Metropolitan Transit Authority of Harris County, Texas
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OFFICIAL STATEMENT DATED AS OF SEPTEMBER 9, 2011 NEW ISSUES — BOOK-ENTRY-ONLY Ratings: See “OTHER INFORMATION— RATINGS” herein In the opinions of Co-Bond Counsel, interest on the Series 2011 Obligations is excludable from gross income for federal income tax purposes under existing law, subject to the matters described under “TAX MATTERS” herein, and is not includable in the federal alternative minimum taxable income of individuals. See “TAX MATTERS” for a discussion of the opinions of Co-Bond Counsel, including the alternative minimum tax consequences for corporations. METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY, TEXAS $461,010,000 $49,405,000 SALES AND USE TAX BONDS SALES AND USE TAX CONTRACTUAL OBLIGATIONS SERIES 2011A SERIES 2011B Interest accrues from the date of delivery CUSIP Prefix: 41422E Due: November 1, as shown on the inside cover The Sales and Use Tax Bonds, Series 2011A (the “Series 2011A Sales Tax Bonds”), and the Sales and Use Tax Contractual Obligations, Series 2011B (the “Series 2011B Contractual Obligations” and, together with the Series 2011A Sales Tax Bonds, the “Series 2011 Obligations”) are being issued by the Metropolitan Transit Authority of Harris County, Texas (the “Authority”) for the purposes described herein. See “PLAN OF FINANCE.” Interest on the Series 2011 Obligations will accrue from the date of delivery at the rates specified on the inside cover page and will be payable on each November 1 and May 1, commencing November 1, 2011, and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The definitive Series 2011 Obligations will be registered and delivered only to Cede & Co., the nominee of The Depository Trust Company (“DTC”) pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Series 2011 Obligations may be acquired in denominations of $5,000 or integral multiples thereof. No physical delivery of the Series 2011 Obligations will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Series 2011 Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners thereof. See “BOOK-ENTRY-ONLY SYSTEM” herein. The initial Paying Agent/Registrar and Trustee is Wells Fargo Bank, N.A., Dallas, Texas. See “THE SERIES 2011 OBLIGATIONS — TRUSTEE/PAYING AGENT/REGISTRAR.” The Series 2011 Obligations are secured, equally and ratably with outstanding and any future parity obligations (collectively, the “Senior Lien Obligations”), by a grant to Wells Fargo Bank, N.A., as trustee (the “Trustee”) of a senior lien on and pledge of 75% of the sales and use tax revenues collected and received by the Authority, plus any investment income earned on moneys in certain funds to which such revenue is deposited (together, the “Pledged Revenues”). The Series 2011 Obligations are also secured by separate debt service reserve funds for each series of the Series 2011 Obligations and certain parity obligations. See “THE SERIES 2011 OBLIGATIONS — SECURITY AND SOURCE OF PAYMENT.” A sales and use tax is levied by the Authority at the rate of 1% on all taxable transactions within the Authority’s boundaries. The Series 2011A Sales Tax Bonds are being issued to (a) pay a portion of the costs of two light rail lines as part of the Authority’s METRORail light rail system (as further described herein, the “Project”), (b) refund certain outstanding commercial paper notes (the “Refunded CP Notes”), (c) fund capitalized interest on the Series 2011A Sales Tax Bonds, and (d) pay costs of issuance of the Series 2011A Sales Tax Bonds. The Series 2011B Contractual Obligations are being issued to (a) purchase 100 hybrid electric transit buses, (b) fund capitalized interest on the Series 2011B Contractual Obligations and (c) pay costs of issuance of the Series 2011B Contractual Obligations. See “PLAN OF FINANCE” and “THE SERIES 2011 OBLIGATIONS – AUTHORITY FOR ISSUANCE.” SEE INSIDE COVER PAGE FOR MATURITY SCHEDULES AND PRICES The Series 2011 Obligations are subject to optional redemption and mandatory sinking fund redemption prior to maturity as set forth herein. See “THE SERIES 2011 OBLIGATIONS — OPTIONAL REDEMPTION” and “— MANDATORY SINKING FUND REDEMPTION.” The Series 2011 Obligations are offered for sale when, as and if issued by the Authority and accepted by the Underwriters listed below, subject prior to sale, to the withdrawal or modification of the offer without notice, and, prior to delivery, to the approving opinions of the Attorney General of Texas and the opinions of Fulbright & Jaworski L.L.P., Houston, Texas, and Escamilla, Poneck & Cruz, LLP, Houston, Texas, Co-Bond Counsel. See APPENDIX C —“FORMS OF CO-BOND COUNSELS’ OPINIONS.” Certain additional matters will be passed upon for the Authority by its Special Disclosure Counsel, Andrews Kurth LLP, Houston, Texas. Certain matters will be passed upon for the Underwriters by Haynes and Boone, LLP, Houston, Texas, and West & Associates, L.L.P., Houston, Texas, as Co-Counsel to the Underwriters. It is expected that the Series 2011 Obligations will be available for delivery through The Depository Trust Company on or about September 28, 2011. GOLDMAN, SACHS & CO. CABRERA CAPITAL MARKETS, LLC JEFFERIES & COMPANY LOOP CAPITAL MARKETS FIDELITY CAPITAL MARKETS RAYMOND JAMES & ASSOCIATES RBC CAPITAL MARKETS WELLS FARGO SECURITIES HOU:3152510.1 MATURITY SCHEDULES $461,010,000 Sales and Use Tax Bonds, Series 2011A Maturity Principal Interest Offering CUSIP Maturity Principal Interest Offering CUSIP (November 1) Amount Rate Yield(2) No.(3) (November 1) Amount Rate Yield(2) No.(3) 2015 $ 7,660,000 5.000% 0.780% 41422ECU5 2024(1) $12,015,000 5.000% 3.190% 41422EDD2 2016 8,050,000 5.000 1.150 41422ECV3 2025(1) 12,630,000 5.000 3.330 41422EDE0 2017 8,465,000 5.000 1.480 41422ECW1 2026(1) 13,280,000 5.000 3.480 41422EDF7 2018 8,895,000 5.000 1.800 41422ECX9 2027(1) 13,960,000 5.000 3.610 41422EDG5 2019 9,355,000 5.000 2.100 41422ECY7 2028(1) 14,670,000 5.000 3.710 41422EDH3 2020 9,835,000 5.000 2.380 41422ECZ4 2029(1) 15,425,000 5.000 3.800 41422EDJ9 2021 10,340,000 5.000 2.560 41422EDA8 2030(1) 15,100,000 5.000 3.870 41422EDK6 2022(1) 10,870,000 5.000 2.780 41422EDB6 2031(1) 16,190,000 5.000 3.940 41422EDL4 2023(1) 11,425,000 5.000 3.000 41422EDC4 $99,285,000 5.000% SALES TAX BONDS DUE NOVEMBER 1, 2036, OFFERING YIELD 4.160%; CUSIP 41422EDM2(1) (2)(3)(4) $163,560,000 5.000% SALES TAX BONDS DUE NOVEMBER 1, 2041, OFFERING YIELD 4.180%; CUSIP 41422EDNO(1) (2)(3)(4) (Interest accrues from date of delivery) $49,405,000 Sales and Use Tax Contractual Obligations, Series 2011B Maturity Principal Interest Offering CUSIP Maturity Principal Interest Offering CUSIP (November 1) Amount Rate Yield(2) No.(3) (November 1) Amount Rate Yield(2) No.(3) 2012 $3,295,000 2.000% 0.350% 41422EDP5 2018 $4,150,000 4.000% 1.800% 41422EDV2 2013 3,395,000 4.000 0.450 41422EDQ3 2019 4,320,000 4.000 2.100 41422EDW0 2014 3,535,000 4.000 0.650 41422EDR1 2020 4,495,000 4.000 2.380 41422EDX8 2015 3,680,000 4.000 0.780 41422EDS9 2021 4,680,000 4.000 2.560 41422EDY6 2016 3,830,000 4.000 1.150 41422EDT7 2022(1) 4,895,000 5.000 2.780 41422EDZ3 2017 3,985,000 4.000 1.480 41422EDU4 2023(1) 5,145,000 5.000 3.000 41422EEA7 (Interest accrues from date of delivery) (1) The Authority reserves the right, at its option, to redeem Series 2011 Obligations having stated maturities on and after November 1, 2022, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on November 1, 2021, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. See “THE SERIES 2011 OBLIGATIONS — OPTIONAL REDEMPTION.” (2) The initial offering yield is calculated to maturity or the first optional par redemption date, whichever produces a lower yield. (3) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by Standard and Poor's CUSIP Service Bureau, a Division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. None of the Authority, the Co-Financial Advisors or the Underwriters is responsible for the selection or correctness of the CUSIP numbers set forth herein. (4) Subject to mandatory sinking fund redemption. See “THE SERIES 2011 OBLIGATIONS — MANDATORY SINKING FUND REDEMPTION.” ii HOU:3152510.1 The Series 2011 Obligations have not been registered under the United States Securities Act of 1933, as amended, in reliance upon exemptions contained in such Act. Any registration or qualification of the Series 2011 Obligations in accordance with applicable provisions of securities laws of the states in which the Series 2011 Obligations may have been registered or qualified and the exemption from registration or qualification in other states cannot be regarded as a recommendation thereof. In making an investment decision, investors must rely on their own examination of the terms of this offering, including the merits and risks involved. The Series 2011 Obligations 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 Official Statement.