specified above, provided that the Series 2007B Certificates may not represent interest in any interest period at more than the maximum rate of 1 7% per annum. SANTA CLARA VALLEY WATER DISTRICT 5750 Almaden Expressway San Jose, California 95118 BOARD OF DIRECTORS AND OFFICERS OF THE DISTRICT Tony Estremera, Chair, At Large Rosemary Kamei, Vice-Chair District I Joe Judge, Director District 2 Richard P. Santos, Director District 3 Larry Wilson, Director District 4 Patrick Kwok, Director District 5 Sig Sanchez, At Large BOARD OF DIRECTORS AND OFFICERS OF THE PUBLIC FACILITIES FINANCING CORPORATION Vincent Garrod, President David Vanni, Vice President David R. Johnson, Chief Financial Officer DISTRICT STAFF Stanley M. Williams, Chief Executive Officer Debra L. Cauble, District Counsel Peter Ng, Chief Financial Officer Walter L. Wadlow, Chief Operating Officer, Water Utility James M. Fiedler, Chief Operating Officer, Watersheds Nai Hsueh, Chief Operating Officer, Capital Program Services Lauren L. Keller, Clerk of the Board SPECIAL COUNSEL Stradling Yocca Carlson & Rauth, a Professional Corporation Sacramento, California TRUSTEE U.S. Bank National Association San Francisco, California FINANCIAL ADVISOR Public Resources Advisory Group Los Angeles, California [THIS PAGE INTENTIONALLY LEFT BLANK] No dealer, broker, salesperson or other person has been authorized by the Underwriters, the District, the Corporation or the Trustee to give any information to make any representations other than those contained herein and, if given or made, such other information or representation must not be relied upon as having been authorized by auy of the foregoing. This Official Statement does not constitute au offer to sell or the solicitation of au offer to buy nor shall there be any sale of the Certificates by a person in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This Official Statement is not to be construed as a contract with the purchasers or any of the owners of Certificates. Any statement made in this Official Statement involving estimates, forecasts or matters of opinion, whether or not expressly so stated, is intended solely as such and not as representations of fact. The information set forth herein has been furnished by the District, The Depository Trust Compauy, aud other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as representations by the Underwriters. In reliance upon exemptions contained in such acts, the Certificates have not been registered under the Securities Act of 1933, as amended, nor has the Trust Agreement been qualified under the Trust Indenture Act of 1939, as amended.