PRELIMINARY OFFICIAL STATEMENT OCTOBER 17, 2016 NEW ISSUE—BOOK ENTRY ONLY Ratings‡ A+ Fitch A+ S&P Global In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds (as defined below) is excluded from gross income for federal income tax purposes under section 103 of the Internal Revenue Code of 1986 and is exempt from State of Oregon personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, although Bond Counsel observes that such interest on the Bonds is included in adjusted current earnings in calculating federal corporate alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax consequences relating to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See “TAX MATTERS.” $194,870,000* HOSPITAL FACILITY AUTHORITY OF THE CITY OF SALEM, OREGON Revenue Refunding Bonds (Salem Health Projects) Series 2016A Dated: Date of Issuance Due: May 15, as shown on the inside cover page The Hospital Facility Authority of the City of Salem, Oregon Revenue Refunding Bonds (Salem Health Projects) Series 2016A (the “Bonds”) are being issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof. Interest will be payable by U.S. Bank National Association, as bond trustee (the “Bond Trustee”), on each May 15 and November 15, commencing May 15, 2017, to the registered owner thereof as of the applicable Record Dates, as herein defined, which payments shall, as long as the book-entry system is in place, be made to Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), the securities depository for the Bonds. See APPENDIX G—“DTC AND THE BOOK-ENTRY SYSTEM” herein. The sources of payment of, and security for, the Bonds are more fully described in this Official Statement. The Bonds are subject to optional, mandatory and extraordinary optional redemption prior to maturity as described herein. The Bonds are limited obligations of the Hospital Facility Authority of the City of Salem, Oregon (the “Authority”), secured under the provisions of the Bond Indenture and the Loan Agreement, as described herein, and are payable from Loan Repayments made by Salem Health (the “Corporation”) under the Loan Agreement and from certain funds held under the Bond Indenture. The obligation of the Corporation to make such payments is evidenced and secured by the issuance of Obligation No. 26 with respect to the Bonds under the Amended and Restated Master Trust Indenture, dated as of November 1, 2016, as amended and supplemented from time to time (the “Master Indenture”), whereunder the Corporation and any future members of the Obligated Group (collectively, the “Obligated Group”) jointly and severally are obligated to make payments on Obligation No. 26 in an amount sufficient to pay principal of, premium, if any, and interest on the Bonds when due. The Corporation is currently the only member of the Obligated Group. By purchase of the Bonds, the Beneficial Owners of the Bonds are deemed to have consented to the Master Indenture. See “SECURITY FOR THE BONDS—The Master Indenture” herein. THE BONDS ARE NOT AND SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF OREGON, THE CITY OF SALEM, OREGON OR OF ANY POLITICAL SUBDIVISION THEREOF OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF OREGON, THE CITY OF SALEM, OREGON OR ANY SUCH POLITICAL SUBDIVISION, OTHER THAN THE AUTHORITY, BUT SHALL BE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR. NONE OF THE STATE OF OREGON, CITY OF SALEM, OREGON NOR THE AUTHORITY SHALL BE OBLIGATED TO PAY THE PRINCIPAL OR THE PURCHASE PRICE OF THE BONDS, OR THE PREMIUM OR INTEREST THEREON, EXCEPT FROM THE FUNDS PROVIDED UNDER THE LOAN AGREEMENT AND THE BOND INDENTURE, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF OREGON, CITY OF SALEM, OREGON OR OF ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE PREMIUM, IF ANY, OR INTEREST ON THE BONDS. THE ISSUANCE OF THE BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OF OREGON, CITY OF SALEM, OREGON 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. This cover page contains certain information for quick reference only. It is not intended to be a summary of the security or terms of this bond issue. Investors are instructed to read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Bonds are offered when, as and if issued and received by the Underwriters, subject to receipt of the approving opinion of Orrick, Herrington & Sutcliffe LLP, Portland, Oregon, Bond Counsel to the Authority. Certain legal matters will be passed upon for the Underwriters by Hawkins Delafield & Wood LLP and for the Corporation by Parks Bauer Sime Winkler & Fernety LLP. It is expected that the Bonds in book-entry form will be available for delivery through the facilities of DTC in New York, New York on or about November __, 2016. Citigroup BofA Merrill Lynch ‡ For an explanation of the Ratings, see “RATINGS” herein. This Preliminary Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to offer an of solicitation or the sell to Preliminary this shall circumstances no Under offer an constitute Statement Official This Preliminary amendment. and completion to are subject herein contained the information and Statement Official prior of such jurisdiction. or qualification under the securities to registration be unlawful laws solicitation or sale would jurisdiction sale of these Bonds in any in which such offer, nor shall there be any buy, * Preliminary, subject to change. BOND MATURITY SCHEDULE∗ $194,870,000* HOSPITAL FACILITY AUTHORITY OF THE CITY OF SALEM, OREGON Revenue Refunding Bonds (Salem Health Projects) Series 2016A Maturity (May 15) Principal Amount* Interest Rate Yield CUSIP 794458† 2017 $ 4,305,000 2018 4,960,000 2019 5,110,000 2020 1,840,000 2021 1,945,000 2022 2,045,000 2023 2,165,000 2024 2,260,000 2025 2,380,000 2026 2,500,000 2027 2,635,000 2028 2,780,000 2029 2,920,000 2030 3,070,000 2031 3,230,000 2032 3,405,000 2033 3,575,000 2034 3,725,000 2035 3,885,000 2036 10,075,000 2037 10,475,000 $45,825,000* __._% Term Bonds Due May 15, 2041 Priced to Yield __.___% CUSIP† 794458 ___ $69,760,000* __.__% Term Bonds Due May 15, 2046 Priced to Yield __.___% CUSIP† 794458___ ∗ Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (“CGS”) is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright© 2016 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Corporation, the Underwriters or their agents or counsel assume responsibility for the accuracy of such numbers. REGARDING THIS OFFICIAL STATEMENT This Official Statement does not constitute an offering or a reoffering of any security other than the offering of the Bonds identified on the front cover. No dealer, broker salesman or other person has been authorized by the Authority, the Corporation or Citigroup Global Markets, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (together 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 other information or representations must not be relied upon as having been authorized by any of the foregoing. Estimates and opinions are included and should not be interpreted as statements of fact. Summaries of documents do not purport to be complete statements of their provisions. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder implies that there has been no change in the matters described herein since the date hereof. This Official Statement does not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be a 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. All information set forth herein has been obtained from the Corporation, DTC and other sources which are believed to be reliable by the Underwriters and is not to be construed as a representation by the Authority or the Underwriters. Neither the Authority, its counsel nor any of its officials, agents, employees or representatives have reviewed or approved any information in this Official Statement or investigated the statements or representations contained herein. Neither the Authority, its counsel nor any of its officials, agents, employees or representatives makes any representation as to the completeness, sufficiency and truthfulness of the statements set forth in this Official Statement.
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