Maturity Schedule $7,895,000 Serial 2006 Bonds

Transcription

1 NEW ISSUE BOOK-ENTRY ONLY RATING: S&P: BBB (See "Rating" herein) In the opinion of Bond Counsel, under current law and subject to conditions described in the section "TAX EXEMPTION," interest on the 2006 Bonds (a) will not be included in gross income for federal income tax purposes, (b) will not be an item of tax preference for purposes of the federal alternative minimum income tax imposed on individuals and corporations, and (c) will be exempt from income taxation by the Commonwealth of Virginia and any political subdivision thereof. Such interest may be included in the calculation of a corporation's alternative minimum income tax and a holder may be subject to other federal income tax consequences as described in the section "TAX EXEMPTION" $20,865,000 INDUSTRIAL DEVELOPMENT AUTHORITY OF THE TOWN OF AMHERST, VIRGINIA EDUCATIONAL FACILITIES REVENUE REFUNDING BONDS, SERIES 2006 SWEET BRIAR COLLEGE Dated: Date of Delivery Due: September 1, as shown below The Educational Facilities Revenue Refunding Bonds (Sweet Briar College), Series 2006 (the "2006 Bonds"), issued pursuant to an Indenture of Trust dated as of February 1, 2006, between Industrial Development Authority of the Town of Amherst, Virginia (the "Authority") and U.S. Bank National Association, as Trustee (the "Trustee"), will be limited obligations of the Authority, payable solely from and secured by an assignment of the payments received by the Authority under an unsecured promissory note of the College. Proceeds of the 2006 Bonds will be loaned by the Authority to Sweet Briar Institute, doing business as Sweet Briar College (the "College"), pursuant to a Loan Agreement dated as of February 1, 2006 (the "Loan Agreement"), between the Authority and the College, and used as described in the section "THE PLAN OF REFUNDING." Purchases of beneficial interests in the 2006 Bonds will be made in book-entry-only form, in denominations of $5,000 and integral multiples thereof. Interest will be payable on each March 1 and September 1, commencing on September 1, The 2006 Bonds are subject to optional and mandatory redemption, as described herein. Due Sentember Maturity Schedule $7,895,000 Serial 2006 Bonds Principal Interest Due Principal Interest Amount Rate Yield Sentember 1 Amoimi Rate $450, % 3.55% 2013 $625, % 490, , , , , , , , , , , $7,770, % Term 2006 Bonds due September 1, 2026, Yield 4.65%c $5,200, % Term 2006 Bonds due September 1, 2030, Yield 4.80% Yield 4.13% c 4.52 c Yield to the first call date. The 2006 Bonds do not constitute a debt or liability of the Town of Amherst or the Commonwealth of Virginia or of any agency or political subdivision thereof or pledge of the faith and credit of the Commonwealth of Virginia or from any agency or political subdivision, but shall be payable solely from the funds provided for by the Indenture. The 2006 Bonds are limited obligations of the Authority payable solely from amounts to be paid by the College under the Loan Agreement and certain funds held under the Indenture. The Authority has no taxing power. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The 2006 Bonds are offered when, as and if issued by the Authority and received by the Underwriter, subject to the approval of their validity by Edmunds & Williams, EC., Lynchburg, Virginia, Bond Counsel, as described herein, and to certain other conditions. Certain legal matters will be passed upon for the Authority by Edmunds & Williams, EC., for the College by Edmunds & Williams, EC., and for the Underwriter by Robinson, Bradshaw & Hinson, EA., Charlotte, North Carolina. Delivery of the 2006 Bonds is expected to be on or about February 23, 2006, through the facilities of DTC. February 10, 2006 WACHOVIA SECURITIES

2 In connection with this offering, the Underwriter may overallot or effect transactions that stabilize or maintain the market price of the 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. Neither the 2006 Bonds nor the Indenture have been registered with the Securities and Exchange Commission by reason of the provisions of Section 3(a)(2) of the Securities Act of 1933, as amended. Any registration or qualification of the 2006 Bonds and the Indenture in accordance with the applicable provisions of the securities laws of any jurisdictions in which the 2006 Bonds and the Indenture may be registered or qualified, and the exemption from registration or qualification in other jurisdictions, shall not be regarded as a recommendation thereof No dealer, broker, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Authority, the College or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor there be any sale of the 2006 Bonds by any person in any state in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the Authority, the College and other sources that are deemed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Underwriter. The information herein is subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Authority or the College since the date hereof The Authority neither has nor assumes any responsibility as to the accuracy or completeness of the information in this Official Statement, all of which, other than the information under the caption "THE AUTHORITY" and that portion of the information under the caption "LITIGATION" pertaining to the Authority, has been furnished by others. The Authority makes no representations hereunder whatsoever as to the creditworthiness of the College or the ability of the College to pay the principal of and interest on the 2006 Bonds.

3 TABLE OF CONTENTS Page INTRODUCTION... 1 THE AUTHORITY... 2 THE 2006 BONDS... 3 SECURITY FOR THE 2006 BONDS... 7 INVESTMENT CONSIDERATIONS... 7 THE COLLEGE THE PLAN OF REFUNDING ESTIMATED SOURCES AND USES OF FUNDS DEBT SERVICE REQUIREMENTS THE INDENTURE, THE LOAN AGREEMENT AND THE NOTE UNDERWRITING RATING TAX EXEMPTION LEGALITY LITIGATION CONTINUING DISCLOSURE FINANCIAL STATEMENTS MISCELLANEOUS Appendices: A B- C D- Information Regarding Sweet Briar College Audited Financial Statements of Sweet Briar Institute for the Fiscal Years Ended June 30, 2005 and 2004 Summaries of Certain Provisions of the Financing Instruments Form of Bond Counsel Opinion

4 [THIS PAGE INTENTIONALLY LEFf BLANK]

5 OFFICIAL STATEMENT relating to $20,865,000 INDUSTRIAL DEVELOPMENT AUTHORITY OF THE TOWN OF AMHERST, VIRGINIA Educational Facilities Revenue Refunding Bonds (Sweet Briar College), Series 2006 INTRODUCTION This Official Statement is provided by the Industrial Development Authority of the Town of Amherst, Virginia (the "Authority") to furnish information concerning its $20,865,000 Educational Facilities Revenue Refunding Bonds (Sweet Briar College), Series 2006 (the "2006 Bonds"), being offered hereby. This Introduction is qualified in its entirety by information found elsewhere in this Official Statement. This Official Statement speaks only as of its date and the information herein is subject to change. The 2006 Bonds are being issued in accordance with the Industrial Development and Revenue Bond Act, Chapter 49, Title 15.2, Code of Virginia of 1950, as amended (the "Act") pursuant to an Indenture of Trust dated as of February 1, 2006, (the "Indenture"), between the Authority and U.S. Bank National Association, Richmond, Virginia, as Trustee (the "Trustee"). The proceeds of the 2006 Bonds will be loaned to Sweet Briar Institute, a not-for-profit Virginia non-stock corporation doing business as Sweet Briar College (the "College"), pursuant to a Loan Agreement dated as of February 1, 2006, (the "Loan Agreement"), between the Authority and the College. As evidence of its obligations under the terms of the Loan Agreement, and in consideration for the loan, the College will issue its unsecured promissory note (the "Note"). The 2006 Bonds will be payable solely from payments by the College under the Note, which is assigned by the Authority to the Trustee. Brief descriptions of certain provisions of the Indenture, the Loan Agreement and the Note are set forth in the sections "SUMMARY OF INDENTURE," "SUMMARY OF LOAN AGREEMENT" and "SUMMARY OF NOTE" and in Appendix C hereto. The College The College is a private, women's liberal arts and sciences college founded in Its 3,250- acre campus is located in central Virginia about 50 miles south of Charlottesville, Virginia and about 165 miles southwest of Washington, D.C. For more information regarding the College, see "THE COLLEGE" herein and Appendix A hereto. Purpose Proceeds of the 2006 Bonds will be used to ( l) refund bonds previously issued by the Authority to finance and refinance capital improvements for the benefit of the College, and (2) pay certain expenses related to issuance of the 2006 Bonds. See the section "THE PLAN OF REFUNDING" and "ESTIMATED SOURCES AND USES OF FUNDS." I

6 The 2006 Bonds The 2006 Bonds will be dated their date of delivery, and will bear interest from their date payable on September 1, 2006, and semiannually thereafter on each March 1 and September 1, at the rates shown on the cover. Principal of the 2006 Bonds will be payable, subject to redemption, as described herein, on September 1 in the years and amounts shown on the cover. The 2006 Bonds are offered in denominations of $5,000 and integral multiples thereof. The 2006 Bonds will be subject to optional and mandatory redemption, as described herein. Security for the 2006 Bonds The 2006 Bonds will be limited obligations of the Authority payable solely from the payments made by the College under the Note and certain funds held under the Indenture. The amounts payable under the Note are designed to be sufficient to pay the principal of and interest on the 2006 Bonds as the same become due. The 2006 Bonds will not be secured by a mortgage or deed of trust on or a security interest in any property of the Authority or the College. The only source of payment for the 2006 Bonds is the payments made by the College under the Note, which is unsecured, and certain funds held under the Indenture. Tax Exemption Professionals See "TAX EXEMPTION" herein. Wachovia Securities, Charlotte, North Carolina (the "Underwriter"), is underwriting the 2006 Bonds. Edmunds & Williams, P.C., Lynchburg, Virginia, is serving as bond counsel, counsel to the Authority and counsel to the College. Robinson, Bradshaw & Hinson, P.A., Charlotte, North Carolina, is serving as counsel to the Underwriter. U.S. Bank National Association, Richmond, Virginia is serving as the Trustee. College Financial Statements The College's general purpose financial statements have been audited for each fiscal year through the fiscal year ended June 30, Copies of these financial statements, including audited financial statements containing the unqualified reports of the independent certified public accountants (as to the conformity of the financial statements to generally accepted accounting principles, as applicable, consistently applied) are available from the College at the Office of the Vice President for Finance & Administration, Box AN, Sweet Briar, Virginia THE AUTHORITY The Authority was created by ordinance adopted by the Town Council of the Town of Amherst, Virginia on March 12, 1969, readopted June 18, 1970, and amended on July 17, 2002, after notice duly published on June 1, 1970 and June 8, 1970 pursuant to the Act. The Authority is a political subdivision of the Commonwealth of Virginia, and is governed by six directors appointed by the Town Council of the Town of Amherst, Virginia. The Act empowers the Authority to acquire, improve and equip private accredited non-profit institutions of collegiate or graduate education to protect and promote the welfare, convenience and prosperity of the inhabitants of the Commonwealth of Virginia, to issue its bonds and notes for the purpose of carrying out any of its powers, to loan the proceeds from the issuance of such 2

7 bonds and notes in furtherance of the purposes of the Authority, to refund such bonds and notes, and to pledge the revenues and receipts from the leasing or sale of such facilities, or from any other source, to the payment of such bonds and notes. Pursuant to the Loan Agreement and the Indenture, the Authority will have no ongoing responsibility with respect to the facilities of the College or the security for the 2006 Bonds. All of the rights, privileges, duties and obligations of the Authority (except as expressly reserved in the Indenture) are assigned to the Trustee pursuant to the Indenture. The Authority has issued revenue obligations for various other projects. Each is payable from receipts and revenues derived by the Authority from the facility on behalf of which such bonds or notes were issued and is secured separately and distinctly from the issues for each other facility. The 2006 Bonds will be limited obligations of the Authority as described herein. The Authority has no taxing power. General THE 2006 BONDS The 2006 Bonds will be issued as registered bonds in denominations of $5,000 or any integral multiple thereof. The 2006 Bonds will be dated their date of delivery, will bear interest from their date initially payable on September 1, 2006 and thereafter semiannually on each March 1 and September 1, and will mature on September 1 in the years noted on the front cover hereof, subject to earlier redemption as described herein, at rates and amounts, all as set forth on the cover of this Official Statement. The principal of and the interest and redemption premium, if any, on the 2006 Bonds will be payable as described below under "--Book-Entry Only System." The 2006 Bonds initially will be issued as fully registered bonds, and shall be delivered to and registered in the name of Cede & Co., as registered owner and nominee for DTC. Purchases of beneficial interests in the 2006 Bonds will be made in book-entry-form, in denominations of $5,000. Purchasers will not receive certificates representing their beneficial ownership interest in the 2006 Bonds purchased. The principal of and interest on the 2006 Bonds will be paid by the Trustee to the registered owner thereof. As long as DTC or its nominee, Cede & Co., is the registered owner of the 2006 Bonds, such payments will be made directly to Cede & Co. See the subsection "--Book-Entry-Only System" below. Book-Entry-Only System The description which follows of the procedures and record keeping with respect to beneficial ownership interests in the 2006 Bonds, payments of principal, premium, if any, and interest on the 2006 Bonds to DTC, its nominee, Participants or Beneficial Owners (each as defined herein) confirmation and transfer of beneficial ownership interest in the 2006 Bonds and other bond-related transactions by and between DTC, Participants and Beneficial Owners is based solely on information furnished by DTC and is not, and should not be construed as, a representation by the Authority, the Underwriter, the Trustee, or the College as to its accuracy, completeness or otherwise. The Depository Trust Company, New York, New York ("DTC"), will act as securities depository for the 2006 Bonds. The 2006 Bonds will be issued as fully-registered 2006 Bonds 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. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE 2006 BONDS, AS DTC'S PARTNERSHIP NOMINEE, REFERENCE HEREIN TO THE OWNERS OR 3

8 REGISTERED OWNERS OF THE 2006 BONDS SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE 2006 BONDS. 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 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 17 A of the Securities Exchange Act of DTC holds and provides asset servicing for over two 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 tum, 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, as well as by the 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 securities brokers and dealers, banks and trust companies 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 and Purchases of the 2006 Bonds under the OTC system must be made by or through Direct Participants, which will receive a credit for the 2006 Bonds on DTC's records. The ownership interest of each actual purchaser of the 2006 Bonds ("Beneficial Owner") is in tum 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 Participants through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 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 physical certificates representing their ownership interests in the 2006 Bonds, except in the event that use of the book-entry system for the 2006 Bonds is discontinued. To facilitate subsequent transfers, all 2006 Bonds deposited by Direct Participants with DTC 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 the 2006 Bonds with DTC 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 2006 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts the 2006 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants are 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 of the 2006 Bonds will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the 2006 Bonds may 4

9 wish to take certain steps to augment transmission to them of notices of significant events with respect to the 2006 Bonds, such as redemptions, defaults and proposed amendments to the security documents. For example, Beneficial Owners of the 2006 Bonds may wish to ascertain that the nominee holding the 2006 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the 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 Agency 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 2006 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the 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 Agency or the Trustee on each 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 Participants and not of DTC, the Authority, the College or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Agency, the University and the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursements of such payments to the Beneficial Owners shall be the responsibility of the Direct and Indirect Participants. Redemption Optional Redemption. The 2006 Bonds maturing on or before September 1, 2016 are not subject to optional redemption. The 2006 Bonds maturing on or after September 1, 2017, are subject to redemption by the Authority at the direction of the College on or after September 1, 2016, in whole or in part on any Business Day at a redemption price equal to 100% of the principal amount of the 2006 Bonds to be redeemed plus interest accrued to the redemption date. Mandatory Redemption. The 2006 Bonds maturing on September 1, 2026, are required to be redeemed prior to maturity in part at a price of 100% of the principal amount thereof, plus interest accrued to the redemption date, on September 1 in years and amounts as follows: Year Amount $810, , , ,000 Year * Amount $ 990,000 1,040,000 1,095,000 1,150,000 *Final maturity 5

10 The 2006 Bonds maturing on September 1, 2030, are required to be redeemed prior to maturity in part at a price of 100% of the principal amount thereof, plus interest accrued to the redemption date, on September 1 in years and amounts as follows: Year Amount $1,210,000 1,265,000 Year * Amount $1,330,000 1,395,000 *Final maturity The Indenture provides for a credit against such redemption requirements for any Bonds that prior to any such redemption date have been purchased by the College and surrendered for cancellation and that previously have not been applied as a credit against any redemption requirement. Notice of Redemption. If any of the 2006 Bonds or portions thereof are called for redemption, the Trustee will send a notice of the call for redemption, identifying the 2006 Bonds or portions thereof to be redeemed, by registered or certified mail, not less than 30 nor more than 60 days prior to the redemption date, to the registered owner of each Bond to be redeemed at his address as it appears on the registration books kept by the Trustee. Notice having been given in accordance with the Indenture, failure of a Bondowner (which in the case of Bonds held in book entry form shall be the applicable securities depository or its nominee) to receive any such notice or any defect in a redemption notice shall not affect the redemption or the validity of the proceedings for the redemption of any of the 2006 Bonds with respect to which no such failure has occurred. Prior to mailing such notice, the Trustee will mail advance notice of such redemption to all registered national securities depositories then in the business of holding substantial amounts of obligations of types similar to the 2006 Bonds and to at least one national information service disseminating information concerning obligations like the 2006 Bonds. So long as Cede & Co., as nominee of DTC, is the registered owner of the 2006 Bonds, all notices of redemption will be sent only to Cede & Co. and delivery of notice of redemption to the DTC Participants, if any, is solely the responsibility of DTC (see the section "THE 2006 BONDS-Book Entry-Only System"). Interest will cease to accrue on Bonds called for redemption from and after the redemption date if sufficient money shall be held by the Trustee to pay the principal of and interest on the 2006 Bonds to be redeemed to the redemption date. Selection of 2006 Bonds to be Redeemed. If the 2006 Bonds are redeemed in part, the 2006 Bonds to be redeemed will be redeemed in such order as the College shall select and within the same maturity as selected by the securities depository pursuant to its rules and procedures or, if a book-entry system with respect to the 2006 Bonds is discontinued, the Trustee will select the 2006 Bonds to be redeemed by lot in such manner as the Trustee in its discretion may deem proper. Each authorized denomination of principal amount represented by any 2006 Bond will be considered a separate 2006 Bond for purposes of selecting the 2006 Bonds to be redeemed. If a 2006 Bond subject to redemption is in a denomination larger than the minimum denomination authorized under the Indenture, a portion of such 2006 Bonds may be redeemed, but only in a principal amount such that the unredeemed portion of such 2006 Bond is equal to a denomination authorized hereunder. For any 2006 Bonds in a denomination of more than the minimum authorized denomination, the Trustee shall treat each such 2006 Bond as representing a single 2006 Bond in the minimum authorized denomination plus that number of 2006 Bonds that is obtained by dividing the remaining principal amount of such 2006 Bond by the minimum authorized denomination. 6

11 Effect of Redemption. If 2006 Bonds have been duly called for redemption and notice of the redemption thereof has been duly given or provided for and if monies for the payment of the 2006 Bonds (or the principal amount thereof to be redeemed) and the premium, if any, and interest thereon to the date fixed for redemption are held by the Trustee, then the 2006 Bonds (or the principal amount of the 2006 Bonds called for redemption) will on the redemption date become due and payable and interest on the 2006 Bonds (or the principal amount thereof to be redeemed) will cease to accrue from the redemption date and the registered owner thereof shall thereafter have no rights under the Indenture as the registered owner of such Bonds (or the principal amount thereof to be redeemed) except to receive the principal amount there of and premium, if any, and interest thereon to the redemption date. Conditional Redemption. In the case of an optional redemption of 2006 Bonds, the redemption notice may state that ( 1) that it is conditioned upon the deposit of moneys by the College, in an amount equal to the amount necessary to effect the redemption, with the Bond Trustee no later than the scheduled redemption date or (2) the College retains the right to rescind such notice on or prior to the scheduled redemption date. Such notice and optional redemption shall be of no effect if such moneys are not deposited or if the notice is rescinded by instruction from the College to the Bond Trustee to do so. SECURITY FOR THE 2006 BONDS The 2006 Bonds will be limited obligations of the Authority payable solely from the payments made by the College under the Note and certain funds held under the Indenture. The amounts payable under the Note are designed to be sufficient to pay the principal of and interest on the 2006 Bonds as the same become due. The 2006 Bonds will not be secured by a mortgage or deed of trust on or a security interest in any property of the Authority or the College. The only source of payment for the 2006 Bonds is the payments made by the College under the Note, which is unsecured, and certain funds held under the Indenture. In addition, the Indenture does not restrict the College from incurring additional indebtedness. THE 2006 BONDS, THE PREMIUM, IF ANY, AND THE INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE COMMONWEALTH OF VIRGINIA OR OF ANY POLITICAL SUBDIVISION THEREOF. NEITHER THE COMMONWEALTH OF VIRGINIA NOR THE AUTHORITY SHALL BE OBLIGATED TO PAY THE PRINCIPAL AND PREMIUM, IF ANY, AND INTEREST ON THE 2006 BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES, RECEIPTS AND SECURITY PLEDGED THEREFOR, AND NEITHER THE FAITH AND THE CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF AND PREMIUM, IF ANY, AND INTEREST ON THE 2006 BONDS OR OTHER COSTS INCIDENT THERETO. THE AUTHORITY HAS NO TAXING POWER. INVESTMENT CONSIDERATIONS The ability of the Authority to make timely payments of principal and interest on the 2006 Bonds depends solely on the ability of the College to make timely payments of principal and interest on the Note issued pursuant to the Loan Agreement. The College expects that revenues derived from its ongoing operations, when taken together with other funds available to the College for such purposes, will be sufficient to make payments on the Note, and the College has covenanted under the Loan Agreement to make all such payments as and when the same become due. Nevertheless, any number of factors, both specific to the College and to colleges, universities or to the economy in general, may affect adversely the 7

12 College's ability to make timely payments on the Note. A few of those factors are outlined below. For more information on the College, see Appendix A hereto. Unsecured Obligation The College has not pledged any of its real or personal property, such as land, buildings, equipment or investments to secure payment of the 2006 Bonds. If the College defaults on the 2006 Bonds, the Trustee will not be able to cause the College to forfeit any of its land, buildings, equipment or investments. The College's campus consists of approximately 3,250 acres. The College acquired approximately 2,770 acres of the campus, including the area on which the administrative offices, dormitories, and certain academic facilities are located, under a will that prohibits the sale or other alienation of the property. Consequently, some of the College's real property may not be available for satisfaction of judgments against or other debts of the College. Dependence on Tuition Net tuition and fees are the largest revenue source for the College, representing approximately 32.5% of unrestricted revenues for the fiscal year ended June 30, Although the College has been able to demonstrate sufficient student demand for its academic programs at current tuition levels, there is no assurance the College will be able to maintain student demand at current and planned tuition levels. Dependence on Federal and State Funding A substantial portion of the College's revenues from tuition and fees is funded by federally guaranteed student loans, state guaranteed student loans and other government programs. Financial assistance is a significant factor in the decision of many students to attend a particular college or university. There is no assurance that these programs will continue to be available to the students of the College. A substantial change in the amount of such assistance could adversely affect the College's ability to make payments under the Loan Agreement. Investment Income A portion of the College's total revenues is derived from income earned on investments in the College's funds. Although the College believes its investments are prudently managed and has adopted policies to ensure the prudent management of its investments in the future, there can be no assurance that developments in the securities market will not have a material adverse effect on the market value of these investments and the income generated therefrom. Dependence on Fundraising The College has demonstrated its ability to raise funds from a variety of sources to finance its operations and capital development programs and to build the size of its endowment. Although the College plans to continue these efforts, there can be no assurance they will be successful. Such efforts may be affected adversely by a number of factors, including changes in general economic conditions and changes in tax law affecting the deductibility of charitable contributions. 8

13 Competition A key factor in maintaining the College's revenues is its ability to attract a sufficient number of qualified students and qualified faculty. The College competes with higher education institutions located in the Commonwealth of Virginia as well as institutions located around the nation, including publiclysupported institutions. The College expects to encounter competition in maintaining and expanding its recruiting base. In addition, attracting and retaining qualified faculty is essential to attracting qualified students and is dependent on the College's ability to offer competitive compensation and facilities constituting the working environment. No assurances can be given that the College will continue to attract sufficient numbers of qualified students or faculty so that the revenues will be sufficient to make payments under the Loan Agreement. Union Activity As of the date of this Official Statement, management of the College is not aware of any efforts by any labor union to organize its employees. Unionization of the College's employees could have an adverse effect on the College's financial condition. Additional Indebtedness The Indenture does not restrict the College's ability to incur additional indebtedness. Laws and Regulations The College is subject to a wide variety of federal, state and local environmental, health and safety laws and regulations. Educational operations are susceptible to the practical, financial and legal risks associated with compliance with such laws and regulations. As of the date of this Official Statement, the College is not aware of any pending or threatened claim, investigation or enforcement action regarding the environmental, health or safety issues which, if determined adversely to the College, would have material adverse consequences to the operations or financial conditions of the College. There can be no assurance given, however, that the College will not encounter environmental, health or safetyrelated risks in the future, and such risks may result in material adverse consequences to the operation or financial condition of the College. Cost and Availability of Insurance In recent years, the number of general liability suits and the dollar amounts of recoveries have increased nationwide, resulting in substantial increases in general liability insurance premiums. The College's insurance costs have increased over the past several years. In addition, the general liability insurance purchased by the College is subject to policy aggregate limitations. If such policy aggregate limitations are partially or fully exhausted in the future, or actual payments of claims materially exceed projected estimates of claims, the College's business, financial position, results of operations or cash flows could be materially adversely affected. The College self-insures its health insurance coverage and maintains excess loss policies for such coverage. The College funds its self-insurance program annually based upon actuarial estimates. These estimates are based on a number of factors, including amount and timing of historical payments, anticipated volume of services provided and discount rates for future cash flows. Changes in these factors resulting in increases in these estimates could adversely affect the College's financial results. 9

14 Enforcement of Remedies The remedies available to owners of the 2006 Bonds upon an event of default are in many respects dependent on judicial actions, which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including the United States Bankruptcy Code, the remedies specified in the Indenture and the Loan Agreement may not be readily available or may be limited. The various legal opinions to be delivered concurrently with delivery of the 2006 Bonds will be qualified as to the enforceability of various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors before or after such delivery. Tax-Exempt Status The College has received a letter from the Internal Revenue Service ("IRS") confirming its status as an organization exempt from taxation under Section 50l(c)(3) of the Internal Revenue Code. In order to maintain such status the College will be required to conduct its operations in a manner consistent with representations it previously made to the IRS. Loss of tax-exempt status would have a significant adverse effect on the College and its operations and could result in the inclusion of interest on the 2006 Bonds in income for federal tax purposes retroactive to the date of issue of the 2006 Bonds. See the section "TAX EXEMPTION" herein. In the Loan Agreement, the College has covenanted to maintain its status as a tax-exempt organization. THE COLLEGE The College is an organization exempt from federal taxation under Section 50l(c)(3) of the Internal Revenue Code. Attached as Appendix A to this Official Statement is a more complete description of the College and its operations. The College's audited financial statements for the fiscal years ended June 30, 2005 and 2004 are attached as Appendix B hereto. THE PLAN OF REFUNDING The Authority previously issued its Educational Facilities Revenue Bonds (Sweet Briar College), Series 1998A, 1998B, 1999, 2000, 2001 and 2002 (collectively, the "Prior Bonds") for the benefit of the College. On the date of delivery of the 2006 Bonds, a portion of the proceeds of the 2006 Bonds will be used to call the Prior Bonds consisting of the 2002 Bonds, of which $739, is currently outstanding. The 2002 Bonds will be called at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the redemption date. The remaining proceeds of the 2006 Bonds will be used to purchase direct obligations of the United States Government ("Escrowed Securities") that will be deposited in an Escrow Fund pursuant to the terms of an Escrow Deposit Agreement dated as of February 1, 2006 (the "Escrow Agreement"), among the College, the Authority and U.S. Bank National Association, in its capacity as the Escrow Agent. The Escrow Fund will be used to pay principal and interest on the Prior Bonds when due and the redemption price of the Prior Bonds on their respective redemption dates. Under the terms of the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal and interest on the Prior Bonds. 10

15 The Prior Bonds consisting of the 1998A Bonds, of which $3,746, is currently outstanding, will be called for redemption on September 1, 2010 at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the redemption date. The Prior Bonds consisting of the 1998B Bonds, of which $519, is currently outstanding, will be called for redemption on September l, 2008 at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the redemption date. The Prior Bonds consisting of the 1999 Bonds, of which $3,125, is currently outstanding, will be called for redemption on September 1, 2008 at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the redemption date. The Prior Bonds consisting of the 2000 Bonds, of which $8,254, is currently outstanding, will be called for redemption on September 1, 2010 at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the redemption date The Prior Bonds consisting of the 2001 Bonds, of which $3,485, is currently outstanding, will be called for redemption on September 1, 2011 at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon to the redemption date. McGladrey & Pullen, a nationally recognized accounting firm, will verify at the time of delivery of the 2006 Bonds to the Underwriter thereof the mathematical accuracy of the schedules that demonstrate the Escrowed Securities will mature and pay interest in such amounts which, together with uninvested funds, if any, in the Escrow Accounts, will be sufficient to pay, when due, the principal of and interest on the Prior Bonds until their redemption date, and upon such redemption date, the redemption prices for the Prior Bonds. Such maturing principal of and interest on the Escrowed Securities will not be available to pay the 2006 Bonds. See the section "VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS" herein. 11

16 ESTIMATED SOURCES AND USES OF FUNDS The College expects to use the proceeds derived from the sale of the 2006 Bonds approximately as follows: Estimated Sources of Funds Principal Amount of 2006 Bonds Net Original Issue Premium Total Sources $20,865, $ Estimated Uses of Funds Deposit to Escrow Fund 1 Refunding of 2002 Bonds Costs of Issuance 2 Total Uses $19,961, , ,192 $ Includes moneys to be used to refund the Prior Bonds consisting of the l 998A Bonds, the l 998B Bonds, the 1999 Bonds, the 2000 Bonds and the 2001 Bonds in advance of their maturities. 2 Includes various professional fees and other financing costs and the Underwriter's discount. 12

17 DEBT SERVICE REQUIREMENTS The following schedule sets forth for each fiscal year of the College ending June 30 the amount of principal (whether at maturity or pursuant to mandatory sinking fund redemption) and interest required to be paid with respect to the 2006 Bonds. The totals may not foot due to rounding. Fiscal Year Ending June 30 Principal Interest Total 2007 $450,000 $973,854 $1,423, , ,688 1,423, , ,688 1,423, , ,788 1,427, , ,988 1,425, , ,288 1,428, , ,688 1,424, , ,188 1,425, , ,688 1,424, , ,663 1,427, , ,656 1,423, , ,025 1,427, , ,938 1,427, , ,250 1,425, , ,750 1,423, , ,125 1,425, , ,250 1,424, , ,000 1,426, ,040, ,250 1,425, ,095, ,875 1,426, ,150, ,750 1,425, ,210, ,263 1,428, ,265, ,481 1,424, ,330,000 97,850 1,427, ,395,000 33,131 1,428,131 Total $20,865,000 $14,780,110 ~35,645,110 The College does not have any indebtedness currently outstanding other than the Prior Bonds, which will be refunded in advance of their maturities with proceeds of the 2006 Bonds, as described herein under the section "THE PLAN OF REFUNDING." 13

18 THE INDENTURE, THE LOAN AGREEMENT AND THE NOTE Attached as Appendix C is a summary of the Indenture, the Loan Agreement and the Note. Reference is made to Appendix C and to the underlying documents summarized therein for a more complete description of the form thereof related to the 2006 Bonds. Among other provisions, those documents provide the following: Assignment and Pledge As security for the payment of the principal of and premium, if any, and interest on the 2006 Bonds, the Indenture assigns and pledges to the Trustee the Note, all rights of the Authority under the Loan Agreement, except for certain rights to payment of expenses and indemnification and receipt of notices, and the funds held by the Trustee pursuant to the Indenture. Provisions for Bonds The Indenture makes provisions for the issuance of the 2006 Bonds and all other terms pertaining to the 2006 Bonds as described in the section "THE 2006 BONDS." Under the Indenture, there is no limit on the amount of additional debt, parity or otherwise, that may be issued. Agreement To Issue Bonds and To Make Loan In the Loan Agreement the Authority agrees to issue the 2006 Bonds and to loan the proceeds thereof to the College; the College agrees to accept such loan. Amounts Payable In the Loan Agreement the College agrees to (1) make all payments required under the Note as and when the same become due, and (2) pay the fees of the Trustee and the reasonable expenses of the Trustee and the Authority incurred in connection with the 2006 Bonds. Additional Covenants Pursuant to the Loan Agreement, among other provisions, the College will covenant not to take any action or fail to take any action that would adversely affect the exclusion of interest on the 2006 Bonds from gross income for federal income tax purposes. Note Provisions The Note is an unsecured obligation of the College. The Note provides for payments of principal in amounts sufficient to pay principal of the 2006 Bonds as they become due, whether at maturity, call for redemption or otherwise. The Note also provides for semiannual payments of interest in amounts sufficient to pay interest on the 2006 Bonds as the same become due. The College has the option to prepay the Note by complying with the requirements for optional redemption of the 2006 Bonds or by paying to the Trustee cash or noncallable direct obligations or certificates of the United States of America the principal of and interest on which will be sufficient to redeem the 2006 Bonds, all as more fully set forth in the Loan Agreement. 14

19 UNDERWRITING The Underwriter has entered into a Bond Purchase Agreement to purchase the 2006 Bonds, subject to certain conditions, at a purchase price $20,851, (representing the $20,865, aggregate principal amount of the 2006 Bonds less an Underwriter's discount of $189, plus net original issue premium of $176, ). Wachovia Securities is the trade name under which Wachovia Corporation conducts its investment banking, capital markets and institutional securities business through Wachovia Capital Markets, LLC, member NYSE, NASD, SIPC and through other bank, non-bank and broker-dealer subsidiaries of Wachovia Corporation, including Wachovia Bank, National Association. The Underwriter has agreed to make a public offering of all of the 2006 Bonds. The prices and other terms respecting the offering and sale of the 2006 Bonds may be changed from time to time by the Underwriter after the 2006 Bonds are released for sale, and the 2006 Bonds may be offered and sold at prices lower than such initial public offering prices, including sales to dealers who may sell the 2006 Bonds into investment accounts. VERIFICATION OF ARITHMETICAL AND MATHEMATICAL COMPUTATIONS The arithmetical accuracy of certain computations included in the schedules provided by the Underwriter on behalf of the Authority and the College relating to (1) computation of forcasted receipts of principal and interest on the Escrowed Securities and the forecasted payments of principal and interest to redeem the Prior Bonds and (2) computation of the yields of the 2006 Bonds and the restricted Escrowed Securities were verified by McGladrey & Pullen, LLP, certified public accountants. Such computations were based solely on assumptions and information supplied by the Underwriter on behalf of the Authority and the College. McGladrey & Pullen, LLP has restricted its procedures to verifying the arithmetical accuracy of certain computations and has not made any study or evaluation of the assumptions and information on which the computations are based and, accordingly, has not expressed an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome. RATING Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. ("S&P"), has assigned the 2006 Bonds a rating of "BBB." The College requested that the 2006 Bonds be rated and furnished certain information to S&P, including certain information that may not be included in this Official Statement. Further explanation of the significance of such ratings may be obtained from S&P. This rating is not a recommendation to buy, sell or hold the 2006 Bonds. The rating is subject to review and change or withdrawal at any time if, in the judgment of S&P, circumstances so warrant. There is no assurance that the rating will continue for any period of time or that it will not be revised or withdrawn. A downward revision or withdrawal of the rating may have an adverse effect on the market price of the 2006 Bonds. None of the Authority, the Underwriter, or the College has undertaken any responsibility after issuance of the 2006 Bonds to assure maintenance of the rating, to bring to the attention of owners of the 2006 Bonds any proposed revision to or withdrawal of such rating, or to oppose any such revision or withdrawal. 15

20 TAX EXEMPTION Opinion of Bond Counsel In the opinion of Bond Counsel, under current law, interest, including accrued original issue discount ("OID"), on the 2006 Bonds, (a) will not be included in gross income for federal income tax purposes, and (b) will not be an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes) subject to the alternative minimum income tax, such interest (including accrued OID) is taken into account in determining adjusted current earnings for purposes of computing such tax, and ( c) will be exempt from income taxation by the Commonwealth of Virginia and any political subdivision thereof. Except as discussed below regarding OID, no other opinion will be expressed by Bond Counsel regarding the tax consequences of the ownership of or the receipt or accrual of interest on the 2006 Bonds, or (ii) the exclusion from gross income of interest on any 2006 Bonds. Bond Counsel's opinion will be given in reliance on certifications by representatives of the Authority, the Town and County of Amherst, Virginia, and the College as to certain facts material to both the opinion and the requirements of the Code, and is subject to the condition that there is compliance subsequent to the issuance of the 2006 Bonds with all requirements of the Code that must be satisfied in order for interest thereon to remain excludable from gross income for federal income tax purposes. The Authority and the College have covenanted to comply with current provisions of the Code regarding, among other matters, maintenance of the College's status as an organization exempt from taxation under Section 50l(c)(3) of the Code, the use, expenditure and investment of the proceeds of the 2006 Bonds, the use of the College's facilities and the timely payment to the United States of any arbitrage rebate amounts with respect to the 2006 Bonds. Failure by the Authority or the College to comply with such covenants, among other things, could cause interest, including OID, on the 2006 Bonds to be included in gross income for federal income tax purposes retroactively to their date of issue. Bond Counsel's opinion represents its legal judgment based in part upon the representations and covenants of the College and its review of existing law, but are not a guarantee of result or binding on the IRS or the courts. Bond Counsel assumes no duty to update or supplement its opinions to reflect any facts or circumstances that may thereafter come to its attention or to reflect any changes in law or the interpretation thereof that may thereafter become effective. Original Issue Premium The 2006 Bonds maturing on September 1 in the years 2006 through 2011, inclusive, 2017 and 2026, have been sold at initial public offering prices which are in excess of the amount payable at maturity (the "Premium Bonds"). The amount equal to the excess, if any, of the purchase price paid (excluding any accrued interest) by the first owner of any Premium Bond over its stated redemption price at maturity constitutes original issue premium on such Premium Bond. A purchaser of a Premium Bond must amortize any original issue premium over such Premium Bond's term using constant yield principles, based on the Premium Bond's yield to maturity to such owner. As original issue premium is amortized, such owner's basis in such Premium Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to such owner. Such treatment will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of such Premium Bond prior to its maturity. Even though such owner's basis in such Premium Bond is reduced, no federal income tax deduction is allowed. Purchasers of any 2006 Bond at a premium, whether at the time of initial issuance or subsequent thereto, should consult their own tax advisors with respect to the determination and treatment of premium 16