FIRST SOUTHWEST COMPANY

Transcription

1 This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. PRELIMINARY OFFICIAL STATEMENT DATED DECEMBER 4, 2006 NEW ISSUE BOOK-ENTRY ONLY RATINGS: (Insured) (Underlying) S&P: AA BBB- See RATINGS herein. In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, assuming continuing compliance with certain conditions imposed by applicable federal tax law as described herein, interest on the Series 2006 Bonds is excludable from the gross income of the owners thereof for federal income tax purposes. Interest on the Series 2006 Bonds will not be treated as a preference item in calculating the alternative minimum tax imposed under the Internal Revenue Code of 1986, as amended (the Code ), with respect to individuals and corporations. Such interest, however, is included in the adjusted current earnings of certain corporations for purposes of computing the alternative minimum tax imposed on such corporations. Interest on the Series 2006 Bonds is exempt from Oklahoma income taxation. See TAX EXEMPTION herein. Dated: Date of delivery $29,010,000* COMANCHE COUNTY HOSPITAL AUTHORITY (Lawton, Oklahoma) HOSPITAL REVENUE REFUNDING BONDS SERIES 2006 Due: As shown on inside cover The Series 2006 Bonds are being issued pursuant to a Bond Indenture (the Original Bond Indenture ), dated as of October 1, 1993, by and between the Authority and Bank of Oklahoma, N.A., as trustee (the Trustee ), as previously supplemented and as supplemented by the Series 2006 Supplemental Bond Indenture (the Series 2006 Supplemental Indenture ) dated as of December 1, 2006, by and between the Authority and the Trustee, (the Original Bond Indenture, as previously supplemented and as supplemented by the Series 2006 Supplemental Indenture is collectively referred to herein as the Bond Indenture ). Interest on the Series 2006 Bonds is payable on January 1 and July 1 of each year commencing July 1, The Series 2006 Bonds are subject to optional and extraordinary optional redemption at par in the manner described herein. The Series 2006 Bonds will be issued as registered bonds in book-entry form in authorized denominations as described herein and, when issued, will be initially registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company, New York, New York ( DTC ), which will act as a securities depository therefor (the Securities Depository ). Purchases of the Series 2006 Bonds may be made only in book-entry form in authorized denominations by credit to participating broker-dealers and other institutions on the books of DTC as described herein. Purchasers will not receive certificates representing their interests in the Series 2006 Bonds purchased by them. Principal of and interest on the Series 2006 Bonds will be payable by the Trustee, as Paying Agent and Registrar, to the Securities Depository, which will remit such payments in accordance with its normal procedures, as described herein. Payment of principal of and interest on the Series 2006 Bonds will be insured in accordance with the terms of a financial guaranty insurance policy to be issued simultaneously with the delivery of the Series 2006 Bonds by Radian Asset Assurance Inc. The Series 2006 Bonds are limited and special obligations of the Authority payable solely from the Trust Estate, as more fully defined in the Bond Indenture, which includes all interest of the Authority in and to the Pledged Revenues, as defined in the Bond Indenture. The Series 2006 Bonds are special obligations of the Authority and do not constitute an obligation either general or special of the State of Oklahoma or Comanche County, Oklahoma (the County ), within the meaning of any constitutional or statutory provisions. Neither the faith and credit nor the taxing power of the State of Oklahoma, any county, municipality, political subdivision or governmental unit or agency thereof or of the County is or shall be pledged to the payment of the principal of or interest on the Series 2006 Bonds. THE AUTHORITY HAS NO TAXING POWER. The Series 2006 Bonds are offered when, as and if issued and received by the Underwriters, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of legality by Fagin, Brown, Bush, Tinney & Kiser, Bond Counsel. Certain legal matters will be passed upon for the Authority by its counsel, Wade and Mackey, P.C., Lawton, Oklahoma, and for the Underwriters by their counsel, Kutak Rock LLP. It is expected that the Series 2006 Bonds in definitive form will be available for delivery to DTC in New York, New York, on or about December 19, FIRST SOUTHWEST COMPANY *Preliminary, subject to change. The date of this Official Statement is December, 2006 BOSC, Inc. A subsidiary of BOK Financial Corp.

2 $29,010,000* COMANCHE COUNTY HOSPITAL AUTHORITY (Lawton, Oklahoma) HOSPITAL REVENUE REFUNDING BONDS SERIES 2006 Maturities, Amounts, Interest Rates and Yields* $18,345,000* Series 2006 Serial Bonds July 1 Maturity Principal Amount Interest Rate Yield CUSIP Base: $ 450, , , , , , , , , , , ,030, ,085, ,140, ,200, ,265, ,335, ,405, ,480,000 $10,665,000* % Term Bond due July 1, Yield % (CUSIP: ) CUSIP numbers have been assigned to this issue by Standard & Poor s CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Series 2006 Bonds. Neither the Authority nor the Underwriters shall be responsible for the selection or correctness of the CUSIP numbers set forth above. *Preliminary, subject to change.

3 REGARDING USE OF THE OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, any such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2006 Bonds, by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been furnished by the Authority and other sources which are believed to be reliable. While the Underwriters have performed a review sufficient to form a reasonable basis for their belief in the accuracy and completeness of the key representations of the Authority contained in this Official Statement, the Underwriters do not guarantee the accuracy or the completeness of this Official Statement. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the information or opinions set forth herein after the date of this Official Statement. OTHER THAN WITH RESPECT TO INFORMATION CONCERNING RADIAN ASSET ASSURANCE INC. CONTAINED UNDER THE CAPTION FINANCIAL GUARANTY INSURANCE HEREIN AND IN APPENDIX F HERETO, NONE OF THE INFORMATION IN THIS OFFICIAL STATEMENT HAS BEEN SUPPLIED OR VERIFIED BY RADIAN ASSET ASSURANCE INC., AND RADIAN ASSET ASSURANCE INC. MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO: (I) THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION; (II) THE VALIDITY OF THE SERIES 2006 BONDS; OR (III) THE TAX STATUS OF THE INTEREST ON THE SERIES 2006 BONDS. All references made herein to the Series 2006 Bonds are qualified in their entirety by reference to the Bond Indenture. All references made herein to the documents collectively constituting the Bond Indenture and the Lease are qualified in their entirety by reference to such complete documents, original counterparts of which are on file in the offices of the Authority, located in the Comanche County Memorial Hospital, 3401 West Gore Boulevard, Lawton, Oklahoma, 73505, and the corporate trust offices of the Trustee in Oklahoma City, Oklahoma. The cover page contains information for quick reference only. It is not a summary of this issue. Investors must read this entire Official Statement to obtain information essential and material to the making of an informed investment decision. This Official Statement contains statements that are forward-looking statements as defined in the Private Securities Litigation Reform Act of When used in this Official Statement, the words estimate, intend, expect and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. In connection with this offering, the Underwriters may over-allot or effect transactions which stabilize or maintain the market price of the Series 2006 Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. THIS PRELIMINARY OFFICIAL STATEMENT IS DEEMED TO BE FINAL (EXCEPT FOR PERMITTED OMISSIONS) BY THE AUTHORITY FOR PURPOSES OF COMPLYING WITH RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION.

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5 TABLE OF CONTENTS INTRODUCTION...1 THE AUTHORITY...2 Organization and Powers...2 The Beneficiary...3 The Lease...3 Existing Indebtedness...3 SOURCES OF PAYMENT FOR THE SERIES 2006 BONDS...4 THE SERIES 2006 BONDS...5 General...5 Payments of Principal and Interest...6 Redemption of the Series 2006 Bonds...6 BOOK-ENTRY SYSTEM...8 FINANCIAL GUARANTY INSURANCE...11 Description of Financial Guaranty Insurance Policy...11 Radian Asset Assurance Inc...11 PLAN OF REFUNDING AND APPLICATION OF SERIES 2006 BOND PROCEEDS...14 Plan of Refunding...14 Estimated Sources and Uses of Funds...15 ESTIMATED DEBT SERVICE SCHEDULE...16 INVESTMENT CONSIDERATIONS...16 General...16 Federal and State Legislation and Regulation...17 Audits; General Compliance...25 Regulatory and Contractual Actions...25 Antitrust...26 Maintenance of Tax-Exempt Status...26 Private Health Plans and Insurers...26 Changes in Health Care Delivery...27 Licensing, Surveys, Investigations and Audits...28 Environmental Laws and Regulations...28 Malpractice Claims and General Liability Insurance...29 Other Factors that Could Affect Adversely the Hospital...29 Factors Concerning the Enforceability of the Bond Indenture...30 Limitations on Security Interests in Pledged Revenues...30 Secondary Market...31 Book-Entry...31 TAX EXEMPTION...31 Federal Income Tax Exemption...31 Federal Income Taxation Accounting Treatment of Original Issue Discount...32 Federal Income Taxation Accounting Treatment of Original Issue Premium...33 State Income Tax Exemption...33 LEGAL MATTERS...33 ELIGIBILITY FOR INVESTMENT IN OKLAHOMA...33 NO LITIGATION...33 UNDERWRITING...34 INDEPENDENT ACCOUNTANTS...34 ONGOING DISCLOSURE...34 RATINGS...35 MISCELLANEOUS...35 Appendix A Certain Information Regarding the Authority and the Hospital Appendix B Financial Statements and Audit Report as of and for the Years Ended June 30, 2006 and 2005 Appendix C Definitions and Summaries of Certain Provisions of the Bond Indenture and the Lease Appendix D Proposed Form of Opinion of Bond Counsel Appendix E Form of Continuing Disclosure Agreement Appendix F Specimen Financial Guaranty Insurance Policy Page

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7 OFFICIAL STATEMENT $29,010,000* COMANCHE COUNTY HOSPITAL AUTHORITY (Lawton, Oklahoma) HOSPITAL REVENUE REFUNDING BONDS SERIES 2006 INTRODUCTION This Official Statement, including the cover page and Appendices, is being provided by the Trustees of the Comanche County Hospital Authority (the Authority ), in connection with the issuance of the Authority s $29,010,000* Hospital Revenue Refunding Bonds, Series 2006 (the Series 2006 Bonds ). The Authority is a public trust duly created by a Declaration of Trust Indenture dated January 13, 1971, as amended, for the use and benefit of Comanche County, Oklahoma (the County ) under the provisions of Title 60, Oklahoma Statutes 2001, Sections 176 et seq., as amended (the Act ). See THE AUTHORITY herein. The Series 2006 Bonds (together with the Series 2004 Bonds and the Series 2005 Bonds described herein, and any Additional Indebtedness issued in the future on a parity therewith, collectively referred to herein as the Bonds ) are being issued under the Bond Indenture (the Original Bond Indenture ), dated as of October 1, 1993, by and between the Authority and Bank of Oklahoma, N.A., as trustee (the Trustee ), as previously supplemented by a Loan Agreement and Supplemental Bond Indenture dated as of January 1, 2002 (the 2002 Supplemental Indenture ), a Supplemental Bond Indenture dated as of December 1, 2004 (the 2004 Supplemental Indenture ), a Supplemental Bond Indenture dated as of November 1, 2005 (the 2005 Supplemental Indenture ), and as supplemented by the Series 2006 Supplemental Bond Indenture (the Series 2006 Supplemental Indenture ) dated as of December 1, 2006, by and between the Authority and the Trustee, (the Original Bond Indenture, as previously supplemented and as supplemented by the Series 2006 Supplemental Indenture is collectively referred to herein as the Bond Indenture ). See Appendix C hereto for a summary of certain provisions of the Bond Indenture. The Authority operates the Comanche County Memorial Hospital (the Hospital or the Facilities ), an acute-care general hospital located in Lawton, Oklahoma. See Appendix A hereto for information regarding the Hospital and its operations and Appendix B hereto for audited financial statements for the years ended June 30, 2006 and The County has leased the Hospital to the Authority pursuant to the Lease dated January 13, 1971 (the Lease ), for a term extending to the original termination date of January 12, 2001, and so long thereafter as any indebtedness of the Authority secured by any revenues of the Hospital remains outstanding. In July 2000, the Authority exercised an option to renew the term of the Lease for an additional 30-year period ending January 12, 2031 (and so long thereafter as any indebtedness incurred by the Authority remains outstanding). See Appendix C hereto for a summary of certain provisions of the Lease. The proceeds of the Series 2006 Bonds, together with certain other available funds, will be used to (i) defease and discharge the Authority s ODFA Payment Obligations with respect to a series of revenue bonds issued by The Oklahoma Development Finance Authority for the use and benefit of the Authority and the Hospital described under PLAN OF REFUNDING AND APPLICATION OF SERIES 2006 BOND PROCEEDS herein (the ODFA Bonds ), (ii) provide funds for certain capital expenditures for the Hospital, (iii) fund certain debt service reserve fund requirements and (iv) pay certain costs of issuance of the Series 2006 Bonds. *Preliminary, subject to change.

8 The Authority, pursuant to the Bond Indenture, is issuing its Series 2006 Bonds on a parity basis with the Authority s $14,930,000 currently outstanding Hospital Revenue Refunding Bonds, Series 2004, issued on December 16, 2004, in the original aggregate principal amount of $18,335,000 (the Series 2004 Bonds ) and the Authority s $32,970,000 currently outstanding Hospital Revenue Refunding Bonds, Series 2005, issued on November 30, 2005, in the original aggregate principal amount of $32,970,000 (the Series 2005 Bonds ). The Series 2004 Bonds and the Series 2005 Bonds are collectively referred to herein as the Outstanding Bonds. See THE AUTHORITY Existing Indebtedness, SOURCES OF PAYMENT FOR THE SERIES 2006 BONDS and PLAN OF REFUNDING AND APPLICATION OF SERIES 2006 BOND PROCEEDS herein. All Bonds issued under the Bond Indenture are special obligations of the Authority, payable from the Trust Estate pledged thereto under the Bond Indenture. The Bond Indenture requires that monthly payments be made by the Authority in amounts and at times sufficient to pay the principal, redemption premium, if any, and interest on the Series 2006 Bonds and the Outstanding Bonds, as well as other amounts required by the Bond Indenture including debt service payments on any Additional Indebtedness that may be issued on a parity therewith under the Bond Indenture. The Authority may issue Additional Indebtedness on a parity with the Series 2006 Bonds and the Outstanding Bonds to the extent and under the conditions set forth in the Bond Indenture. See SOURCES OF PAYMENT FOR THE SERIES 2006 BONDS and Appendix C herein. The covenants and representations contained in the Bond Indenture do not and shall never constitute a personal or pecuniary liability or charge against the general credit of the Authority or the individual Trustees thereof. The Series 2006 Bonds are not obligations or debts of the State of Oklahoma or the County, or any municipality, county, political subdivision, or governmental unit or agency of the State of Oklahoma, and neither the faith and credit nor the taxing power of the State of Oklahoma, nor of any county, municipality, subdivision, or governmental unit or agency thereof or of the County is pledged to the payment of the Series 2006 Bonds. THE AUTHORITY HAS NO TAXING POWER. See SOURCES OF PAYMENT FOR THE SERIES 2006 BONDS and INVESTMENT CONSIDERATIONS herein. There follow brief descriptions of the Authority, the Hospital, the Series 2006 Bonds, the Bond Indenture, the Lease and related matters. Such descriptions do not purport to be comprehensive or definitive and references to such documents are qualified in their entirety by reference to the complete texts thereof. Capitalized terms used in this Official Statement and not otherwise defined shall have the meanings assigned thereto in the Bond Indenture and the Lease. See Appendix C hereto for definitions of certain terms used in this Official Statement and for summaries of certain provisions of the Bond Indenture and the Lease. Organization and Powers THE AUTHORITY The Authority was created pursuant to a Declaration of Trust Indenture dated January 13, 1971, as amended (the Trust Indenture ), for the benefit of the County. The Authority is a public trust and an agency of the State of Oklahoma under the Act and is governed by five Trustees (the Trustees ) appointed by the Board of County Commissioners of the County to serve for terms of five years. Trustees of the Authority must be residents of the County and not more than three of the Trustees may be residents of the City of Lawton, Oklahoma. The purpose of the Authority, as is more fully described in the Trust Indenture, is to promote and to encourage the development of health care of any and every type within and near the corporate limits of 2

9 the County and in territory in reasonably convenient proximity thereto by instituting, furnishing and providing facilities to other governmental subdivisions or agencies or to other entities. The Authority is not organized for profit and no part of its net earnings may inure to the benefit of any private person. The Act provides that no Trustee of the Authority may be charged personally with any liability whatsoever by reason of any act or omission committed or suffered in performance of the functions of the Authority or in the operation of the Authority s property. The Authority has no taxing power. The current Trustees of the Authority are identified under Governance and Administration in Appendix A hereto. The Authority s offices are located at the Comanche County Memorial Hospital, 3401 West Gore Boulevard, Lawton, Oklahoma The Beneficiary Comanche County, Oklahoma, is the beneficiary of the public trust, and all properties held by the Authority shall become the property of the beneficiary upon termination of the Authority. The governing body of the County is the Board of County Commissioners. Under Oklahoma law, creation of any bonded indebtedness and a negotiated sale or a sale of obligations at a discount by a county public trust such as the Authority requires approval by a two-thirds (2/3) vote of the governing body of the beneficiary. For certain limited information relating to the County, see Service Area in Appendix A hereto. The Lease The County has leased the Hospital to the Authority pursuant to the Lease dated January 13, 1971 (the Lease ), for a term extending to the original termination date of January 12, 2001, and so long thereafter as any indebtedness of the Authority secured by any revenues of the Hospital remains outstanding. In July 2000, the Authority exercised an option to renew the term of the Lease for an additional 30-year period ending January 12, 2031 (and so long thereafter as any indebtedness incurred by the Authority remains outstanding). See Appendix C hereto for a summary of certain provisions of the Lease. Existing Indebtedness The Series 2004 Bonds are currently outstanding in the aggregate principal amount of $14,930,000 consisting of serial bonds maturing July 1 in each of the years The Series 2005 Bonds are currently outstanding in the aggregate principal amount of $32,970,000 consisting of serial bonds maturing July 1 in each of the years In addition, the Authority has secured its payment obligations with respect to a series of revenue bonds issued by The Oklahoma Development Finance Authority for the use and benefit of the Authority and the Hospital described under PLAN OF REFUNDING AND APPLICATION OF SERIES 2006 BOND PROCEEDS herein, which payment obligations will be defeased and discharged upon the issuance of the Series 2006 Bonds. The scheduled annual debt service requirements for the Series 2006 Bonds, the Series 2005 Bonds and the Series 2004 Bonds are included in the amounts set forth in the table appearing under the caption ESTIMATED DEBT SERVICE SCHEDULE herein. In addition, the Authority has other indebtedness not secured under the Bond Indenture including certain capitalized lease obligations and notes payable all as described under the heading Outstanding Indebtedness in Appendix A hereto. The estimated annual debt service requirements for such other indebtedness are included in the amounts set forth under the column Debt Service on Outstanding Indebtedness in the table appearing under the caption ESTIMATED DEBT SERVICE SCHEDULE herein. 3

10 SOURCES OF PAYMENT FOR THE SERIES 2006 BONDS The Series 2006 Bonds are limited and special obligations of the Authority payable solely from the Trust Estate. The Series 2006 Bonds are special obligations of the Authority and do not constitute an obligation either general or special of the State of Oklahoma or Comanche County, Oklahoma, within the meaning of any constitutional or statutory provisions. Neither the faith and credit nor the taxing power of the State of Oklahoma, any county, municipality, political subdivision or governmental unit or agency thereof or of the County is or shall be pledged to the payment of the principal of or interest on the Series 2006 Bonds. THE AUTHORITY HAS NO TAXING POWER. The Series 2006 Bonds (together with the Series 2005 Bonds, the Series 2004 Bonds and any Additional Indebtedness that may be issued in the future on a parity therewith) are payable solely from the Trust Estate held by the Trustee under the Bond Indenture consisting of the following described property: (i) the interest of the Authority in and to the Pledged Revenues; (ii) all funds and accounts created under the Bond Indenture except the Rebate Fund and all other moneys held by the Trustee for the payment of the Bonds; (iii) all other real or personal property of the Authority, of every kind and nature from time to time hereafter by delivery or by writing conveyed, pledged, assigned or transferred as and for additional security for the Bonds, to the Trustee, which is authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms of the Bond Indenture; and (iv) all interest of the Authority in and to all proceeds, fees, charges, revenues, income, rents, receipts, issues and benefits from the foregoing. The Pledged Revenues of the Authority are defined to include all receipts, revenues, income and other moneys received by or on behalf of the Authority including, without limitation, contributions, donations and pledges whether in the form of cash, securities or other personal property, revenues derived from the ownership or operation of the Hospital, including insurance and condemnation proceeds with respect to any portion thereof, and all rights to receive the same, whether in the form of accounts, accounts receivable, contract rights or other rights, and the proceeds of such rights, and whether now owned or held or hereafter coming into existence, and the proceeds of the Bonds pending their application in accordance with the Bond Indenture; provided, however, that gifts, grants, bequests, donations and contributions heretofore or hereafter made and designated or specified by the granting authority, donor or maker thereof as being for specified purposes and the income derived therefrom to the extent required by such designation or specification shall be excluded from Pledged Revenues. The Bond Indenture creates the Bond Reserve Fund with amounts deposited therein to be withdrawn by the Trustee in the event that moneys in the Bond Account and Sinking Fund are insufficient to pay the principal of or interest on all Bonds Outstanding thereunder when due. Upon the issuance of the Series 2006 Bonds, there will be deposited therein an amount sufficient to cause the total amount held in the Bond Reserve Fund to be equal to the Reserve Requirement (see the definition thereof in Appendix C hereto). The Bond Indenture provides that the Authority shall make monthly deposits with the Trustee in amounts, after the application of certain credits for investment earnings, equal to one-sixth of the interest and one-twelfth of the principal payments due on the Bonds on the next interest payment date and/or principal payment date plus amounts necessary to replenish or restore the amount required to be on deposit in the Bond Reserve Fund. The Bond Indenture also provides, in the event such payments are not made timely as required by the Bond Indenture, that the Authority thereafter shall be required to deposit the Pledged Revenues into a Revenue Fund established under the Bond Indenture to be applied in the following priority by the Trustee: to pay principal and interest on the Bonds; to replenish the Bond Reserve Fund; to pay the costs and expenses of operating and maintaining the Hospital; and any remainder to be applied to any proper purpose of the Authority. 4

11 The Bond Indenture contains various other covenants relating to, among other things, the incurrence of Additional Indebtedness, the sale, lease or other disposition of property, the establishment of rates, fees and charges and other matters. See Appendix C hereto for a description of the foregoing provisions and other provisions of the Bond Indenture. The Bonds are not secured by any mortgage or other lien on any real or tangible personal property of the Authority. The actual realization of amounts to be derived upon the enforcement of any obligation securing the Series 2006 Bonds will depend upon the exercise of various remedies specified in the Bond Indenture. These and other available remedies may require judicial action of a nature that is often subject to discretion and delay. Under existing law, the remedies specified in such documents may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in these financing documents. The various legal opinions to be delivered concurrently with the delivery of the Series 2006 Bonds will state that the enforceability of such instruments may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors rights generally and by general principles of equity. For a discussion of certain risks associated with an investment in the Series 2006 Bonds, see INVESTMENT CONSIDERATIONS herein. See Appendix A hereto for certain information regarding the Authority and the Hospital. See Appendix B hereto for the Financial Statements and Audit Reports of the Hospital as of and for the Years Ended June 30, 2006 and THE SERIES 2006 BONDS The following is a summary of certain provisions of the Series 2006 Bonds. Reference is made to the Series 2006 Bonds themselves for the complete text thereof and to the Bond Indenture, and the discussion herein is qualified by such reference. General Form and Denomination. The Series 2006 Bonds will be issuable as fully registered bonds in denominations of $5,000 each or any integral multiple of $5,000. Transfer and Exchange. The Series 2006 Bonds are issued only in fully registered form, and will be initially offered only in book-entry form, registered in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ), New York, New York, which will act as Securities Depository of the Series 2006 Bonds. See BOOK-ENTRY SYSTEM, herein. For so long as Cede & Co. remains the registered owner of the Series 2006 Bonds, payments of principal and interest on the Series 2006 Bonds will be made by the Trustee directly to DTC or Cede & Co. as the nominee of DTC. The Series 2006 Bonds are transferable by the registered owner thereof in person or by his attorney duly authorized in writing at the principal office of the Trustee but only in the manner, subject to the limitations and upon payment of the charges provided in the Bond Indenture, and upon surrender and cancellation of such Series 2006 Bonds. Upon such transfer a new bond or bonds of the same maturity or maturities, interest rate or rates and of authorized denomination or denominations, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. The Authority and the Trustee may deem and treat the registered owner of the bond or bonds as the absolute owner thereof (whether or not the 5

12 bond shall be overdue) for the purpose of receiving payment thereon and for all other purposes and neither the Authority nor the Trustee shall be affected by any notice to the contrary. Upon payment of a transfer charge as provided in the Bond Indenture and any required tax, fee or other governmental charge and subject to such conditions, any Series 2006 Bond, upon the surrender thereof at the principal office of the Trustee with a written instrument of transfer, in form and with guarantee of signature satisfactory to the Trustee, duly executed by the registered owner or such owner's duly authorized attorney, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of bonds of the same maturity and interest rate of any other authorized denomination. The Authority and the Trustee shall not be required (a) to issue, transfer or exchange any bonds during a period beginning at the close of business 15 calendar days next preceding either any interest payment date or any date of selection of bonds to be redeemed and ending at the close of business on the interest payment date or day on which the applicable notice of redemption is given, or (b) to transfer or exchange any bonds (other than as provided in clause (a) above) selected, called or being called for redemption in whole or in part. The Authority or the Trustee may make a charge for every such exchange or transfer of bonds sufficient to reimburse it for any tax, or other governmental charge required to be paid with respect to such exchange or transfer, but no other charge shall be made to any Bondholder for the privilege of exchanging or transferring bonds under the provisions of the Bond Indenture. Except as otherwise provided in the preceding sentence, the cost of preparing each new bond upon each exchange or transfer and any other expense of the Authority or the Trustee incurred in connection therewith shall be paid by the Authority. Payments of Principal and Interest The Series 2006 Bonds will bear interest at the rates and mature in the amounts set forth on the inside cover page of this Official Statement. Principal of and interest due at maturity on the Series 2006 Bonds will be payable to the owners of such Series 2006 Bonds upon presentation and surrender thereof at the principal corporate trust office of the Trustee as Bond Registrar (the Registrar ). Payments of interest on the Series 2006 Bonds (except interest due at maturity) shall be made by the Registrar on each January 1 and July 1, commencing July 1, 2007, to the registered owner thereof by check or draft (or at the option of the owner of an aggregate principal amount of Series 2006 Bonds at least equal to $1,000,000, by wire transfer) mailed to the address of such registered owner as it appears on the registration books of the Authority maintained by the Registrar as of the Record Date. The term Record Date means the day which is the 15 th day of the calendar month next preceding any Interest Payment Date or, if such day is not a Business Day, the next preceding Business Day. Redemption of the Series 2006 Bonds Optional Redemption. The Series 2006 Bonds maturing on and after July 1, 2016, are subject to redemption prior to maturity at the option of the Authority on and after July 1, 2015, at a price of par plus accrued interest to the date of redemption. Mandatory Sinking Fund Redemption. The Series 2006 Term Bond maturing July 1, 2031*, is subject to mandatory redemption prior to maturity, in part by lot, on July 1 in each of the years and in the principal amounts set forth below at a redemption price of 100% of the principal amount to be redeemed, plus interest accrued to the date fixed for redemption: *Preliminary, subject to change. 6

13 $10,665,000* Series 2006 Term Bond Date Principal Amount Date Principal Amount Date Principal Amount 7/1/26 $1,555,000 7/1/28 $1,725,000 7/1/30 $1,915,000 7/1/27 1,640,000 7/1/29 1,815,000 7/1/31 2,015,000 Final Maturity Extraordinary Optional Redemption. The Series 2006 Bonds are subject to redemption at the option of the Authority in whole or in part, at any time, if such redemption is made from: (i) insurance proceeds; (ii) expropriation awards; or (iii) payments received from the Authority pursuant to an Event of Default under the Bond Indenture. In the event that such redemption is made, such redemption shall be made at the principal amount so redeemed and interest thereon to the redemption date. The Series 2006 Bonds are subject to redemption prior to maturity, at the option of the Authority, in whole at any time at a redemption price of 100% of the principal amount of each Bond called for redemption, plus interest accrued to the date fixed for redemption, without premium, if, as a result of any change in the Constitution or laws of the United States of America or of the State of Oklahoma or legislative or administrative action, whether State or Federal, or by final judgment in a court of competent jurisdiction after the contest thereof by the Authority in good faith, wherein (i) the Bond Indenture or the Lease becomes void, unenforceable, or impossible of performance in accordance with the intent and purpose of the parties as expressed therein or (ii) the interest on the Series 2006 Bonds shall become subject to federal income taxes. Provisions Relating to Redemption of Series 2006 Bonds. If less than all the Series 2006 Bonds shall be called for redemption, the particular Series 2006 Bonds or portions of Series 2006 Bonds to be redeemed shall be selected from all Series 2006 Bonds then Outstanding, in such manner as the Trustee in its discretion may deem proper; provided, however, that the portion of any Series 2006 Bonds to be redeemed shall be in the principal amount of $5,000 or some integral multiple thereof and that in selecting Series 2006 Bonds for redemption, the Trustee shall treat each Series 2006 Bond as representing that number of Series 2006 Bonds which is obtained by dividing the principal amount of such registered Series 2006 Bond by $5,000 (such amounts being hereinafter referred to as the applicable units of principal amount ). If it is determined that one or more, but not all, of the $5,000 units of principal amount represented by any such Series 2006 Bond is to be called for redemption, then upon notice of intention to redeem such $5,000 unit or units, the holder of such Series 2006 Bond shall forthwith surrender such Series 2006 Bond to the Trustee for (i) payment of redemption price (including interest to the date fixed for redemption) of the $5,000 unit or units of principal amount called for redemption and (ii) exchange for a new Series 2006 Bond or Series 2006 Bonds of the aggregate principal amount of such Series 2006 Bond not called for redemption. If the holder of any such Series 2006 Bond of a denomination greater than $5,000 shall fail to present such Series 2006 Bond to the Trustee for payment and exchange as aforesaid, such Series 2006 Bond shall, nevertheless, become due and payable on the date fixed for redemption to the extent of the $5,000 unit or units of principal amount called for redemption (and to that extent only). At least thirty (30) days and not more than sixty (60) days before the redemption date of the Series 2006 Bonds to be redeemed, the Trustee shall cause notice of any such redemption signed by the Trustee to be mailed, postage prepaid, to all Bondholders owning or holding Series 2006 Bonds to be redeemed in whole or in part, at their addresses as they appear on the registration books hereinabove provided for, but failure to so mail any such notice shall not affect the validity of the proceedings for such redemption. Each such notice shall set forth the date fixed for redemption, the redemption price to be paid and, if less than all of the Series 2006 Bonds of any one maturity then Outstanding shall be called for redemption, the *Preliminary, subject to change. 7

14 numbers and letters, if any, of such Series 2006 Bonds to be redeemed, and the portion of the principal amount thereof to be redeemed. In case any Series 2006 Bond is to be redeemed in part only, the notice of redemption which relates to such Series 2006 Bond shall state also that on or after the redemption date, upon surrender of such Series 2006 Bond, a new registered Series 2006 Bond in principal amount equal to the unredeemed portion of such Series 2006 Bond will be issued. On the date so designated for redemption, notice having been given in the manner and under the conditions hereinabove provided and money for payment of the redemption price being held in separate accounts by the Trustee or by any paying agents in trust for the holders of the Series 2006 Bonds or portions thereof to be redeemed, all as provided in the Bond Indenture, the Series 2006 Bonds shall become and be due and payable at the redemption price provided for redemption of such Series 2006 Bonds or portions of Series 2006 Bonds on such date, interest on the Series 2006 Bonds or portions of Series 2006 Bonds so called for redemption payable subsequent to the redemption date shall be void, such Series 2006 Bonds or portions of Series 2006 Bonds shall cease to be entitled to any benefit of the Bond Indenture and the holders of such Series 2006 Bonds or portions of Series 2006 Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof and, to the extent provided in the next paragraph, to receive Series 2006 Bonds for any unredeemed portions of Series 2006 Bonds. In case part but not all of an Outstanding Series 2006 Bond shall be selected for redemption, the registered owner thereof or his legal representative shall present and surrender such Series 2006 Bond to the Trustee for payment of the principal amount thereof so called for redemption, and the Authority shall execute and the Trustee shall authenticate and deliver to or upon the order of such registered owner or his legal representative, without charge therefor, for the unredeemed portion of the principal amount of the registered bond so surrendered, a new bond of the same series and maturity and bearing interest at the same rate. Series 2006 Bonds of less than a full maturity may be selected by the Trustee in such equitable manner as it may determine. Series 2006 Bonds and portions of Series 2006 Bonds which have been duly called for redemption under the provisions of the Bond Indenture, or with respect to which irrevocable instructions to call for redemption at the earliest redemption date have been given to the Trustee in form satisfactory to it, and for the payment of the redemption price for which moneys shall be held in separate accounts by the Trustee or by any escrow agent in trust for the holders of the Series 2006 Bonds or portions thereof to be redeemed, all as provided in the Bond Indenture, shall not thereafter be deemed to be Outstanding under the provisions of the Bond Indenture and shall cease to be entitled to any security or benefit under the Bond Indenture other than the right to receive payment from such moneys. BOOK-ENTRY SYSTEM The information in this section concerning The Depository Trust Company ( DTC ) and DTC s book-entry-only system has been obtained from DTC, and the Authority and the Underwriters take no responsibility for the accuracy thereof. The Depository Trust Company ( DTC ), New York, New York, will act as securities depository for the Series 2006 Bonds. The Series 2006 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2006 Bond certificate will be issued for each maturity of the Series 2006 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC at the office of the Trustee on behalf of DTC utilizing the DTC FAST system of registration. DTC, the world s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a 8

15 member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 2 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non- U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at Purchases of Series 2006 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2006 Bonds on DTC s records. The ownership interest of each actual purchaser of each Series 2006 Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2006 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2006 Bonds, except in the event that use of the book-entry system for the Series 2006 Bonds is discontinued. To facilitate subsequent transfers, all Series 2006 Bonds deposited by Direct Participants with DTC (or the Trustee on behalf of DTC utilizing the DTC FAST system of registration) are registered in the name of DTC s partnership nominee, Cede & Co or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2006 Bonds with DTC (or the Trustee on behalf of DTC utilizing the DTC FAST system of registration) and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2006 Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Series 2006 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 9

16 Redemption notices shall be sent to DTC. If less than all the Series 2006 Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2006 Bonds unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Series 2006 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions and dividend payments on the Series 2006 Bonds will be made to Cede &Co. or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Authority or the Paying Agent on the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Series 2006 Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Series 2006 Bond certificates are required to be printed and delivered. The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 2006 Bond certificates will be printed and delivered. The Authority, Bond Counsel, the Trustee and the Underwriters cannot and do not give any assurances that the DTC Participants will distribute to the Beneficial Owners of the Series 2006 Bonds: (i) payments of principal of or interest on the Series 2006 Bonds; (ii) certificates representing an ownership interest or other confirmation of Beneficial Ownership interests in the Series 2006 Bonds; or (iii) redemption or other notices sent to DTC or its nominee, as the Registered Owners of the Series 2006 Bonds; or that they will do so on a timely basis or that DTC or its participants will serve and act in the manner described in this official statement. The current Rules applicable to DTC are on file with the Securities and Exchange Commission and the current Procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. None of the Authority, Bond Counsel, the Trustee or the Underwriters will have any responsibility or obligation to such DTC Participants (Direct or Indirect) or the persons for whom they act as nominees with respect to: (i) the Series 2006 Bonds; (ii) the accuracy of any records maintained by DTC or any DTC Participant; (iii) the payment by any DTC Participant of any amount due to any Beneficial Owner in respect of the principal amount of or interest on the Series 2006 Bonds; (iv) the delivery by any DTC Participant of any notice to any Beneficial Owner which is required or permitted under the terms of the Bond Indenture to be given to Registered Owners; (v) the selection of the Beneficial Owners to receive payment in the event of 10

17 any partial redemption of the Series 2006 Bonds; or (vi) any consent given or other action taken by DTC as Registered Owner. In reading this Official Statement, it should be understood that while the Series 2006 Bonds are in the Book Entry system, references in other sections of this Official Statement to Registered Owner should be read to include the Beneficial Owners of the Series 2006 Bonds, but: (i) all rights of ownership must be exercised through DTC and the Book Entry system; and (ii) notices that are to be given to Registered Owners by the Authority or the Trustee will be given only to DTC. FINANCIAL GUARANTY INSURANCE Description of Financial Guaranty Insurance Policy A financial guaranty insurance policy (the Policy ) will be issued by Radian Asset Assurance Inc. (the Insurer ) simultaneously with the issuance and delivery of the Series 2006 Bonds. The Policy is noncancelable during its term and provides for the prompt payment of principal of and interest on the Series 2006 Bonds to the extent that Bank of Oklahoma, N.A., as Trustee (the Trustee ), has not received sufficient funds from Comanche County Hospital Authority (the Issuer ) for payment of the Series 2006 Bonds on the due date. The Insurer is obligated to make the required payment on the later of the due date or the first business day after which the Insurer has received notice from The Bank of New York, as Insurance Trustee (the Insurance Trustee ), that the Issuer has failed to pay amounts due on the Series 2006 Bonds. Under the Policy, the due date of the Series 2006 Bonds, when referring to the payment of principal, means the stated maturity date thereof or the date on which payment of principal is due by reason of mandatory sinking fund payments and does not mean any earlier date on which payment is due by reason of any call for redemption, acceleration, or other advancement of maturity, other than in the discretion of the Insurer. With respect to interest on the Series 2006 Bonds, the due date means the stated date for payment of interest. The Policy guarantees reimbursement of any recovery of any such payment from a Holder or the Trustee pursuant to a final judgment by any court of competent jurisdiction holding that such payment constituted a voidable preference within the meaning of any applicable bankruptcy law. Upon the occurrence and continuance of an Event of Default, the Insurer, may, in its discretion, direct the acceleration of the Series 2006 Bonds at a price equal to the principal amount thereof plus accrued interest, or the Insurer may elect to continue to pay principal and interest on the originally scheduled due dates of the Series 2006 Bonds. For specific information on the coverage provided, reference should be made to the Policy that has been reproduced in specimen form in Appendix F hereto. The Policy does not insure against nonpayment of principal or interest on the Series 2006 Bonds due to the insolvency, misconduct or negligence of the Trustee. The Policy does not insure the payment of any redemption premium. Radian Asset Assurance Inc. Radian Asset Assurance Inc. (the Insurer ) is a monoline financial guaranty insurance company, regulated by the Insurance Department of the State of New York and licensed to do business in all 50 states, the District of Columbia, Guam and the United States Virgin Islands. As September 30, 2006, the Insurer had total consolidated shareholders equity of approximately $1,557,829,000 and total consolidated assets of approximately $2,543,356,000. The financial information relating to the Insurer presented in this Official Statement was prepared internally by the Insurer, based on accounting principles generally accepted in the United States of America ( GAAP ), and has not been audited by independent auditors. The address of the Insurer s 11

18 administrative office is 335 Madison Avenue, New York, New York 10017, and its telephone number is On March 2, 2006, the Insurer entered into a settlement agreement with respect to two financial guaranty contracts insured by the Insurer on a direct basis. Under this agreement, the Insurer paid $68.0 million to its counterparty in consideration for its counterparty s terminating one of these transactions, a synthetic collateralized debt obligation representing $247.5 million in exposure, and amending the other transaction to add certain structural changes that the Insurer believes will improve its overall risk profile. Additional information regarding this settlement may be found in Management s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Financial Guaranty Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 Provision for Losses in Item 7 of Part II of the Annual Report on Form 10-K filed by the Insurer s ultimate corporate parent, Radian Group Inc. ( Radian ) with the Securities and Exchange Commission. The Insurer has filed the information in (i) (iv) below with entities designated as Nationally Recognized Municipal Securities Information Repositories ( NRMSIRs ) pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934, and such financial information is available through such NRMSIRs: (i) The Insurer s audited consolidated financial statements as of December 31, 2005 and 2004 and for each of the three years in the period ended December 31, 2005 prepared in accordance with GAAP, together with the accompanying report of the Insurer s independent registered public accounting firm, which expresses an unqualified opinion (the Radian Financial Statements ). (ii) The Insurer s quarterly unaudited consolidated balance sheet as of March 31, 2006 and unaudited consolidated statement of operations for the three month period then ended, prepared in accordance with GAAP. (iii) The Insurer s quarterly unaudited consolidated balance sheet as of June 30, 2006 and unaudited consolidated statement of operations for the six-month period then ended, prepared in accordance with GAAP. (iv) The Insurer s quarterly unaudited consolidated balance sheet as of September 30, 2006 and unaudited consolidated statement of operations for the nine-month period then ended, prepared in accordance with GAAP. Additional information regarding the Insurer can be found in the following documents filed by Radian with the Securities and Exchange Commission: (a) Annual Report on Form 10-K for the year ended December 31, 2005 and the Quarterly Reports on Form 10-Q for the periods ended March 31, 2006, June 30, 2006 and September 30, 2006 under the headings: (i) Safe Harbor Statement (but only insofar as it relates to the financial guaranty insurance businesses); (ii) 10-K only, Item 1. Business: Financial Guaranty Business, Defaults and Claims Financial Guaranty, Loss Mitigation Financial Guaranty, Reserve for Losses Financial Guaranty, Risk Management Financial Guaranty, Risk in Force Financial Guaranty Business, Customers Financial Guaranty Business, Sales and Marketing Financial Guaranty Business, Competition Financial Guaranty Business, Ratings (but only insofar as it relates to the Insurer or Radian Reinsurance Inc.), and Regulation Direct Regulation (but only insofar as it relates to the financial guaranty business); (iii) 10-K only, Item 1A Risk Factors Risks Affecting Our Company (but only insofar as it relates to the Insurer) and Risks Particular to our Financial Guaranty Business ; (iv) 10-K Only Item 6 Selected Financial Data, Selected Ratios Financial Guaranty and Other Data Financial Guaranty, (v) Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations Financial Guaranty Results of Operations and Liquidity and Capital Resources (but only to the extent it relates 12

19 to the Insurer or Radian Reinsurance Inc.), and Critical Accounting Policies (but only to the extent that it relates to Financial Guaranty ); and (vi) 10-Q only, Item 2 Management s Discussion and Analysis of Financial Condition and Results of Operations, Overview, Business Summary Financial Guaranty, Results of Operations Financial Guaranty, Liquidity and Capital Resources (but only to the extent that it relates to the Insurer) and Critical Accounting Policies (but only to the extent that it relates to Financial Guaranty ) and (b) the Reports on Form 8-K dated January 19, 2006, February 13, 2006, March 15, 2006, April 20, 2006, May 12, 2006, June 30, 2006, July 20, 2006, July 26, 2006, October 19, 2006 and October 27, A complete copy of the Radian Financial Statements is available from the Insurer upon written request. Prior year amounts included in the Radian Financial Statements have been restated to reflect the combined balances and results of operations of the Insurer and Radian Reinsurance Inc. The Insurer is an indirect, wholly owned subsidiary of Radian, a publicly owned corporation with its shares listed on the New York Stock Exchange (symbol RDN ). Radian is a leading credit enhancement provider to the global financial and capital markets, headquartered in Philadelphia, Pennsylvania. Radian s subsidiaries provide products and services through three business lines: financial guaranty, mortgage insurance and financial services. None of Radian, Radian s other subsidiaries or any of Radian s investors is obligated to pay the debts of or claims against the Insurer. On June 29, 2006, Standard & Poor s Ratings Services, a division of The McGraw-Hill Companies, Inc. ( S&P ), affirmed the Insurer s AA financial strength rating and revised upward its outlook on the Insurer from negative to stable. The Insure also has an insurance financial strength rating of Aa3 (outlook: stable) from Moody s Investors Service, Inc. ( Moody s ) and a claims paying ability of AA (outlook: negative) from Fitch Ratings Services ( Fitch ). The ratings of S&P, Moody s and Fitch reflect only the views of the applicable rating agency, respectively, do not constitute a recommendation to buy, sell or hold securities and are subject to revision or withdrawal at any time by such rating agencies. Any further explanation of any rating may be obtained only from the applicable rating agency. Any downward revision or withdrawal of any of the above ratings may have an adverse effect on the market price of the Series 2006 Bonds. The Insurer does not guarantee the market price or investment value of the Series 2006 Bonds nor does it guarantee that the rating on the Series 2006 Bonds will not be revised or withdrawn. The Insurer is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of the State of New York, its state of domicile. In addition, Radian and its insurance subsidiaries are subject to regulation by insurance laws of the various other jurisdictions in which they are licensed to do business. As a financial guaranty insurance corporation licensed to do business in the State of New York, the Insurer is subject to Article 69 of the New York Insurance Law which, among other things, limits the business of each financial guaranty insurer to financial guaranty insurance and related business lines, requires that each financial guaranty insurer maintain a minimum surplus to policyholders, establishes contingency, loss and unearned premium reserve requirements for each financial guaranty insurer, and limits the size of individual transactions and the volume of transactions that may be underwritten by each financial guaranty insurer. Other provisions of the New York Insurance Law, applicable to non-life insurance companies such as the Insurer regulate, among other things, permitted investments, payment of dividends, transactions with affiliates, mergers, consolidations, acquisitions or sales of assets and incurrence of liability for borrowings. Neither the Insurer nor any of its affiliates accepts any responsibility for the accuracy or completeness of, nor have they participated in the preparation of, this Official Statement or any information or disclosure that is provided to potential purchasers of the Series 2006 Bonds or omitted from such disclosure, other than with respect to the accuracy of information presented under the heading 13

20 FINANCIAL GUARANTY INSURANCE and as set forth in Appendix F of this Official Statement. The Insurer s role is limited to providing the coverage set forth in the Policy. In addition, the Insurer makes no representation regarding the Series 2006 Bonds or the advisability of purchasing the Series 2006 Bonds. Plan of Refunding PLAN OF REFUNDING AND APPLICATION OF SERIES 2006 BOND PROCEEDS The Authority has payment obligations currently secured under the 2002 Supplemental Indenture and a Promissory Note (the ODFA Payment Obligations ) in amounts sufficient to pay the principal of and interest on a series of revenue bonds issued on February 6, 2002, by The Oklahoma Development Finance Authority (the ODFA Bonds ) for the use and benefit of the Authority and the Hospital in the original aggregate principal amount of $28,010,000, and currently outstanding in the aggregate principal amount of $26,725,000, consisting of bonds maturing July 1 of each of the years 2008, 2009, 2014, 2021 and Proceeds of the Series 2006 Bonds, together with certain other available funds, will be applied to defease and discharge the Authority s ODFA Payment Obligations on the date of issuance of the Series 2006 Bonds. Proceeds of the Series 2006 Bonds and certain moneys held by the trustee for the ODFA Bonds will provide for the advance refunding and defeasance and discharge of the callable maturities of the ODFA Bonds aggregating $23,445,000 for redemption on July 1, 2012, at a redemption price of 102% of their principal amount plus interest accrued thereon to the redemption date and funds contributed by the Authority will be applied to defease and discharge the non-callable maturities aggregating $3,280,000 of the ODFA Bonds at par plus interest accrued thereon to the dates of their payment. In order to effect the defeasance and discharge of the ODFA Bonds, the Authority intends to deposit in escrow, pursuant to the Bond Indenture, moneys or Government Obligations sufficient to pay the principal of and interest on the ODFA Bonds to and including their scheduled maturity or July 1, 2012, redemption date. Such moneys or Government Obligations will be available only for the payment of the ODFA Bonds and will not be available for the payment of the Series 2006 Bonds. After the deposit of such moneys or Government Obligations, the Authority will be discharged from all ODFA Payment Obligations with respect to the ODFA Bonds. Proceeds of the Series 2006 Bonds also will be used to provide moneys to fund certain routine capital expenditures for the Hospital, fund certain debt service reserve fund requirements and pay certain costs of issuance of the Series 2006 Bonds. [Remainder of this page intentionally left blank] 14