In the Opinion of Bond Counsel, the Bonds and Interest Thereon Are Exempt from All State, County, and Municipal Taxation in the State of Arkansas Under Existing Law
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NEW ISSUE RATING: Moody’s: “Aa2” BOOK-ENTRY ONLY (See “BOND RATING” herein) In the opinion of Bond Counsel, the Bonds and interest thereon are exempt from all state, county, and municipal taxation in the State of Arkansas under existing law. See the caption “TAX EXEMPTION” herein. $7,140,000 CENTRAL ARKANSAS WATER REFUNDING WATER REVENUE BONDS, SERIES 2020D (TAXABLE) Dated: Date of Delivery Due: October 1, as shown below The Bonds are issuable only as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, New York, to which principal, premium, if any, and interest payments on the Bonds will be made so long as Cede & Co. is the registered owner of the Bonds. Individual purchases of the Bonds will be made only in book-entry form, in denominations of $5,000 or integral multiples thereof. Individual purchasers (“Beneficial Owners”) of Bonds will not receive physical delivery of bond certificates. See the caption “BOOK-ENTRY ONLY SYSTEM” herein. The Bonds shall bear interest from the date of delivery, payable on April 1 and October 1 of each year, commencing April 1, 2021. All such interest payments shall be payable to the persons in whose name such Bonds are registered on the bond registration books maintained by Regions Bank, Little Rock, Arkansas, as trustee (the “Trustee”), as of the fifteenth day preceding the applicable interest payment date. Principal of and premium, if any, on the Bonds shall be payable at the principal corporate trust office of the Trustee. So long as DTC or its nominee is the registered owner of the Bonds, disbursement of such payments to DTC Participants is the responsibility of DTC, and the disbursement of such payments to Beneficial Owners is the responsibility of DTC Participants or Indirect Participants, as more fully described herein. Pursuant to the terms and provisions of a Trust Indenture dated as of the date of delivery of the Bonds (the “Indenture”), between Central Arkansas Water, a public body corporate and politic of the State of Arkansas (the “Issuer”), and the Trustee, payment of the principal of and premium, if any, and interest on the Bonds is secured by a pledge of the Stabilized Net Revenues (as defined herein) of the consolidated water system of the Cities of Little Rock and North Little Rock, Arkansas (the “Water System”). The pledge of Stabilized Net Revenues securing the Bonds is made on a parity basis with the pledge thereof securing the Issuer’s Refunding Water Revenue Bond, Series 2010A (the “Series 2010A Bond”); Refunding Revenue Bonds, Series 2010C (Watershed Protection Project) (the “Series 2010C Bonds”); Water Revenue Bond, Series 2011A (Wye Mountain Extension Project) (the “Series 2011A Bond”); Capital Improvement Water Revenue Bonds, Series 2012A (the “Series 2012A Bonds”); Refunding Water Revenue Bonds, Series 2014 (the “Series 2014 Bonds”); Refunding Water Revenue Bonds, Series 2016 (that portion remaining after the partial refunding by the Bonds) (the “Series 2016 Bonds”); the 1.5% Water Revenue Bond (Wilson Pump Station Project), Series 2017A (the “Series 2017A Bond”); Water Revenue Bond, Series 2018B (the “Series 2018B Bonds”); Water Revenue Bond (Ozark Point Water Treatment Plant Project), Series 2019A (the “Series 2019A Bond”); and any subsequently issued Parity Debt (as defined herein) including, the Issuer’s proposed Capital Improvement and Refunding Water Revenue Bonds, Series 2020B, of even date with the Bonds in the original principal amount of $12,920,000 (the “Series 2020B Bonds”); and the Issuer’s proposed Refunding Water Revenue Bonds, Series 2020C (Green Bonds), of even date herewith in the original principal amount of $31,825,000 (the “Series 2020C Bonds”). The pledge of Stabilized Net Revenues securing the Bonds is senior to the pledge in favor of the Issuer’s Acquisition and Construction Water Revenue Bonds (Maumelle Water System Acquisition Project), Series 2016 (the “Subordinate 2016 Bonds”) and the Issuer’s Water Revenue Bond (Paron-Owensville Water Authority (POWA) Project), Series, 2020A (the “Subordinate 2020A Bonds”). The Water System is owned and operated by the Issuer. The Issuer has covenanted in the Indenture to establish and maintain rates for Water System services which shall yield Stabilized Net Revenues in each forthcoming fiscal year at least equal to the sum of (i) 120% of the aggregate debt service due on the Parity Debt, the Bonds, and any other Parity Debt during the forthcoming fiscal year, and (ii) 100% of the amounts, if any, required to be deposited in any debt service reserve fund or account securing the Series 2010A Bond, the Series 2010C Bonds, the Series 2011A Bond, the Series 2012A Bonds, the Series 2014 Bonds, the Series 2016 Bonds, the Series 2017A Bond, the Series 2018B Bonds, the Series 2019A Bonds, the Series 2020B Bonds, the Series 2020C Bonds, the Bonds, or any additional Parity Debt during the forthcoming fiscal year. See the caption “SECURITY FOR THE BONDS” herein. The Bonds are subject to optional redemption prior to maturity as more fully described under the caption “THE BONDS—Redemption” herein. The Bonds are special obligations of the Issuer secured by and payable solely from the Stabilized Net Revenues of the Water System and other amounts available under the Indenture. The Bonds do not constitute an indebtedness of the Issuer, the City of Little Rock, the City of North Little Rock, or the State of Arkansas within the meaning of any constitutional or statutory debt limitation or restriction. The issuance of the Bonds shall not directly, indirectly, or contingently obligate the City of Little Rock, the City of North Little Rock, or the State of Arkansas to levy or pledge any taxes whatsoever or to make any appropriation for the payment of the Bonds. The Issuer has no power of taxation. See inside front cover for maturity schedule. The Bonds are offered for sale when, as, and if issued and received by SAMCO Capital Markets, the Underwriter, subject to review by Stephens Inc., Municipal Advisor, and to the final approving opinion of Wright, Lindsey & Jennings LLP, Little Rock, Arkansas, Bond Counsel, and to certain other conditions referenced to in the Official Notice of Sale. It is expected that the Bonds will be available for delivery in New York, New York, on or about November 24, 2020. The date of this Official Statement is November 3, 2020 MATURITY SCHEDULE $7,140,000 CENTRAL ARKANSAS WATER REFUNDING WATER REVENUE BONDS, SERIES 2020D (TAXABLE) Maturity (October 1) Principal Amount Interest Rate Yield CUSIP* 2021 $ 725,000 0.300% 0.300% 15239M KC5 2022 890,000 0.400% 0.400% 15239M KD3 2023 830,000 0.500% 0.500% 15239M KE1 2028 295,000 1.500% 1.500% 15239M KK7 2029 300,000 1.600% 1.600% 15239M KL5 $615,000 1.800% Term Bond due October 1, 2031 at yield 1.800%, CUSIP No. 15239M KN1 $635,000 2.000% Term Bond due October 1, 2033 at yield 2.000%, CUSIP No. 15239M KQ4 $660,000 2.200% Term Bond due October 1, 2035 at yield 2.200%, CUSIP No. 15239M KS0 $690,000 2.400% Term Bond due October 1, 2037 at yield 2.400%, CUSIP No. 15239M KU5 $730,000 2.600% Term Bond due October 1, 2039 at yield 2.600%, CUSIP No. 15239M KW1 $770,000 2.700% Term Bond due October 1, 2041 at yield 2.700%, CUSIP No. 15239M KY7 *Copyright 2019, CUSIP Global Services. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed on behalf of the American Bankers Association by S&P Global Market Intelligence. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Global Services. CUSIP numbers are provided for convenience of reference only. The City and the Underwriters are not responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Bonds. USE OF INFORMATION IN OFFICIAL STATEMENT No dealer, broker, salesman, or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Issuer, the Municipal Advisor, or the Underwriter. Certain information set forth herein has been obtained from the Issuer and other sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness, and it is not to be construed as a representation by the Municipal Advisor or the Underwriter. This Official Statement is not to be used in connection with an offer to sell or the solicitation of an offer to buy in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of the Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer or other matters described herein since the date hereof. See “APPENDIX C—Form of Continuing Disclosure Agreement” herein for a description of the undertakings of the Issuer to provide certain information on a continuing basis. THE BONDS ARE EXEMPT FROM REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH.