A portion of the proceeds of the 2015A Bonds, together with other available monies, will be used, pursuant to an escrow agreement between U.S. Bank National Association (the “2008 Escrow Agent”) and the Water Authority, dated as of May 1, 2015 (the “2008 Escrow Agreement”), to acquire obligations of the United States of America the principal of and interest on which will provide monies sufficient to refund a portion of the Water Authority’s obligations under the 2008A Installment Sale Agreement resulting in the prepayment of 2008A Certificates (at a price equal 100% of the principal amount thereof) with certificate payment dates set forth below in the amounts set forth below (the “Refunded 2008A Certificates”) on May 1, 2018, and to pay interest evidenced by the Refunded 2008A Certificates to such date of prepayment. Such obligations will be deposited with the 2008 Escrow Agent in trust for the payment of interest when due and the prepayment price of the Refunded 2008A Certificates. Upon deposit of such obligations in trust, the Refunded 2008A Certificates will no longer be outstanding under the trust agreement pursuant to which of the 2008A Certificates were executed and delivered.
A portion of the proceeds of the 2015A Bonds, together with other available monies, will be used, pursuant to an escrow agreement among U.S. Bank National Association (the “2010 Escrow Agent”), the Agency and the Water Authority, dated as of May 1, 2015 (the “2010 Escrow Agreement”), to acquire obligations of the United States of America, the principal of and interest on which will provide monies sufficient to refund a portion of the Water Authority’s obligations under the 2010A Contract of Indebtedness, resulting in the redemption of 2010A Bonds (at a redemption price equal to 100% of the principal amount thereof) with maturity dates set forth below in the amounts set forth below (the “Refunded 2010A Bonds”) on November 1, 2019, and to pay interest on the refunded 2010A Bonds to such date of redemption. Such obligations will be deposited with the 2010 Escrow Agent in trust for the payment of interest when due at the redemption price of the Refunded 2010A Bonds. Upon deposit of such obligations in trust, the Refunded 2010A Bonds will no longer be outstanding under the trust agreement pursuant to which the 2010A Bonds were issued.
Maturity (May 1) Principal Component Being Refunded Refunded 2008A Certificates Existing CUSIP† Refunded 2008A Certificates New CUSIP† Principal Component To Remain Outstanding Unrefunded 2008A Certificates New CUSIP† $ $
Refunded 2010A Bonds*
Maturity Date (May 1) Principal Amount Being Refunded Refunded 2010A Bonds, Existing CUSIP† Refunded 2010 Bonds, New CUSIP† Principal Amount To Remain Outstanding Unrefunded 2010A Bonds New CUSIP† $ $ ______________________________ †
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© 2015 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. Neither the Water Authority nor the Underwriters assume responsibility for the accuracy of such numbers.
The balance of the proceeds of the 2015A Bonds, net of Underwriters’ discount, will be used to pay costs of issuance. See SOURCES AND USES OF FUNDS.
The mathematical accuracy of the computations of the adequacy of the maturing principal of and interest earned on the securities held pursuant to the Escrow Agreement to fully provide for all payments enumerated above will be verified upon delivery of the 2015A Bonds by ____________________, certified public accountants. See VERIFICATION OF MATHEMATICAL COMPUTATIONS.
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General
The 2015A Bonds will be issued in the aggregate principal amount of $___________.* The 2015A Bonds will be issued in denominations of $5,000 or any integral multiple thereof, and will be dated to the date of delivery thereof and will mature on May 1 in the years and in the amounts set forth on the cover page hereof. Interest on the 2015A Bonds is payable from their dated date at the rates set forth on the cover page hereof, on May 1 and November 1 of each year, commencing November 1, 2015.
The 2015A Bonds, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC,” and, together with any successor securities depository, the “Securities Depository”). DTC will act as Securities Depository for the 2015A Bonds so purchased. Individual purchases of the 2015A Bonds will be made only in book-entry form. Underwriters will not receive physical certificates representing their beneficial ownership interest in the 2015A Bonds. So long as the 2015A Bonds are registered in the name of Cede & Co., payment of the principal of, premium, if any, and interest on the 2015A Bonds will be payable to DTC or its nominee. DTC in turn is obligated to remit such payments to DTC Participants for subsequent disbursement to the Beneficial Owners. See APPENDIX E – BOOK-ENTRY SYSTEM.
THE 2015A BONDS ARE LIMITED OBLIGATIONS OF THE WATER AUTHORITY, PAYABLE SOLELY FROM A PLEDGE OF NET WATER REVENUES, AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE WATER AUTHORITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS IS PLEDGED FOR THE PAYMENT THEREOF.
Redemption*
Optional Redemption. The 2015A Bonds maturing on or after May 1, ____ shall be subject to redemption prior to their stated maturity date at the option of the Water Authority, from any source of available funds, as a whole or in part on any date on or after ___ 1, ____, at a redemption price equal to the principal amount of such 2015A Bonds called for redemption, together with accrued interest thereon to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption. The 2015A Bonds maturing on May 1, ____ are subject to redemption prior to their respective stated maturities, on any May 1 on or after May 1, ____, in part by lot, from mandatory sinking account payments at a redemption price equal to the principal amount thereof and interest accrued thereon to the date fixed for redemption, without premium, as set forth below.
Sinking Fund Redemption Date (May 1) Principal Amount $ † ___________________________ † Final Maturity
Partial Redemption. If less than all of the Outstanding 2015A Bonds are to be redeemed at any one time, the Water Authority shall select the maturities of the 2015A Bonds and the principal amount of each such maturity to be redeemed in its sole discretion. If less than all 2015A Bonds maturing by their terms on any one date are to be redeemed at any one time, the Trustee shall select the 2015A Bonds of such maturity to be redeemed in any manner that it deems appropriate and fair and shall promptly notify the Water Authority in writing of the numbers of such
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composed of $5,000 multiples and any such multiple may be separately redeemed. Notice, Rescission and Effect of Redemption
Notice of Redemption. Notice of redemption is required to be mailed by first-class mail by the Trustee, not less than 20 nor more than 60 days prior to the redemption date to (i) the respective Owners of the 2015A Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, (ii) the Securities Depositories and (iii) the Municipal Securities Rulemaking Board. Notice of redemption to the Securities Depositories and the Municipal Securities Rulemaking Board is required to be given by registered mail or overnight delivery or facsimile transmission. Each notice of redemption is required to state the date of such notice, the redemption price, the place of redemption (including the name and appropriate address of the Trustee), the CUSIP number of the maturity or maturities, and if less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the 2015A Bonds of such maturity to be redeemed, the redemption price thereof and, in the case of 2015A Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice is also required to state that on said date there will become due and payable on each of said 2015A Bonds to be redeemed in part only, the specified portion of the principal amount thereof to be redeemed, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon will cease to accrue, and require that the 2015A Bonds be then surrendered at the address of the Trustee specified in the redemption notice.
So long as the 2015A Bonds are held in book-entry only form, notice of redemption will be mailed by the Trustee only to DTC and not to the Beneficial Owners of 2015A Bonds under the DTC book-entry only system. Neither the Water Authority nor the Trustee is responsible for notifying the Beneficial Owners, who are to be notified in accordance with the procedures in effect for the DTC book-entry system. See APPENDIX E – BOOK- ENTRY SYSTEM.
Neither the failure to receive any such notice of redemption nor any defect therein will affect the validity of the proceedings for the redemption of such 2015A Bonds or the cessation of the accrual of interest on the redemption date.
Conditional Notice of Optional Redemption. Any notice of optional redemption of the 2015A Bonds may be conditional and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the redemption date, said notice shall be of no force and effect and the Water Authority shall not be required to redeem such 2015A Bonds and the redemption shall be cancelled and the Trustee shall within a reasonable time thereafter give notice, to the persons and in the manner in which the notice of redemption was given, that such condition or conditions were not met and that the redemption was cancelled.
Right to Rescind or Cancel Redemption. The Water Authority shall have the right to rescind any optional redemption by written notice of rescission. In addition, any notice of optional redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the 2015A Bonds then called for redemption. Any such rescission or cancellation shall not constitute an Event of Default under the Indenture. The Trustee shall mail notice of rescission or cancellation of such redemption in the same manner as the original notice of redemption was sent.
Effect of Redemption. If notice of redemption has been duly given and money for the payment of the redemption price of the 2015A Bonds called for redemption is held by the Trustee, then on the redemption date designated in such notice the 2015A Bonds so called for redemption shall become due and payable, and from and after the date so designated interest on such 2015A Bonds shall cease to accrue, and the Owners of such 2015A Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof.
The sources and uses of funds in connection with the 2015A Bonds are anticipated to be as follows:
SOURCES: Principal Amount of the 2015A Bonds ... $
[Net] Original Issue Premium ... Funds of the Water Authority relating to the
Refunded 2008A Certificates ... Funds of the Water Authority relating to the
Refunded 2010A Bonds ...
TOTAL ... $
USES: Deposit to Escrow Fund relating to the
Refunded 2008A Certificates ... $ Deposit to Escrow Fund relating to the
Refunded 2010A Bonds ...
Costs of Issuance1 ... TOTAL ... $ ______________________________
1
Includes Underwriters’ discount, legal fees, financial advisory fees, printing expenses and other costs relating to the issuance and delivery of the 2015A Bonds.