NOTICE OF SALE ALABAMA PUBLIC SCHOOL AND COLLEGE AUTHORITY

Transcription

1 NOTICE OF SALE ALABAMA PUBLIC SCHOOL AND COLLEGE AUTHORITY $554,520,000 * Capital Improvement Refunding Bonds, Series 2014-B Dated the Date of Initial Delivery ALABAMA PUBLIC SCHOOL AND COLLEGE AUTHORITY (the Authority ), a public corporation and instrumentality of the State of Alabama, invites bids for the purchase of its $554,520,000* Capital Improvement Refunding Bonds, Series 2014-B (the Series 2014-B Bonds ). The bids will be publicly available for review as follows: Room N-105 State Capitol Building 600 Dexter Avenue Montgomery, Alabama at 3:00 p.m., Central Time on July 1, 2014 (the Bid Date ). Award of the Series 2014-B Bonds will be made by 3:30 p.m., Central Time, on the Bid Date. Bids will be received electronically (as described in further detail below) by the Authority via PARITY until 10:00 a.m., Central Time, on July 1, Dates and Places of Payment The Series 2014-B Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof and will be dated the date of their delivery (expected to be on or about July 10, 2014). Interest on the Series 2014-B Bonds will be payable on January 1, 2015, and semiannually thereafter on January 1 and July 1 of each year. The principal of the Series 2014-B Bonds will be payable at the office of the State Treasurer in Montgomery, Alabama, on the dates shown herein. Book-Entry Form Only The Series 2014-B Bonds, when issued, will be issued in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ). DTC will act as securities depository for the Series 2014-B Bonds. Purchases of beneficial interests in the Series 2014-B Bonds will be made in book-entry form, in denominations of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their beneficial interests in the Series 2014-B Bonds. So long as DTC or its nominee, Cede & Co., is the registered owner of the Series 2014-B Bonds, payment of principal and interest will be made directly to DTC or such nominee. Disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the beneficial owners is the responsibility of Direct Participants and Indirect Participants of DTC. * Preliminary; subject to change.

2 Principal Payments The Series 2014-B Bonds will mature on January 1 in the following years and principal amounts. Year Principal Amount * 2019 $51,740, ,845, ,515, ,850, ,845, ,440, ,170, ,040, ,075,000 Reservation of Right to Reduce or Increase Annual Principal Amounts The preliminary amounts of each annual principal payment relating to the Series 2014-B Bonds as set forth in this Notice of Sale (the Preliminary Principal Amounts ) may be revised by the Authority prior to the time bids are to be received (the Revised Principal Amounts ). Any such revisions will be communicated through Thomson Financial ( TM3 ), not later than 3:00 p.m., Central Time, on June 30, If no such revisions are made, the Preliminary Principal Amounts will constitute the Revised Principal Amounts. Bidders shall submit bids based on the Revised Principal Amounts, and the Revised Principal Amounts will be used to compare bids and select a winning bidder. Bidders may not adjust principal amounts or maturity dates. After selecting the winning bid the Authority will determine each final annual principal amount (the Final Annual Principal Amounts ). In determining the Final Annual Principal Amounts, the Authority will not increase or reduce any annual principal amount by more than 20% of such amount, will not increase or reduce the total aggregate principal amount of the Series 2014-B Bonds by more than 20%.THE SUCCESSFUL BIDDER MAY NOT WITHDRAW ITS BID OR CHANGE THE INTEREST RATES BID OR THE INITIAL REOFFERING PRICES (AS DEFINED HEREIN) AS A RESULT OF ANY CHANGES MADE TO THE REVISED ANNUAL PRINCIPAL AMOUNTS WITHIN THESE LIMITS. The dollar amount bid by the successful bidder will be adjusted to reflect any adjustments in the Revised Annual Principal Amounts. Such adjusted bid price will reflect changes in the dollar amount of the underwriter s discount per $1,000 of par amount of the Series 2014-B Bonds from the underwriter s discount which would have been received based on the purchase price in the winning bid and the initial public offering prices. The Final Annual Principal Amounts and the adjusted bid price for the Series 2014-B Bonds will be communicated to the successful bidder by 3:30 p.m. (Central Time) on the day of the sale. * Preliminary; subject to change. 2

3 Redemption Provisions relating to the Series 2014-B Bonds Those of the Series 2014-B Bonds having a stated maturity on January 1, 2025, and thereafter, shall be subject to redemption and payment, at the option of the Authority, on any date on or after July 1, 2024, in whole or in part (and if in part in multiples of $5,000, in such maturities as the Authority in its sole discretion shall designate, and if less than all the Series 2014-B Bonds having the same maturity are to be redeemed, those to be redeemed shall be selected by the Paying Agent by lot), at and for a redemption price for each Series 2014-B Bond redeemed equal to the face or par amount thereof plus accrued interest to the redemption date. Purpose The Series 2014-B Bonds are being issued for the purpose of (i) refunding a portion of the Authority s Capital Improvement Bonds, Series 2007, dated December 18, 2007 (the Refunded Bonds ), and (iii) paying the costs of issuing the Series 2014-B Bonds. Security The Series 2014-B Bonds will not constitute general obligations of the Authority nor will the Series 2014-B Bonds constitute a charge against the general credit or taxing power of the State of Alabama. The Series 2014-B Bonds will be special, limited obligations of the Authority payable solely out of and secured by a pledge of the proceeds of certain taxes levied by the State of Alabama, more particularly described in the Official Statement of the Authority respecting the Series 2014-B Bonds, subject and subordinate to the pledge thereof in favor of certain prior lien bonds heretofore issued by the Authority, which are more particularly described in the Official Statement. Bidding Conditions Relating to the Series 2014-B Bonds Bidders must bid to purchase all and not part of the Series 2014-B Bonds and must submit their bids electronically via PARITY, as hereinafter described. Bidders must specify a rate of interest for each maturity of the Series 2014-B Bonds and no zero rate of interest may be specified. No rate of interest bid for any maturity shall exceed 5.00%, and all bonds of any maturity must bear the same rate throughout their life. Bidders may bid to purchase the Series 2014-B Bonds from the Authority at discount or at a premium; provided that no bid will be considered if the bid is to purchase the Series 2014-B Bonds at a price less than 90% of the par amount thereof or more than 130% of the par amount thereof. Form of Bids A bid for the purchase of the Series 2014-B Bonds must be submitted electronically via PARITY pursuant to this Notice of Sale, until 10:00 a.m., on July 1, 2014, but no bid will be received after such specified time. To the extent any instructions or directions set forth in PARITY conflict with this Notice of Sale, the terms of this Notice of Sale shall control. For further information about PARITY, potential bidders may contact Rice Advisory LLC, Montgomery, Alabama, financial advisor to the Authority, at (334) , or PARITY at i-deal, (212) Every bid must be unconditional, irrevocable and in accordance with the terms and conditions set forth in this notice. 3

4 Disclaimer Each bidder shall be solely responsible for making the necessary arrangements to access the PARITY system for purposes of submitting its bid in a timely manner and in compliance with the requirements of this Notice of Sale. Neither the Authority nor PARITY shall have any duty or obligation to provide or assure such access to any bidder, and neither the Authority nor PARITY shall be responsible for the proper operation of, or have any liability for, any delays or interruptions of, or any damages caused by, the PARITY system. The Authority is authorizing the use of PARITY as a communication mechanism to conduct electronic bidding for the Series 2014-B Bonds but such system is not an agent of the Authority. The Authority is not bound by any advice and determination of PARITY to the effect that any particular bid complies with the terms of this Official Notice of Sale and in particular the specifications set forth in Bidding Conditions Relating to the Series 2014-B Bonds hereinabove and Basis of Award hereinbelow. All costs and expenses incurred by bidders in connection with their registration via PARITY are the sole responsibility of such bidders. Basis of Award Each series of the Series 2014-B Bonds will be awarded to the bidder submitting a bid in conformance with this Notice of Sale that produces the lowest true interest cost (TIC) to the Authority. The true interest cost (expressed as an annual interest rate) will be the rate necessary, when using a 360- day year and semiannual compounding, to discount the debt service payments from the payment dates to the dated date of the Series 2014-B Bonds and to the price bid. If satisfactory bids are received for the Series 2014-B Bonds, the bidder(s) submitting the qualifying bids resulting in the lowest true interest cost for the Series 2014-B Bonds will be advised by 11:30 a.m. Central Time on the Bid Date that it is the apparent successful bidder, subject to the official award of the Series 2014-B Bonds later that day. The results of the bidding will be made available to all bidders and the winning bidder(s) will be given notice of the results of the bidding by 3:00 p.m., Central Time on the Bid Date. Diversity It is the intent of the Authority that appropriate consideration be given to firms that reflect the racial and ethnic diversity of the State of Alabama. The Authority requests and strongly urges bidders to include such firms in their management group or syndicate. Delivery and Payment Delivery of the Series 2014-B Bonds is expected to occur on or about July 10, The Series 2014-B Bonds will be delivered through DTC in New York, New York. The successful bidder(s) shall pay for the Series 2014-B Bonds on the date of delivery in immediately available federal funds. Any expense of providing federal funds shall be borne by the purchaser(s). Payment on the delivery date shall be made in an amount equal to the price bid for the Series 2014-B Bonds purchased, less the amount of the cash payment submitted, as described under Good Faith Deposit hereinbelow. Right to Reject Bids; Waive Irregularities The Authority reserves the right to reject any and all bids and to waive any irregularity or informality in any bid. 4

5 Bond Insurance The successful bidder may purchase municipal bond insurance, if available, for some or all of the Series 2014-B Bonds. However, the delivery of such Series 2014-B Bonds shall not be conditioned upon the issuance of any such insurance. Payment of any insurance premium and satisfaction of any conditions to the issuance of a municipal bond insurance policy, including payment for any legal opinion to be delivered to any insurer, shall be the sole responsibility of the bidder. In particular, the Authority shall have no obligation to enter into any additional agreements with respect to the provision of any such insurance. FAILURE OF AN INSURANCE PROVIDER TO ISSUE A POLICY OF MUNICIPAL BOND INSURANCE SHALL NOT JUSTIFY FAILURE OR REFUSAL BY THE SUCCESSFUL BIDDER TO ACCEPT DELIVERY OF, OR PAY FOR, THE SERIES 2014-B BONDS, OR ANY PORTION THEREOF. Reoffering Prices relating to the Series 2014-B Bonds The successful bidder will be required, within one-half hour after being notified that it has submitted the lowest bid for the Series 2014-B Bonds, to advise the Authority of the initial public offering price for each maturity of such bonds. The successful bidder will also be required, prior to the delivery of the Series 2014-B Bonds, to furnish to the Authority a certificate, substantially in the form provided as Annex 1, acceptable to Bond Counsel to the Authority Good Faith Deposit The apparent successful bidder for the Series 2014-B Bonds will be required, by no later than 2:00 p.m., Central Time, on the Bid Date, to deposit with the Authority, by wire transfer, a cash deposit of $1,000, The apparent successful bidder may contact Rice Advisory, LLC, Montgomery, Alabama, financial advisor to the Authority, at the number below, for wire instructions. Such cash deposits shall be submitted to guarantee performance of the successful bids for the Series 2014-B Bonds and will be applied to the purchase price or, if the successful bidder shall not carry out the terms of its proposal to purchase the Series 2014-B Bonds, the amount of the cash deposit shall be forfeited as stipulated or liquidated damages. No interest will be paid on the cash deposit submitted by the successful bidder. If the Authority does not accept the bid of the apparent successful bidder for the Series 2014-B Bonds, the amount of the cash deposit will be returned promptly to such bidder (except as described under Bidding Conditions Relating to the Series 2014-B Bonds hereinabove). Continuing Disclosure In order to assist bidders in complying with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, the Authority will undertake, pursuant to an agreement of the Authority entered into in connection with the issuance of the Series 2014-B Bonds, to provide annual reports and notices of certain events on behalf of the Authority. A description of this undertaking is set forth in the Preliminary Official Statement of the Authority respecting the Series 2014-B Bonds and will also be set forth in the final Official Statement with respect thereto. Legal Opinions The Series 2014-B Bonds will be sold subject to the approving opinion of Butler Snow LLP, Bond Counsel to the Authority. It shall be a condition of the obligation of a purchaser to accept delivery of and to pay for the Series 2014-B Bonds that, contemporaneously with such delivery and payment, there shall be furnished to 5

6 the successful bidder, without expense to it, the opinion of Bond Counsel to the Authority and standard closing and delivery papers, including (i) customary no-litigation certificate; (ii) a certificate of an authorized officer of the Authority to the effect that, to the best knowledge of such officer, the Official Statement used in connection with the Series 2014-B Bonds did not on the date of delivery of such bonds: (a) contain any untrue statement of a material fact; or (b) omit to state a material fact necessary in order to make the statements therein contained, in light of the circumstances under which they were made, not misleading; (iii) a certificate of the Authority stating that, on the basis of the facts, estimates and circumstances in existence on the date of issue, it is not expected that the proceeds of the Series 2014-B Bonds will be used in a manner that would cause such bonds to be arbitrage bonds; and (iv) the opinion of Butler Snow LLP, Birmingham, Alabama, Bond Counsel to the Authority, to the effect that nothing has come to such counsel s attention that would lead such counsel to believe that the Official Statement (excluding any information relating to financial or statistical data contained in the Official Statement, including the appendices thereto, as to which no view will be expressed) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. CUSIP Numbers It is anticipated that CUSIP identification numbers will be printed on the Series 2014-B Bonds, but neither the failure to print such numbers on any Series 2014-B Bond nor any error with respect thereto shall constitute a cause for a failure or refusal by the purchasers thereof to accept delivery of or pay for the Series 2014-B Bonds. All expenses pertaining to the printing of CUSIP numbers on the Series B Bonds will be paid for by the Authority. The CUSIP Service Bureau charge for the assignment of said numbers shall be paid for by the successful bidder(s). It shall be the responsibility of the successful bidder(s) to procure CUSIP identification numbers. Concerning the Preliminary Official Statement The Preliminary Official Statement of the Authority with respect to the Series 2014-B Bonds, which contains further information concerning the Series 2014-B Bonds and financial and other information pertaining to the Authority, may be obtained from Director of Finance Room N-105, Alabama State Capitol Montgomery, Alabama Telephone (334) or from the financial advisor to the Authority, Rice Advisory LLC 250 Commerce Street, 3 rd Floor Montgomery, Alabama Telephone (334) The Preliminary Official Statement and the information contained therein have been deemed final by the Authority as of its date within the meaning of Rule 15c2-12 under the Securities Exchange Act of 1934, with permitted omissions, but are subject to change without notice and to completion or amendment in the Official Statement in final form. 6

7 Official Statement The Authority will provide the successful bidder(s) such reasonable number of printed copies of the final Official Statement as such bidder(s) may request, no later than seven (7) business days after the day the Series 2014-B Bonds are awarded. Up to one hundred (100) copies of the final Official Statement will be furnished without cost to the successful bidder of each series of the Series 2014-B Bonds and further copies, if desired, will be made available at the successful bidder s expense. Right to Modify or Amend The Authority reserves the right to modify or amend this Notice of Sale; however, such modifications or amendments shall be made not later than 3:00 p.m., Central Time, on the last business day prior to the bid opening and communicated through Thomson Financial (TM3), Postponement The Authority reserves the right to postpone, from time to time, the date established for the receipt of bids for the Series 2014-B Bonds. Any such postponement will be announced by Thomson Financial (TM3), not later than 3:00 p.m., Central Time, on the last business day prior to any announced date for receipt of bids. ALABAMA PUBLIC SCHOOL AND COLLEGE AUTHORITY By: /s/ Bill Newton Its Secretary Dated: June 23,

8 Annex 1 Initial Offering Price Certificate $ Alabama Public School and College Authority Capital Improvement Refunding Bonds Series 2014-B This certificate is being delivered in connection with the issuance of the above-referenced bonds (the Bonds ) by the Alabama Public School and College Authority (the Authority ). The Bonds are described in that certain Official Statement dated July, 2014 (the Official Statement ). [Successful Bidder] (the Purchaser ) does hereby certify that: 1. As of July, 2014, the date on which the Purchaser was awarded the purchase of the Bonds after a competitive sale (the Sale Date ), the Purchaser reasonably expected to offer and sell the Bonds to the general public (excluding bond houses, brokers, or similar persons acting in the capacity of underwriters or wholesalers) in a bona fide public offering at the prices or yields stated in the Official Statement (the Initial Offering Prices ). 2. All Bonds have been offered to the general public at the Initial Offering Prices. 3. The Purchaser believes that the Initial Offering Price for each maturity of the Bonds did not exceed fair market value as of the Sale Date. 4. At least 10% of each maturity of the Bonds has been sold to the general public at the Initial Offering Price for that maturity [except for the following Bonds:*]. Dated:. [Full Name of Purchaser] By: Authorized Representative *Note: Bonds and explanation for exception to be specified. Explanation must be reasonably acceptable to the Authority and its bond counsel v1