CR 94-42 Refunding Rev St. Therese
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March, 3, 1994 -Y 0 ~ ".:> CR 94-42
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REFUNDING REVENUE BOND
ST. THERESE CARE CENTER PROJECT
Proposed Action.
Staff recommends approval of the following action: Approval of
Resolution No. 94-22 authorizinq issuance. sale and delivery of
Elderly Housing Revenue Refunding Bonds (st. Therese Southwest. Inc.
Project) series 1994A; and subordinated Elderly Housinq Revenue
Refunding Bonds (st. Therese Southwest. Inc. project) Series 1994B and
Series 1994C. which bonds. the interest and any premium thereon shall
be payable solely from revenues pledged thereto: approving the form of
and authorizing the execution and delivery of the indentures of trust
and other related documents: approvinq the form of and authorizinq the
execution and delivery of the bonds: providinq for the security.
riqhts and remedies of the owners of said bonds in connection with the
st. Therese Housing proiect under Minnesota statutes Chapter 462C.
With approval of this action, the actual sale of the bonds will be
able to be completed.
overview
In 19S6 the City of Hopkins approved the sale of a $15,000,000 revenue
bond to assist in the development of the st. Therese Elderly Housing
Project in south Hopkins. In 1990 the st. Therese Project filed for
4It bankruptcy after defaulting on its loan.
st. Therese is now proposing to have the city, on behalf of st.
Therese, sell a new bond to refund the existing bond. Bondholders as
a result of this sale will be paid a portion of their original
investment based on a Bankruptcy Court plan of reorganization. The
amount of the proposed bond sale is $11,090,000.
Late last year the City council held a public hearing concerning this
matter and approved Resolution No. 93-134 giving preliminary approval
to the issuance of the subject bonds. The item presently under
consideration would be the final public action necessary prior to the
bond sale.
Primary Issues to Consider
o What is the purpose of this type of financing?
o What are the implications to the City as relates to this action?
o Does the project meet the requirements of the city's policy as
relates to taxable/tax exempt financing?
supporting Documents
o Letter from Miller Schroeder
o Offeripg statement
o Resolution No. 94-22
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Jame~ D.
Planning Development Director
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HRA 94-42
e Backqround
In 1986 the City of Hopkins issued $15,000,000 to facilitate the
construction of the st. Therese Care Center located in southwest
Hopkins. This building contains 227 units of senior rental housing.
Due to low occupancy rates in the first three years of operation, St.
Therese was unable to generate sufficient revenues to make payments on
its loan. As a result of a Bankruptcy Court plan of reorganization
the corporation which owns the st. Therese project is now proposing to
have the city sell a new tax exempt bond issue. Proceeds from this
issue will then be used to pay existing bond holders a portion of the
funds they originally invested based upon the reorganization plan.
Primary Issues to Consider
0 What is the purpose of this type of financing?
Local units of government are authorized to issue tax exempt
revenue bonds in order to facilitate projects which it is felt
would be beneficial to the community. In order to utilize this
type of financing tool the applicant needs to meet very specific
Federal requirements. This bond financing is for the most part
only available for certain types of industrial or housing
projects.
. Because the bonds as proposed for use in the subject transaction
are tax exempt the interest rate on the funds secured as a result
of the sale are lower than what would be available through
conventional financing. This helps to make the project more
~financially feasible."
0 Does the project meet the requirements of the City policy as
relates to taxable/tax exempt financing?
The City of Hopkins adopted a policy as relates revenue bond
financing in 1991. The approval criteria within this policy for
the most part relates to new construction projects.
At the time that the original bond was sold for the st. Therese
project was considered the City did not have an application
process or policy as relates to revenue bond financing. It is
assumed that the staff and City Council as part of the hearing
process at that time felt sufficiently comfortable that the
project which was proposed to be undertaken was beneficial to the
community and therefore approved the bond sale. The action on
this matter presently under consideration has no impact on this
project which was constructed as a result of the 1986 action by
the City Council.
. 0 ~hat are the implications to the City as relates to this action?
The action presently being requested is the final city approval
of the bond sale. Stephanie Galey of Holmes and Graven,
HRA 94-42
. representing the city of Hopkins, has reviewed the Bond documents
and found them acceptable.
As a result of this bond sale and subsequent refunding of the
1986 bond the applicant will accomplish the following:
- Reduce their interest rate on the debt
- Provide a payment to the existing landholders per a
reorganization plan as detailed in a bankruptcy court
settlement.
These bonds and all such revenue bonds are secured by a pledge of
repayment strictly from the company for the city is selling the
bonds. The city is not liable to make any payments should there
be a default. In essence the City only is acting as a
facilitation insider to secure the tax exemption on the bond.
Even though the City is not liable for any payment it is
important that staff and the Council feels there are sufficient
revenues available from the company to make the required
payments. As relates to this issue, staff has been informed the
applicant is securing an insurance policy to guarantee repayment
of the largest of the three series of bonds which accounts for
approximately 75% of the total issue. This will insure adequate
repayment is available for the majority of the bonds.
. The two smaller issues (approximately $2,500,000) are subordinate
to the series A bonds and are not guaranteed. However, the
Underwriter, Miller Schroeder, has reviewed the project financial
statements and feel there should be sufficient revenues to
provide for payment of debt service. Also, the buyers of the two
subordinated bonds, Series Band C, will be informed of the
riskier nature of these instruments in the offering statement.
Alternatives
City Council has the following alternatives regarding this issue:
0 Approve the action as recommended by staff. This will allow
for the sale of the bonds as proposed.
0 Deny approval for the sale of the bonds. Under this action
the Council needs to detail the reason for denial. From a
legal standpoint this matter should be discussed with the
city Attorney prior to undertaking such action.
0 Continue for additional information. It should be noted
that based on the Bankruptcy Court plan of reorganization
the bond sale will need to be completed in the near future.
Any continuance should be discussed with the applicant to
. insure that it is workable within their timetable.
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RESOLUTION
of the
CITY OF HOPKINS
RESOLUTION NO. 94-22
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOPKINS,
MINNESOTA (THE "ISSUER") AUTHORIZING THE ISSUANCE, SALE
AND DELIVERY OF THE ISSUER'S: (i) ELDERLY HOUSING REVENUE
REFUNDING BONDS (ST. THERESE SOUTHWEST, INC. PROJECT),
SERIES 1994A (THE "SERIES 1994A BONDS"); (11) SUBORDINATED
ELDERLY HOUSING REVENUE REFUNDING BONDS (ST. THERESE
SOUTHWEST, INC. PROJECT) SERIES 1994B (THE "SERIES 1994B
BONDSn); AND (ill) SUBORDINATED ELDERLY HOUSING REVENUE
REFUNDING BONDS (ST. THERESE SOUTHWEST, INC. PROJECT)
SERIES 1994C (THE "SERIES 1994C BONDS) (COLLECTIVELY, THE
"BONDStt), WHICH BoNDS AND THE INTEREST AND ANY PREMIUM
THEREON SHALL BE PAYABLE SOLELY FROM REVENUES PLEDGED
THERETO; APPROVING THE FORM OF AND AUTHORIZING THE
. EXECUTION AND DELIVERY OF THE INDENTURES OF TRUST AND
OTHER RELATED DOCUMENTS; APPROVING THE FORM OF AND
AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS j
PROVIDING FOR THE SECURITY, RIGHTS AND REMEDIES OF THE
OwNERS OF SAID BONDS
WHEREAS, the City of Hopkins, Minnesota (the "Issuer") i& a municipal
corporation and political subdivision duly organized and existing under tbe
Constitution and laws of the State of Minnesota; and
WHEREAS, pursuaILt to Minnesota Statutes, Chapter 462C (the "Actn), the
Issuer is authorized and empowered to make loans for the purpose of financing the
acquisition, construction, improvement or equipping of certain multifamily housing
developments (as defined in the Act), to acquire and hold obligations as described
in the Act to cat'ry out any of its purposes and to issu.e bonds for the purpose of
carrying out any of its powers including refunding bonds previously issued for such
purpose; and
WHEREAS 1 pursuant to an Indenture of Trust dated as of September 1) 1986
(the t1prior Indenture") between the Issuer and Norwest Bank Minnesota, National
Association, as trustee under the Prior Indenture (the "Prior Trustee"), the Issuer
issued $15,000,000 in original principal amount of its Elderly Housing Revenue Bonds
(St. Therese Ca;rte Center, Inc., Hopkins, Minnesota Project) Series 1986 (the "PriOl"
Bonds") to finance the acquisition, construction, improvesnent and equippinr; of a
multifamily hou.sing development (the "Project") by St. Therese Southwe5t, Inc.)
. a Minnesota nonprofit corporation (the "Borrower"); and
WHEREAS, the Borrower has requested that the Issuer issue bonds the
proceeds of which will be used, among other things, to refund and discharge the
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. Prior Bonds iSGued to finance the acquisition) renovation) improvement and
equipping of the Project; and
WHEREAS, the Issuer deems it desirable and in keeping with its purposes to
issue its (i) Eld.erly Housing Revenue Refunding Bonds (St. Therese Southwest,
Inc. Project) Series 1994A in the approximate principal e.mount not to exceed
$8,500,000 (the "Series 1994A Bonds"), (ii) Subordinated Eld.erly Housing Revenue
Refunding Bonds (St. Therese Southwest, Inc. Project) Series 1994B in the
approximate principal amount not to exceed $1,620,000 (the "Series 1994B Bonds"),
and (iii) Subordinated Elderly Housing Revenue Refunding Bonds (St. Therese
Southwest, Inc. Project) Series 1994C in the approximate principal amount not to
exceed $970,000 (the ItSeries 1994C Bonds") (collectively, the Series 1994A Bondst
the Series 1994B Bonds and the Series 1994C Bonds are referred to herein the
"Bonds"), for the purposes of providing pI'eceeds to the Borrower, the proceeds of
which will be used, among other things, to refund and discharge the Prior Bonds
issued to finance the acquisition>> construction, improvement and equipping of the
Project; and
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WHEREAS, the funds to refund the Prior Bonds will be loaned to the Borrower
pursuant to the terms of: (i) a Loan Agreement (the ttLoan Agreementtf) to be
entered into between the Issuer and the Borrower in which the Borrower will agi'ee
to make monthly payments to pay when due all scheduled principal of and interest on
the Series 1994A Bonds, and (il) a Subordinate Loan Agreement (the ttSubordinate
Loan Agreement't) to be entered into between the Issuer and the Borrower in which
. the Borrower wt11 agree to make monthly payments to pay when due all scheduled
principal of and interest on the Series 1994B Bonds and the Series 1994C Bonds
(together, the "Subordinate Bonds"); and
WHEREAS ~ the Issuer proposes to finance the refunding of the Prior Bonds
under the Act by the issuance of the Bonds of the Issuer under this :resolution;
WHEREAS, the Series 1994A Bonds will be issued under a Trust Indenture (the
"Indenture") to be entered into between the Issuer and United StateS Trust Company
of New York (the "Tru.stee1t) ~ and are secured by a pledge and assignment of certain
revenues1n accordance with the terms of the Indenture t and the Series 1994A BOhds
and the interest on the Serles 1994A Bonds shall be payable solely from. the revenues
pledged. therefor and the Series 1994A Bond.s shall not constitute a debt of the Issuer
within the meaning of any constitutional or statutory limitation or constitute or give
rise to a pecunia.ry liability of the Issuer or a charge against its general credit or
taxing powers and shall not constitute a. charge, lien, or encumbrance, legal or
equitable) upon any property of the Issuer other than the Issuel"s interest in the
Loan Agreement;
WHEREAS, the Subo:t'dinate Bonds will be issued undet- a Subordinate Trust
Indentu.re (the "Subordinate Indenture") to be entered into between the Issuer and
the Trustoo) and are secured by a pledge and assignment of certain revenues in
accordance with the terms of the Subordinate Indenture) and the Subordinate Bonds
and the interest on the Subol1dinate Bonds shall be payable solely from the revenuelli
pledged therefor and the Subordinate Bonds shall not constitute a debt of the Issuer
. within the meaning of any constitutional or statutory 1im1tation or constitute or give
rise to a pecuniary liability of the Issuer or a charge against its general credit or
taxing powers and shall not constitute a charge~ lien) or encumbrance) le~ or-
equitable, upon any property of the Issuer other than the Issuer's interest in the
Subo't'dinate Loan Agregtnent;
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. WHEREAS, forms of the following documents (including the exhibits referred.
to the-rein) have been submitted to the Issuer:
(a) The Indenture, dated as of March 1, 1994, by and between the
IsslJ.er and Trustee, providing for the issuance of the Series 1994A Bonds,
prescribing the form thereof, pled~ the trust est&te described therein for
the security of the Series 1994A Bonds, and setting forth proposed recitals,
covenants and agreement5 by the parties with respect thereto;
(b) The Subordinate Indenture, dated as of March 1.. 1994, by and.
between the Issuer and Trustee.. providing for the issuance of the
Subordinate Bonds, prescribing the form thereof, pledging the trust estate
described therein for the security of the Subordinate Bonds, and setting forth
proposed recitals, covenants and agreements by the parties with respect
thereto;
(e) The Loan Agreement, dated as of Mal"ch 1, 1994, by and between
the Issuer and Borrower, providing for the termS of the repayment of sums
borrowed to secure, among othel" things, the payments due on the Series
1994A Bonds;
(d) The Subordinate Loan Agreement, dated as of March 1, 1994, by
and between the Issuer and Borrower, providing for the terJDS of the
repayment of sums borrowed to secure, among other things, the payments due
. on the Subordinate Bonds;
(e) The lntercreditor Agreement, dated as of March 1, 1994, by and
among the Issuer, the Trustee and Asset Guaranty Insurance Company, a New
YOrk corporation (the "Insurer")providing certain rights>> remedies and
options for the benefit of the holders from time to time ot the Series 1994A
Bonds;
(f) A Bond Purchase Agreement>> to be dated a,s of the date of
execution thereof (the IlBond Purchase Agreement"), by and among the
Issuer>> the Borrower and Miller 8& Schr.oeder Financial, Inc. (the
"Underwriter") providing for the purchase of the Bonds by the Underwriter;
(g) A Bond Insurance Policy (the "Policy") issued by the Insurer to
the Trustee for the benefit of the holders from time to time of the Series 1994A
Bonds;
(h) a Preliminary Official Statement (the ttprellminary Official
Statement") relating to the Series 1994A Bonds; and
(i) a Preliminary Offering Memorandum (the "Preliminary Offering
Memorandum") relating to the Subordinate Bonds;
The agreements described and referred to in paragraphs (a) through (f)
above j shall hereinafter sometimes be referred to collectively as the" Agreements" ;
. NOW. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF HOPKINS, MINNESOTA, AS FOLLOWS:
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. 1- The Issuer acknowledges.) finds, determines I and declares that the
refunding of the Prior Bonds, the proceeds of which were used to construct the
Project ,. furthers the purposes of the Act.
2. For the purposes set forth above, there is hereby authorized the
issuance; sale and delivery of the Bonde in three series in a principal amount not to
exceed $11,090,000. The Series 1994A Bonds shall bear interest at a rate not to
exceed _ percent pel' annUM, the Series 1994B Bonds shall b~r interest at a rate
not to exceed _ percent per annu.m, and the Series 1994C Bonds shall bear interest
at a rate not to exceed ~ percent per annum. The Bonds shall be numbared,. shall
be dated, shall mature, shall be subject to redemption prior to maturity; shall be in
such form I and shall have such other details and pro'Visions as are prescribed in the
Indenture and Subordinate Indenture as of the date of execution thereof.
3. The Series 1994A Bonds shall be limited obligations of the Issuer payable
solely fl"C)m the re1renues, reserve funds and other amounts derived by the Issuer
from the Loan Agreement ~ Policy and other funds and revenues pledged pursuant
to the Indenture. The Subordinate Bonds shall be limited obligations of the Issuer
paya.ble solely from the revenueG, reserve funds and other amounts derived by the
Issuer from the Subordinate Loan Agreement and other funds and revenues pledged
pursuant to the Subordinate Indenture. The City Council of the Issuer hereby
authorizes and directs the Mayor and the City Manager of the Issuer (together I the
ttQfficialslt) to execute and deli'9'er the Agreements by to the Trustee, and hereby
authorizes and directs the execution of the Bonds in accordance with the Indenture
. and Subordinate Indenture , and hereby provides that the Indenture and
Subordinate Indentul:"e shall provide the terms and conditions ~ coV'enants, rights,
obligations) duties and agreements of the bondowners, the Issuer and the Trustee
as set forth therein.
I All of the provisions ot the Agreements, when executed as authorized herein,
shall be in full force and effect from the date of execution and delivery thereof. The
Agreements shall be substantially in the form on file with the Issuer; with such
necessary and appropriate variations; omissions and insertions as do not materially
change the substance thereof, or as the Mayor, in his discretion, sball determine,
and the execution thereof by the Ma.YOl' shall be conclusive e'rldence of such
determination.
4. The Series 1994A Bonds shall be Umited obligations of the Issuer the
prooeeds of which shall be disbursed pursuant to the Indenture and the Loan
Agreement J and the principal; premium and intel:'est on the Series 1994A Bonds shall
be payable solely from the proceeds of the Series 1994A Bonds, the Loan Agreement;
and other amounts realized pursuant to related security documents.
, The Subordinate Bonds shall be limited. obligations of the Issuer the
5.
proceeds of which shall be disbursed pursuant to the Subordinate Indenture and the
Subordinate Loan Agreement, and the principal, premium and interest on the
Subordinate Bonds shall be payable solely from the proceedS of the Subordinate
Bonds ~ the Subordinate Loan Agreement; and other amounts realized pursuant to
related sect1rity documents.
. 6. The Trustee is hereby appointed as Paying Agent and Bond Registrar
for the Bonds.
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. 7. The Officials are hel"eby authorized to execute and. deliver, on bebalf
of the Issuer, such other documents IJ.S are necessary or appropriate in connection
with the issuance, sale, and delivery of the Bonds, including an arbitrage
certificate, and all other documents and certificates as shall be necessary and.
appropriate in connection with the issuance, sale and delivery of the Bonds.
8 - All covenalits, stipulations, obligations and agreements of the Issuer
contained in this resolution and the aforementioned documents shall be deemed to be
the covenants, stipulations, obligation6 and agreements of the Issuer to the full
extent authorized or permitted by law, and all such covenants, stipulations,
obligations and agreements shall be binding upon the Issuer. Except as otherwise
provided in this resolution, all rights.. powers and privileges conferred and duties
and liabilities imposed upon the Issue);' by the provisions of this resolution or the
aforementioned documents shall be exercised or performed by such officers. board)
body 01' agency thereof as may be required or authomed by law to exercise such
powers and to perform such duties.
No cOVenant~ s tipulatioD, obUgation or agreement herein conta:in.ed 01'
contained in thf';'! aforementioned documents shall be deemed to be a coV'enant)
stipulation" obli~ation or 8gr:-eament of any member of the City Council of the Issuer,
or any officer, agent or employee of the Issuer in that person's individual capacity,
and neithe:r the City Council of the Issuer nor any officer or employee executing the
I Bonds shall be liable personally on the Bonds or be subject to any personal liability
I or accountability by reason of the issuance thereof.
. No provision, covenant or agreement contained in the aforementioned
documents, the Bonds or in any other document related to the Bonds, and no
obligation therein or herein imposed u.pon the Issuer or the breach thereof, shall
constitute or give rise to any pecuniary liability of the Issuer or any charge upon
its general credit or taxing powers. In making the agreements, provisions,
cO'l1enants and representations set forth in such documents, the Issuer has not
obligated itself to payor remit any funds or revenues, other than funds and
revenues d.erived from the Loan Agreement and Subordinate Loan Agreement and
Indenture and Subordinate Indenture, which are to be applied to the payment of the
Series 1994A Bonds and the Subordinate Bonds, respectively, as provid.ed therein.
9. The Issuer is not participating in the preparation of tho Preliminary
Official Statement and Preliminary Offering Memorandum, which Preliminary Official
Statement and Preliminary Offering Memorandum are expected to be amended and
completed to add certain pricing and other information (as amended and completed)
and has made and will m.ake no independent investigation with respect to the
information to be contained therein, including the Appendices the:reto, and the
I IssueX' assumes no responsibility for the sufficiency, accuracy or completeness of
such information. Subject to the foregoing, the Issuer authorizes the distribution
of the Preliminary Official Statement and the Official Statement in SUbstantially the
form of the Prelitninal'Y Offic1al Statement, and the Preliminary Offering Memorand.um
and the Offering Memorandum substantially in the form of the Preliminary Offering
Memorandum by the Underwriter to potential purchasers of the Bonds.
. 10. Except as herein otherwise expressly provided, nothing in this
resolution or in [he aforementioned documents expressed. or impUed.~ is in"tended. Or
shall be construed to conter upon any person or firm Or corporation, other than the
Issuer or any owner of the Bonds issued under the provisions of this resolution, any
right, remedy or claim, legal or equitable, under and by reason of this resolution or
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. any provision hereof) this resolution, the aforementioned documents and all ot their
provisions being intended to be and being for the sole and exclusive benefit of the
Issuer and any owners from time to time of the Bonds issued under the provisions
of this resolution.
11. In oase anyone or more of the provisions of this resolution, or of the
aforementioned documents, or of the Bonds issued hereunder shall for- any reason
be held to be illegal or invalid, such illegality or invalidity shall not affect any other
provision of this resolution, or of the aforementioned documents, or of the Bonds,
but this resolution, the aforementioned documents, and the Bonds shall be construed
and endorsed as if such illegal or invalid provision had not been contained therein.
12. The Bonds, when executed and delivered, shall contain a recital that
they at'e issued pursuant to the Act, and such recital shall be conclusive evidence
of the validity of the Bonds and the rel:lllarity of the issuance thereof, and that all
acts, conditions and things required by the laws of the State of Minnesota relating
to the adoption of this resolution, to the issuance of the Bonds and to the execution
of the aforementioned documents to happen, exist and be performed preced.ent to and.
in the enactment of this resolution, and precedent to issuance of the Bonds and
precedent to the execution of the aforementioned documents have happened, exist
and have been performed as $0 required. by law.
13. The officel"s of the Issuer, attorneys, engineers and other agents or
employees of the Issuer are hel'ebyauthorized to do all acts and things required of
. them by or in connection with this resolution, the aforementioned documents, and
the Bonds for the full, punctual and complete performance of all the terms,
covenants and agreements contained in the Bonds, the aforementioned documents
and this resolution. In the event that for any reason the Mayor of the Issuer is
1.:rnable to carry out the execution of any of the documents or other acts provided
herein, any other member of the City Council of the Issuer shall be authorized to act
in his capacity and undertake such execution or acts on behalf of the Issuer with full
force and effect ~ which executions or a.cts shall be valid and binding on the Issuer.
If for any reason the City Manager of the Issuer is unable to execute and deliver the
documents referred to in this Resalu tion, such documents may be executed by a
member of the City Council ot" the Assistant City Manager with the saDIe force and
effect as if such documents wel"e executed and delive:red by the City Manager of the
IS$uer.
Adopted; March , 1994
Mayor
Attest ~
. City Clerk
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. The motion for the adoption of the foregoing resolution was duly seconded. by
Couneilmember and upon vote being taken thereon, the
foUowin" voted in favor of the motion;
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and the followiJli; voted against:
whereupon said resolution was declared duly passed and adopted.
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SIGli631Ii
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. ST ATE OF MINNESOTA )
COUNTY OF HENNEPIN )
CITY OF HOPKINS )
The undersigned duly qualified and actin~ City Clerk of the City of Hopkins
hereby certifies that attached hereto is a true and COl'rect copy of the original
Resolution No. authorizing the issuance, sale and delivery of the Issuerts (i)
Elderly Housing Revenue Bonds (St. Therese Southwest, Inc. Project), Series
1994A, (ii) Subordinated Elclerly Housing Revenue Bonds (St. Therese Southwest,
Ine. Project) Series 1994B, and (ill) SuborcUn.&ted Elde1"ly Housing Revenue Bonds
(St. Therese Southwestt Inc. Project) Series 1994C, passed and adopted by the
Hopkins City Council on March )0 1994, on file in the office of the City Clerk,
City of Hopkins, Minnesota.
City Clerk
. Dated this day of March, 1994.
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We are proposed as' underwriters. for:,thebci,ticJs to be"issued '.by th~City of H~pki'ns., under the .
i. : provisioWi :ofMinn~so~. Statutes Section 469.1 52io 469 .165to provide' tht1 tu.nds 'nedessary t<;l .
re'Qnaneethe',debt currentlyou,tstandingon St..Therese Sotithwe~t {the '~Projectlt}. This letter is
I provide4solelY: fpt t~e' bel1efit .of ~he c;ity of Hopkins;lnd is n,ot irit~nded tobe relied. upon or
providedtQ'anyoth~rpersoris'" .
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! . We 'propost?: tp purchase $8,5 00,000 .: in senior rated, acid insured bop.dsand approximately
I ::52,600;900 inunratedsubordinated.debt in order to.providethefundsnecessaryt~ refinance all,
of the obligations ofthe Project.:Ou:r C:unentpricing sCheduleincqrporates i'nteres~rate5 of 3.5%
. to 6.2:5%' ori the senior Portion oftheofftlring~. ,This: 'sch~dule fully amortizes the debt over Ii.
, period"of 25 years at an aVyr~e:if!-terestrate o~ 6:1:3%. . Thecurrel1t pridngscheduieon the
subordinated.'portion incorporates intereSt'rat'esof'7.5% 'to 9.50,% and fullY amortizes this portion
over a period ofJO.years'with an,averagecoup~n of9J7%~ '. ".
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We have.'reviewed. ~url'entQCoup~ncy and. operations; cif,the. ProjeCt; the,audit,e'~. f'U1~ci~1 '.
j stgr.;;ments for the rrojtict. forthemostr~cent complete: fiscal ')!car,theyeart()'date up,slJ,dited' .
Project financ::ial statements fo~ .tp,e . current fiscal ye~through December', 31, 1993 ~d, 'the
i PrQjcc.t budgetforthe current fiscalyear. Current revenues of. the Project are shown from. the
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:. foregoing t(l' be suffiCient to' cOVer the,'- ~urrent open1tin~ reqliirernents,and.. antidpaied tjebt
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; se.-.rvice:on We'proposedbond~. . .
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. Hpdq,uil(tt;tfr. Minn~PoIl*; Winncso~ ' . . .
Offi"0;:5~ Sat. D~ga A.fc.. . S;an Fnnd~o A..... . 1",. Anac1l:. N<oa . St" Ji>llul . Cphimb.... ..~ItI., .
. ~ M...~'!.llrcljl NaE:lOP.JII "-""OOJliLbuo. Df 8c:curldol." .n.:..Jcn, ,~ \
Mctrr,~f 01 d.,c :Ycg,lrUl.. IAv~c:' P,~~ <,4.)I'PU"'~
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,'. , " . ":Assll~~ngOc~~paQe);;renta.1rates. andopenrtirig requirem,~rits' of .theProject. ate 'consistent with
i Qurrenf,op~r8.tions. .w~ believe that Proj~ct revenues will be . simill;lrlysufficient in. the' futUre.
, 'You shoulq,note, however,'tha.t actual future ~vents an~ eollditions 'Wil[occutor,exist ~at are
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dit'feJent .fr,om those whi,ch.currently exist or weaniicipated,andwe therefore,cannot guarantee
any matters 'as to the. future. '. . .
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