NEW ISSUE RATINGS: 2005 Series C − Moody’s Aa2 BOOK-ENTRY ONLY 2005 Series D − Moody’s Aaa (Ambac-Insured) In the opinion of Preston Gates & Ellis LLP, Bond Counsel, interest on the 2005 Series C Bonds is included in gross income subject to federal income taxation. Interest on the 2005 Series C Bonds is exempt from Oregon personal income tax and is also exempt from personal income taxation by Multnomah County, Oregon. See “TAX MATTERS” herein. In the opinion of Preston Gates & Ellis LLP, Bond Counsel, assuming compliance with certain covenants of the City, interest on the 2005 Series D Bonds is excluded from the gross income of the owners of the 2005 Series D Bonds for federal income tax purposes under existing law. Interest on the 2005 Series D Bonds is not an item of tax preference for purposes of either individual or corporate alternative minimum tax. Interest on the 2005 Series D Bonds may be indirectly subject to corporate alternative minimum tax and certain other taxes imposed on certain corporations. Interest on the 2005 Series D Bonds is exempt from Oregon personal income tax and is also exempt from personal income taxation by Multnomah County, Oregon See “TAX MATTERS” and “OTHER FEDERAL TAX MATTERS” herein. City of Portland, Oregon $3,170,000 $6,975,000 Limited Tax Housing Limited Tax Housing Revenue Bonds Revenue Bonds 2005 Series C 2005 Series D (Federally Taxable) (Tax-Exempt) (Housing Opportunity Program) (Housing Opportunity Program) BASE CUSIP: 736704 DATED: Date of Delivery DUE: June 1, as shown on inside cover The City of Portland, Oregon, Limited Tax Housing Revenue Bonds, 2005 Series C (Federally Taxable) (Housing Opportunity Program) (the “2005 Series C Bonds”) and Limited Tax Housing Revenue Bonds, 2005 Series D (Tax Exempt) (Housing Opportunity Program) (the “2005 Series D Bonds” and, collectively with the 2005 Bonds, the “2005 Bonds”) will be issued in registered book-entry form only without coupons in denominations of $5,000 or integral multiples thereof. The 2005 Bonds, when executed and delivered, will be registered in the name of Cede & Co. as the registered owner and nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the 2005 Bonds. While Cede & Co. is the registered owner of the 2005 Bonds (the “Owner”) as nominee of DTC, references herein to the Bondowners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Bonds. See “BOOK-ENTRY SYSTEM” herein. MATURITIES, AMOUNTS and INTEREST RATES AS SHOWN ON THE REVERSE HEREOF The 2005 Bonds will bear or accrue interest at the rates set forth on the inside cover. The 2005 Bonds will be dated as of the Date of Delivery. Interest on 2005 Bonds will be payable semiannually on June 1 and December 1 of each year, beginning December 1, 2005. While the 2005 Bonds are in book-entry form, interest on the 2005 Bonds will be paid through DTC. See “BOOK-ENTRY SYSTEM” herein. Payment of the principal of and interest on the 2005 Series D Bonds, when due, will be insured by a financial guaranty insurance policy to be issued by Ambac Assurance Corporation simultaneously with the delivery of the 2005 Series D Bonds. Proceeds of the 2005 Bonds will be used to provide grants for various housing projects for low-income seniors, people with disabilities, and low-income working people. Grant recipients are not required to make any payments to the City and the City expects to receive no revenues from the housing projects. See “The Housing Projects” herein. Proceeds also will be used to pay costs of issuance. The City has pledged its full faith and credit to the pay the 2005 Bonds. The 2005 Bonds are not general obligations of the City and the City is not authorized to levy any additional taxes. The expected source of repayment of the 2005 Bonds is the Available General Funds of the City. See "Security for the 2005 Bonds" herein. The 2005 Series C Bonds are not subject to optional redemption prior to maturity. The 2005 Series D Bonds are subject to optional redemption prior to maturity. See “Redemption” herein. The 2005 Bonds are offered when, as and if issued by the City and accepted by the successful bidder, subject to prior sale, withdrawal or modification of the offer without notice, to the final approving opinion of Preston Gates & Ellis LLP, Bond Counsel, Portland, Oregon, and to certain other conditions. The City expects that the 2005 Bonds will be available for delivery through the facilities of DTC in New York, New York on or about June 21, 2005. Official Statement Dated June 9, 2005 MATURITY SCHEDULES $3,170,000 LIMITED TAX HOUSING REVENUE BONDS 2005 SERIES C (Federally Taxable) (Housing Opportunity Program) Due Principal Interest Price or CUSIP No. June 1 Amount Rate Yield 736704 2006 $365,000 3.90% 3.85% AM9 2007 350,000 4.00 4.06 AN7 2008 360,000 4.10 4.15 AP2 2009 375,000 4.20 100 AQ0 2010 395,000 4.25 100 AR8 2011 410,000 4.30 100 AS6 2012 295,000 4.30 4.31 AT4 2013 320,000 4.35 4.36 AU1 2014 300,000 4.45 4.49 AV9 $6,975,000* LIMITED TAX HOUSING REVENUE BONDS 2005 SERIES D (Tax-Exempt) (Housing Opportunity Program) Due Principal Interest Price or CUSIP No. June 1 Amount Rate Yield 736704 2012 $130,000 3.250% 3.37% BJ5 2013 125,000 3.500 3.47 BK2 2014 165,000 5.000 3.57 AW7 2015 485,000 4.250 3.65 AX5 2016 505,000 4.250 3.73† AY3 2017 525,000 4.000 3.80† AZ0 2018 545,000 4.000 3.87† BA4 2019 570,000 4.000 3.94† BB2 2020 590,000 4.000 4.00 BC0 2021 615,000 4.000 4.06 BD8 2022 640,000 4.000 4.12 BE6 2023 665,000 4.000 4.17 BF3 2024 695,000 4.000 4.21 BG1 2025 720,000 4.125 4.25 BH9 * All maturities of the 2005 Series D Bonds are insured by Ambac Assurance Corporation. † Priced to call on June 1, 2015. OFFICIAL STATEMENT OF THE CITY OF PORTLAND, OREGON $3,170,000 $6,975,000 Limited Tax Housing Limited Tax Housing Revenue Bonds Revenue Bonds 2005 Series C 2005 Series D (Federally Taxable) (Tax-Exempt) (Housing Opportunity Program) (Housing Opportunity Program) Tom Potter, Mayor and Commissioner of Finance and Administration Sam Adams, Commissioner of Public Utilities Randy Leonard, Commissioner of Public Safety Dan Saltzman, Commissioner of Public Affairs Erik Sten, Commissioner of Public Works CITY OFFICIALS Gary Blackmer, City Auditor David E. Thurman, City Treasurer Linda Meng, City Attorney Timothy Grewe, Chief Administrative Officer Kenneth L. Rust, Chief Financial Officer DEBT MANAGEMENT Eric H. Johansen, Debt Manager 1221 SW Fourth Avenue, Room 120 Portland, Oregon 97204 Phone: (503) 823-6851 Fax: (503) 823-4209 [email protected] BOND COUNSEL Preston Gates & Ellis LLP Portland, Oregon No dealer, broker, salesperson or other person has been authorized by the City of Portland (the “City”) 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 City. Bond Counsel’s review of this document is limited; see “Legal Matters” herein. This Official Statement has been deemed final as of its date by the City pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934, as amended. All estimates and assumptions set forth herein have been made on the best information available and are believed to be reliable, but no representations whatsoever are made that such estimates and assumptions are correct. So far as any statements herein involve any matters of opinion, whether or not expressly so stated, they are intended merely as such and are not representations of fact. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of, the 2005 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. In making an investment decision, potential investors must rely on their own examination of the City and the terms of the offering, including the merits and risks involved. These securities 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. Any representation to the contrary is a criminal offense. In connection with this offering, the successful bidder may over allot or effect transactions which stabilize or maintain the market price of the 2005 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued, and if discontinued, then recommenced, at any time. TABLE OF CONTENTS INTRODUCTION ................................................................................................................................................................1 THE 2005 BONDS................................................................................................................................................................1 DESCRIPTION ..................................................................................................................................................................1 AUTHORIZATION AND PURPOSE................................................................................................................................1 SECURITY FOR THE 2005 BONDS ................................................................................................................................2 BOND INSURANCE .........................................................................................................................................................2