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HomeMy WebLinkAboutResolution No. 283-18 - Mayo Clinic Bond Issuance for remarketing of conduit revenue bonds RESOLUTION NO. RESOLUTION GIVING APPROVAL TO THE ISSUANCE AND REMARKETING OF REVENUE BONDS PURSUANT TO MINNESOTA STATUTES, SECTION 469.152 THROUGH 469.165 ON BEHALF OF MAYO CLINIC AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota (the “City”), as follows: Section 1. Recitals and Findings. Pursuant to Minnesota Statutes, Sections 469.152 through 469.165 (the “Act”) and a Trust Indenture dated as of December 1, 1987, as amended (as amended through the date hereof, the “Original Indenture”), between the City and Wells Fargo Bank, National Association (successor to Norwest Bank Minnesota, National Association), as Trustee (the “Trustee”), the City provided for the issuance from time to time of revenue bonds of the City (as defined in the Original Indenture, the “Bonds”) on behalf of Mayo Clinic, a Minnesota nonprofit corporation (the “Corporation”), and certain affiliates. By a Loan Agreement dated as of December 1, 1987, as amended and restated by an Amended and Restated Loan Agreement dated as of May 2, 1998 and as amended to the date hereof (the “Original Loan Agreement”), between the City and the Corporation and its affiliates, the City agreed to lend the proceeds of each series of the Bonds, when and if issued, to the Corporation and its affiliates. The Corporation has requested that the City issue its Bonds, in one or more series, in an approximate principal amount of $200,000,000 (the “Series 2018A Bonds”) pursuant to the Act to pay (i) costs of issuance of the Series 2018A Bonds, and (ii) the costs of capital projects involving renovations, acquisition of equipment and construction at the Corporation facilities in the City including Mayo Clinic buildings at or near 200 First Street SW; Mayo Clinic Hospital - Rochester at 201 West Center Street, nd and Mayo Clinic Hospital - Rochester located at the 1200 to 1400 block of 2 Street SW in the City, including the Saint Marys modernization and growth plan, consisting of expansion of the Generose building, operating room capacity, renovation and expansion of the neonatal and pediatric intensive care units, increase in ICU beds and other improvements and equipment purchases (collectively, the “Project”). At a public hearing, duly noticed and held on December 18, 2017, in accordance with the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, on the proposal to finance the Project, all parties who appeared at the hearing were given an opportunity to express their views with respect to the financing, and interested persons were given the opportunity to submit written comments to the City Clerk before the time of the hearing. By resolution adopted December 18, 2017, the City approved the issuance of the Series 2018A Bonds and the Project, subject to approval of the Project by the Minnesota Department of Employment and Economic Development, which approval was received and dated January 25, 2018. Drafts of the following documents relating to the Series 2018A Bonds have now been presented to the Common Council and shall be filed in the office of the City Clerk: (a) a Twentieth Supplemental Indenture (the “Twentieth Supplemental Indenture;” the Original Indenture as so amended, the “Indenture”) to be entered into between the City and the Trustee, whereby the Series 2018A Bonds, denominated “Health Care Facilities Revenue Bonds (Mayo Clinic), Series 2018A” are created and their terms, conditions and forms established; (b) an Amendment No. 21 to the Original Loan Agreement (“Amendment No. 21;” the Original Loan Agreement as so amended, the “Loan Agreement”), to be entered into between the City and the Corporation, whereby the City agrees to lend the proceeds of the Series 2018A Bonds to the Corporation and the Corporation agrees to repay the loan from the City and all costs and expenses of the City in connection with the issuance and sale of the Series 2018A Bonds; (c) a Bond Purchase Agreement (the “Bond Purchase Agreement”), to be entered into between the City, the Corporation and the underwriter or underwriters named therein (the “Underwriter”), which provides for the sale by the City and the purchase by the Underwriter of the Series 2018A Bonds; and (d) an Official Statement relating to the Series 2018A Bonds (the “Official Statement”). The Twentieth Supplemental Indenture, Amendment No. 21 and the Bond Purchase Agreement are collectively called the “Bond Documents.” The Bond Documents are hereby made a part of this Resolution as fully as though set forth in full herein. The Corporation has further requested that the City authorize the remarketing of all or a portion of its Health Care Facilities Revenue Bonds (Mayo Clinic), Series 2011, expected to be in an amount not greater than $150,000,000 (the “Remarketed Bonds”) pursuant to one or more preliminary reoffering circulars, final reoffering circulars or otherwise-designated offering documents (whether one or more, the “Reoffering Circular”) and enter into certain amendments to the Original Indenture and Original Loan Agreement, if necessary in connection with such remarketing, which amendments shall become effective with respect to any of the Remarketed Bonds upon satisfaction of the conditions described in such amendments. The Remarketed Bonds do not constitute an indebtedness, a pecuniary liability, a moral or general obligation, a loan of the credit of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues specifically pledged to the payment thereof, and each Remarketed Bond, when, as and if remarketed, shall recite in substance that such Remarketed Bond, including interest 2 thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt or pecuniary liability of the City. Section 2. Authorization of the Series 2018A Bonds; Remarketing of the Remarketed Bonds and Approval and Execution of Documents. The City hereby approves the issuance of the Series 2018A Bonds under the Act and the Indenture, the sale thereof to the Underwriter in accordance with the Bond Purchase Agreement, and the loan of the proceeds of the Series 2018A Bonds to the Corporation in accordance with the Loan Agreement. The forms and the execution and the delivery of the Bond Documents submitted to this Council are hereby approved, with such additions or modifications thereto and deletions therefrom as may be approved by the Mayor and the City Clerk prior to the execution and delivery thereof and subject to the review and comment of the City’s special issuer’s counsel for the Series 2018A Bonds, Kennedy and Graven, Chartered, the approval thereof to be conclusively evidenced by the execution and delivery of the Bond Documents by the appropriate officers of the City. The City recognizes that as of the date of adoption of this Resolution the detailed terms of the Series 2018A Bonds are not finally resolved, and consequently when issued the Series 2018A Bonds may be in fewer or more series than the forms of Bond Documents currently provide, and will bear interest at rates not yet determined, but the Series 2018A Bonds to be issued shall be issued in the approximate principal amount of $200,000,000, the price at which the Series 2018A Bonds are sold to the Underwriter shall not be less than 98% of their principal amount (exclusive of any “original issue discount”), and the interest rate on the Series 2018A Bonds shall not exceed 6% per annum, and shall be set forth in the Twentieth Supplemental Indenture, as finally executed. The Series 2018A Bonds are expected to mature no later than 40 years from the date of issuance thereof. The Mayor and the City Clerk are hereby authorized in their discretion at such time, if any, as they may deem appropriate, to execute and deliver the Bond Documents in the name and on behalf of the City, following the review and comment of the City’s special issuer’s counsel for the Series 2018A Bonds. The City hereby consents to the preparation and distribution by the Corporation and the Underwriter of the Official Statement and, if necessary, a Preliminary Official Statement (together, the “Official Statement”). The City has not participated in the preparation of or reviewed, and will not participate in the preparation or review of the Official Statement and has not made and will not make any independent investigation of the facts and statements provided therein; accordingly, the City assumes no responsibility with respect thereto, including without limitation as to matters relating to the accuracy, completeness or sufficiency of the Official Statement. The Mayor, the City Clerk and the other officers of the City are hereby authorized to prepare and furnish to Bond Counsel certified copies of all proceedings and records of the City relating to the Series 2018A Bonds and such other affidavits and 3 certificates as may be required to show the facts relating to the Series 2018A Bonds as such facts appear in the books and records in the officers’ custody and control or as otherwise known to them. All such certified copies, affidavits and certificates, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. The Series 2018A Bonds shall not constitute an indebtedness, a pecuniary liability, a moral or general obligation, a loan of the credit of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues specifically pledged to the payment thereof, and each Series 2018A Bond, when, as and if issued, shall recite in substance that such Series 2018A Bond, including interest thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt or pecuniary liability of the City. On the basis of the information given to the City to date, it appears that it would be desirable for the City to authorize the remarketing of the Remarketed Bonds and the execution of any related documents. The City hereby approves the remarketing of the Remarketed Bonds and the execution of such amendments to the Original Indenture and Original Loan Agreement. The City hereby consents to the preparation and distribution by the Corporation and the remarketing agents of a Reoffering Circular for the Remarketed Bonds. The City has not made and will not make any independent investigation of the facts and statements provided in the Reoffering Circular and makes no representations or warranties with respect to the information set forth therein; accordingly, the City assumes no responsibility with respect thereto, including without limitation as to matters relating to the accuracy, completeness or sufficiency of the Reoffering Circular. The Mayor, the City Clerk and the other officers of the City are hereby authorized to prepare and furnish to the remarketing agents and to bond counsel certified copies of all proceedings and records of the City relating to the Remarketed Bonds and such other affidavits and certificates as may be required to show the facts relating to the Remarketed Bonds as such facts appear in the books and records in the officers’ custody and control or as otherwise known to them. All such certified copies, affidavits and certificates, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. The remarketing of the Remarketed Bonds in the form and upon the terms set forth in the Indenture is hereby authorized. The Mayor and the City Clerk are hereby authorized in their discretion at such time, if any, as they may deem appropriate, to execute the Remarketed Bonds by manual or facsimile signatures as prescribed in the Indenture, to deliver the Remarketed Bonds to the Trustee or an authenticating agent for authentication and delivery thereof to the Underwriters, and to deliver to the Trustee a certified copy of this Resolution and all other documents required by the Indenture in order to accomplish the remarketing of the Remarketed Bonds, including any supplement to the indenture or loan agreement therefor. 4 In the absence of the Mayor or the City Clerk, any of the documents authorized by this Resolution to be executed and delivered may be executed and delivered by the acting or deputy Mayor or City Clerk, respectively. This Resolution shall be effective immediately upon its adoption. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2018. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2018. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota) 5