Economic Development Authority of the City of Norfolk Hospital Facilities Revenue Refunding Bonds (Sentara Healthcare), Series 2018
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SUPPLEMENT DATED MAY 1, 2018 TO PRELIMINARY OFFICIAL STATEMENT DATED APRIL 25, 2018 $138,530,000* ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF NORFOLK HOSPITAL FACILITIES REVENUE REFUNDING BONDS (SENTARA HEALTHCARE), SERIES 2018 _____________________________________________________________________________________________ This supplement to Preliminary Official Statement (the “Supplement”) supplements and amends certain information contained in the Preliminary Official Statement, dated April 25, 2018 (the “April 25 Preliminary Official Statement”) prepared with respect to the above-captioned bonds (the “Bonds”). The April 25 Preliminary Official Statement, as supplemented by this Supplement, is referred to herein as the “Preliminary Official Statement.” Sentara Healthcare (“Sentara”) may elect to request the Economic Development Authority of the City of Norfolk (the “Issuer”) to issue all or a portion of the Bonds in a “Long-Term Interest Rate Period” (as described in the Bond Indenture) (the “Long-Term Series 2018 Bonds”) commencing on the date of issuance of the Bonds and ending on _____________, 20__. Such Long-Term Series 2018 Bonds may hereafter be designated as a separate Series of the Bonds. This Supplement describes certain terms of the proposed Long-Term Series 2018 Bonds. All references in this Preliminary Official Statement to “the Bonds” without further delineation shall mean both the Bonds described in the April 25 Preliminary Official Statement being offered at a Fixed Rate as well as the Long- Term Series 2018 Bonds. All capitalized terms used herein without definition shall have the meaning ascribed thereto in the April 25 Preliminary Official Statement. Certain information in the April 25 Preliminary Official Statement is hereby supplemented or amended as follows: 1. The information on page 3 of the April 25 Preliminary Official Statement under the caption “INTRODUCTION” is hereby supplemented by adding new paragraph as the 12th paragraph of such section which shall read as follows: The Bonds are not subject to optional tender for purchase by the owners thereof. The Long-Term Series 2018 Bonds are subject to mandatory tender for purchase on _______________, 20___ (the “Initial Tender Date”) at a purchase price of par (the “Purchase Price”). Holders of the Long-Term Series 2018 Bonds will not have the option to retain their Long-Term Series 2018 Bonds after the Initial Tender Date. Payment of the Purchase Price of Bonds tendered for purchase on the Initial Tender Date is expected to be made from the proceeds of the remarketing of such Long-Term Series 2018 Bonds. The payment of the purchase price of the Bonds which are tendered for purchase and not remarketed may be made from amounts made available under a liquidity facility or credit facility if any is provided by Sentara as described herein. Sentara has not provided any liquidity facility or credit facility as of the date hereof. Sentara has not appointed a remarketing agent for the Long-Term Series 2018 Bonds, but is obligated to do so prior to the Initial Tender Date. Sentara is obligated to pay the purchase price of Long-Term Series 2018 Bonds tendered on the Initial Tender Date in accordance with the Bond Indenture. In the event that Sentara provides a liquidity facility or credit facility for the Long-Term Series 2018 Bonds, Sentara will be the third source of payment for the purchase price of such Long-Term Series 2018 Bonds, as described under “THE BONDS – Tender and Remarketing of Long-Term Series 2018 Bonds – Sources of Funds for Purchase of Long-Term Series 2018 Bonds. * Preliminary, subject to change. 2. The information on page 7 of the April 25 Preliminary Official Statement under the caption “THE BONDS – General” is hereby supplemented by adding at the end of the first paragraph under such caption the following: The Long-Term Series 2018 Bonds will bear interest at the interest rate per annum and mature on November 1 of the years and in the principal amounts set forth on the inside cover of this Official Statement. The Long-Term Series 2018 Bonds are subject to mandatory tender for purchase on _____________, 20__ (the “Initial Tender Date”). 3. The information on page 7 of the April 25 Preliminary Official Statement under the sub-heading “THE BONDS – Redemption Provisions – Optional Redemption, - Conversion, and – Mandatory Sinking Fund Redemption” (other than the last two paragraphs under - Mandatory Sinking Fund Redemption) is hereby deleted and shall be replaced with the following: Optional Redemption. The Long-Term Series 2018 Bonds and the Bonds other than the Long-Term Series 2018 Bonds maturing on or prior to November 1, 20__ are not redeemable at the option of Sentara. The Bonds maturing after November 1, 20__ are subject to redemption at the option of Sentara at any time on or after November 1, 20____. Any such redemption may be in whole or in part on any date on or after November 1, 20__ at a redemption price equal to 100% of the principal amount of the Bonds called for redemption, plus accrued interest to the redemption date. Conversion. The Bond Indenture permits conversion of the Bonds, or a portion thereof, to a new interest rate mode at any time on or after the first optional redemption date described above, or, in the case of the Long-Term Series 2018 Bonds, on the business day following the end of the initial Long-Term Period, whereupon such Bonds will be subject to mandatory tender. The Bond Indenture provides for a number of different interest rate modes, including a Daily Rate Mode, Two Day Mode, Weekly Interest Rate Mode, Bank Rate Mode, FRN Rate Mode, Short-Term Rate Mode, VRO Rate Mode, Long-Term Interest Rate Mode and Fixed Rate Mode. The Long-Term Series 2018 Bonds are subject to mandatory tender on the Initial Tender Date and may be remarketed to bear interest in a new Long-Term Mode after such Initial Tender Date, or may be converted to another interest rate mode permitted under the Bond Indenture at the option of Sentara and upon satisfaction of the conditions to such conversion under the Bond Indenture, and remarketed in that mode. Mandatory Sinking Fund Redemption. The Bonds and the Long-Term Series 2018 Bonds maturing on November 1 of the years 20__, 20___ and 20__ are subject to mandatory redemption prior to maturity at a redemption price equal to the principal amount thereof in the years and in the principal amounts shown below: Bonds Maturing November 1, 20__ Long-Term Series 2018 Bonds Maturing November 1, 20__ Year Year 20__ 20__ 20__ 20__ 20__ 20__ 20__* 20__* Bonds Maturing November 1, 20__ Long-Term Series 2018 Bonds Maturing November 1, 20__ Year Year 20__ 20__ 20__ 20__ 20__ 20__ 20__* 20__* 2 Bonds Maturing November 1, 20__ Long-Term Series 2018 Bonds Maturing November 1, 20__ Year Year 20__ 20__ 20__ 20__ 20__ 20__ 20__* 20__* 4. The information on page 9 of the April 25 Preliminary Official Statement under the heading “THE BONDS” is hereby supplemented by adding at the end of the subsection entitled “- Redemption Provisions” a new subsection as follows: Tender and Remarketing of Long-Term Series 2018 Bonds Optional Tender. The Long-Term Series 2018 Bonds are not subject to tender at the option of the owners thereof prior to the Initial Tender Date. Mandatory Tender. The Long-Term Series 2018 Bonds are subject to mandatory tender for purchase on __________, 20__, the Initial Tender Date, at a purchase price of par (the “Purchase Price”). Owners of the Long- Term Series 2018 Bonds will not have the option to retain Long-Term Series 2018 Bonds after the Initial Tender Date. The Bond Trustee shall give Electronic Notice of the mandatory tender of the Long-Term Series 2018 Bonds on the Initial Tender Date as provided in the Bond Indenture which notice shall state: (1) that the Purchase Price of any Long-Term Series 2018 Bond so subject to mandatory tender for purchase shall be payable only upon surrender of such Long-Term Series 2018 Bond to the Bond Trustee at its Principal Office; (2) that all Long-Term Series 2018 Bonds so subject to mandatory tender for purchase shall be purchased on the Mandatory Purchase Date which shall be explicitly stated; and (3) that in the event that any Holder of a Long-Term Series 2018 Bond so subject to mandatory tender for purchase shall not surrender such Long-Term Series 2018 Bond to the Bond Trustee for purchase on such Mandatory Purchase Date, then such Long-Term Series 2018 Bond shall be deemed to be an Undelivered Bond, and that no interest shall accrue thereon on and after such Mandatory Purchase Date and that the Holder thereof shall have no rights under this Bond Indenture other than to receive payment of the Purchase Price thereof. Undelivered Bonds. If any Holder of a Long-Term Series 2018 Bond subject to mandatory tender for purchase pursuant to the Bond Indenture fails to deliver such Long-Term Series 2018 Bond to the Bond Trustee at the place and on the Purchase Date and at the time specified, or fails to deliver such Long-Term Bond properly endorsed, such Long-Term Series 2018 Bond will constitute an “Undelivered Bond.” If funds in the amount of the Purchase Price of the Undelivered Bond are available for payment to the Holder thereof on the Purchase Date and at the time specified, from and after the Purchase Date and time of that required delivery, (1) such Undelivered Bond will be deemed to be purchased and will no longer be deemed to be Outstanding under the Bond Indenture; (2) interest will no longer accrue thereon; and (3) funds in the amount of the Purchase Price of such Undelivered Bond will be held by the Bond Trustee un-invested for the benefit of the Holder thereof (provided that the Holder will have no right to any investment proceeds derived from such funds), to be paid on delivery (and proper endorsement) of such Undelivered Bond to the Bond Trustee at its Principal Office for delivery of Bonds.