Charter School Bond Disclosure Template Part 1
Total Page:16
File Type:pdf, Size:1020Kb
NEW ISSUE-FULL BOOK-ENTRY Rating: “…” See “RATING” herein. $................ “STATE” SCHOOL FINANCE AUTHORITY CHARTER SCHOOL REVENUE BONDS (“SAMPLE CHARTER SCHOOL” PROJECT) $................ $................ Series 2014A Series 2014B (Taxable) Dated: Date of Delivery Due: October 1, as shown on inside cover This cover page contains information for general reference only. It is not intended as a summary of these issues. Investors must read the entire Offering Statement to obtain information essential to making an informed investment decision. The “Sample State” School Finance Authority Charter School Revenue Bonds (“Sample Charter School” Project), Series 2014A, in the aggregate principal amount of $.............(the “Series 2014A Bonds” or the “Tax-Exempt Bonds”) and the “Sample State” School Finance Authority Charter School Revenue Bonds (“Sample Charter School” Project), Series 2014B (Taxable), in the aggregate principal amount of $...... (the “Series 2014B Bonds” or the “Taxable Bonds” and, together with the Series 2014A Bonds, the “Bonds”) will be issued by the “Sample State” School Finance Authority (the “Authority”) pursuant to an Indenture, dated as of February 1, 2014 (the “Indenture”), by and between the Authority and “Sample Trustee”, as trustee (the “Trustee”). The Authority will loan the proceeds of the Bonds to “Sample Charter School” Charter School, Inc. a “Sample State” nonprofit, public benefit corporation and charter school (the “Borrower”), pursuant to a Loan Agreement, dated as of February 1, 2014, by and between the Authority and the Borrower (the “Loan Agreement”). The Bonds are limited obligations of the Authority payable only out of certain revenues and other amounts held in the funds established by the Indenture (except the Rebate Fund). The obligations of the Borrower under the Loan Agreement are payable from the Gross Revenues (as defined herein) required to be deposited with the Trustee pursuant to the Indenture. THE BORROWER MAY NOT CHARGE TUITION AND HAS NO TAXING AUTHORITY. Interest on the Bonds will be payable semiannually on each April 1 and October 1 commencing October 1, 2014. The Bonds are being issued as fully registered bonds and initially will be registered in the name of Cede & Co. as nominee for the Depository Trust Company, New York, “Sample State” (‘DTC”). DTC will act as securities depository for the Bonds. The Bonds are subject to optional, mandatory and extraordinary redemption prior to maturity as described under “THE BONDS-Redemption” herein. The Bonds constitute special, limited obligations of the Authority and except to the extent payable from Bond proceeds and investment income, are payable solely from certain payments, revenues and other amounts derived by the Authority pursuant to the terms of the Loan Agreement. The Bonds are secured by a pledge of (a) certain rights and interests of the Authority under and pursuant to the Loan Agreement, (b) certain rights and interests of the Authority under and pursuant to the Deed of Trust, encumbering the K-8 Facility, and all rights and interest of the Authority in the K-8 Facility subject to Permitted Encumbrances, (c) the Pledged Revenues and all rights and interests of the Authority in the Pledged Revenues, subject to Permitted Encumbrances, except certain rights of the Authority set forth in the Loan Agreement, (d) the rights and interests of the Authority and the Corporation in the Lease, except certain rights of the Authority and the Corporation set forth in the Lease, (e) all Funds created in the Indenture (other than the Rebate Fund), subject to certain provisions of the Indenture, and (f) any and all other interests in real or personal property specifically mortgaged, pledged or hypothecated, as and for additional security under the Indenture as set forth therein. Payments to be received from the Charter School by the Corporation under the Lease will be the Corporation’s sole expected source of Pledged Revenues and the Lease is subject to annual appropriation by the Charter School. THE BONDS ARE NOT AND SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF “SAMPLE STATE” (THE “STATE”) OR OF ANY POLITICAL SUBDIVISION THEREOF, OTHER THAN THE AUTHORITY, AND ARE NOT AND SHALL NOT BE DEEMED TO BE A PLEDGE OF THE FAITH AND CREDIT OF THE STATE, OR OF ANY POLITICAL SUBDIVISION THEREOF, BUT SHALL BE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR UNDER THE INDENTURE. NEITHER THE STATE NOR THE AUTHORITY SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, OR THE REDEMPTION PREMIUM, IF ANY, OR INTEREST THEREON, EXCEPT FROM THE FUNDS PROVIDED THEREFOR UNDER THE INDENTURE. THE ISSUANCE OF THE BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY OR TO PLEDGE ANY FORM OF TAXATION OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. THE AUTHORITY HAS NO TAXING POWER. NOTHING IN THE INDENTURE, THE ACT OR OTHERWISE IS AN UNDERTAKING BY THE AUTHORITY OR THE STATE OR ANY POLITICAL SUBDIVISION THEREOF TO FUND THE TRANSFERS DESCRIBED IN THE INTERCEPT NOTICE (DEFINED HEREIN) OR TO MAKE FUNDS AVAILABLE TO THE BORROWER IN ANY AMOUNT OR AT ANY TIME. The Bonds are offered when, as and if issued by the Authority and received by the Underwriter, subject to prior sale and approval of legality by “Sample Bond Counsel” “Sample State”, Bond Counsel to the Authority, the approval of certain matters for the Authority by the “Sample State Attorney General”, Attorney General of the State of “Sample State”, and the approval of certain matters for the Borrower by the Law Office of “Sample Attorney”, “Sample State”. Certain legal matters will be passed upon for the Authority by “Sample Disclosure Counsel”, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by “Sample Underwriter’s Counsel”, “Sample State”, Underwriter’s Counsel. It is expected that the Bonds in definitive form will be available for delivery through the facilities of The Depository Trust Company in New York, New York, on or about February 7, 2014 Dated: Month, Day, Year RBC Capital Markets Piper Jaffrey TD Securities George K. Baum Baird Janney D.A. Davidson & Co. PNC Jefferies Oppenheimer & Co. Inc. Ziegler NO DEALER, BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE INSTITUTIONS OR THE UNDERWRITERS TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ANY OF THE FOREGOING. ALL INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE INSTITUTIONS AND OTHER SOURCES WHICH ARE BELIEVED TO BE ACCURATE AND RELIABLE, BUT NO REPRESENTATION, WARRANTY, OR GUARANTEE IS MADE AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION IN THIS ii OFFICIAL STATEMENT. THE UNDERWRITERS HAVE PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT: THE UNDERWRITERS HAVE REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, THEIR RESPONSIBILITIES TO INVESTORS UNDER FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITERS DO NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. NOTHING CONTAINED IN THIS OFFICIAL STATEMENT CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR THERE BE ANY SALE OF THE BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION AND EXPRESSIONS OF OPINION HEREIN ARE SUBJECT TO COMPLETION AND AMENDMENT. NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY STATEMENT NOR ANY SALE MADE HEREUNDER WILL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE INSTITUTIONS SINCE THE DATE HEREOF. This Official Statement contains summaries believed to be accurate of certain documents, but reference is hereby made to the actual documents, copies of which are incorporated by reference and are available at the offices of the Trustee, and all such summaries are qualified in their entirety by this reference. Prospective purchasers are referred to the Act, the Charter Schools Act, the Charters of each of the Institutions, the Loan Agreement, the Indenture, the Custody Agreement, the Mortgage, and the Guaranty, which documents are available for inspection at the principal corporate trust office of the Trustee specified herein. During the initial offering period with respect to the Series 2012 Bonds, copies of all such documents in draft or executed form may be obtained by contacting “Sample Underwriter”. The information included herein under the caption “THE BONDS—Book-Entry Only System” concerning DTC has been furnished by DTC for inclusion herein. The information included herein under the captions “THE ISSUER” and “LITIGATION AND ADMINISTRATIVE PROCEEDINGS—The Issuer” has been furnished by the Issuer for inclusion herein. The Institutions have furnished all information in this Official Statement and the Appendices attached hereto relating to the Institutions, the Series 2014 Facility and the Estimated Sources and Application of Funds, including all information set forth in the Appendices hereto. All other information included herein has been obtained from sources which are believed to be reliable. This Official Statement contains statements which, to the extent they are not recitations of historical fact, constitute “forward looking statements.” In this respect, the words “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe” and similar expressions are intended to identify forward looking statements. A number of important factors affecting the Institutions’ financial results could cause actual results to differ materially from those stated in the forward looking statements. See “CERTAIN BONDHOLDERS’ RISKS” and “APPENDIX A.” iii MATURITY SCHEDULE $........ “SAMPLE STATE” SCHOOL FINANCE AUTHORITY CHARTER SCHOOL REVENUE BONDS (“SAMPLE CHARTER SCHOOL” PROJECT) $............. Series 2014A $....... 5.00% Bonds Due October 1, 2022- Priced to Yield 4.30% CUSIP XXXXXX XXX $.......... 5.00% Bonds Due October 1, 2033- Priced to Yield 4.83% CUSIP XXXXXX XXX $....