Title
Resolution giving approval to a Project; Authorizing the Issuance and Sale of Conduit Revenue Bonds under Minnesota Statutes, Sections 469.152 through 469.165, as amended; and Authorizing the Execution of Necessary Documents (HealthEast Care System), Districts 4, 7, 13 17 and Wards 1, 2, 4, 6
Body
WHEREAS, this Board of Commissioners (the "Board"), has received a proposal from HealthEast Care System (the "Corporation"), that the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the "Issuer"), issue its revenue bonds (the "Bonds") under Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "Act"), in one or more series (a) to refund all of the outstanding Hospital Facility Revenue Bonds (HealthEast Project), Series 2005 issued by the Issuer for the purpose of (i) financing a project consisting of the expansion, renovation and equipping of St. Joseph's Hospital ("St. Joseph's"), located at 45 West 10th Street in the City of St. Paul, Minnesota (the "City"); (ii) refunding the Issuer's Hospital Facility Revenue Crossover Refunding Bonds (HealthEast Project), Series 1993A; (iii) refunding the Issuer's Hospital Facility Revenue Bonds (HealthEast Project), Series 1993B; (iv) refunding the Housing and Redevelopment Authority of the City of South Saint Paul, Minnesota Hospital Facility Revenue Refunding Bonds (HealthEast Project), Series 1994 and (v) refunding the City of Maplewood, Minnesota Health Care Facility Revenue Bonds (HealthEast Project), Series 1996; (b) to refinance a taxable loan from General Electric Capital Corporation to the Corporation; (c) to finance the purchase from the Port Authority of the City of Saint Paul, Minnesota (the "Port Authority") of an eight-story office building and surface parking located at 1690 University Avenue West in the City ("Midway") by the redemption of such issuer's Lease Revenue Bonds (HealthEast Midway Campus Project), Series 2005-3A and Series 2005-3B (the "Port Authority Bonds"); (d) to finance improvements to (i) the Corporation's Woodwinds Health Campus located at 1825-1925 Woodwinds Drive in the City of Woodbury, including a project consisting of the construction and equipping of a new cancer center located at 1875 Woodwinds Drive in the City of Woodbury, (ii) St. Joseph's; (iii) Midway; (iv) Bethesda Hospital, located at 559 Capitol Boulevard in the City and (v) HealthEast Medical Transportation, located at 799 Reaney Avenue in the City; (e) to finance a deposit to a reserve fund for all or a portion of the bonds, if deemed necessary or appropriate and (f) to finance certain costs of issuance of the Bonds (collectively, the "Project"); and
WHEREAS, the Port Authority has consented to the refunding of the Port Authority Bonds by resolution adopted May 26, 2015;
WHEREAS, the Issuer expects to issue the Bonds in four series, expected to comprise the Issuer's Hospital Facility Revenue Bonds (HealthEast Project), Series 2015A (the "Series 2015A Bonds"); the Issuer's Taxable Hospital Facility Revenue Refunding Bonds (HealthEast Project), Series 2015B (the "Series 2015B Bonds"); the Issuer's Taxable Hospital Facility Revenue Refunding Bonds (HealthEast Project), Series 2015C (the "Series 2015C Bonds") and the Issuer's Taxable Hospital Facility Revenue Refunding Bonds (HealthEast Project), Series 2015D (the "Series 2015D Bonds"; together with the Series 2015B Bonds and Series 2015C Bonds, the "Direct Purchase Bonds");
WHEREAS, the Series 2015A Bonds are expected to be issued under the terms of an Indenture of Trust (the "Series 2015A Indenture") by and between the Issuer and Bank of New York Mellon, as bond trustee (the "Bond Trustee");
WHEREAS, the Series 2015B Bonds are expected to be issued under the terms of an Indenture of Trust (the "Series 2015B Indenture") by and between the Issuer and the Bond Trustee;
WHEREAS, the Series 2015C Bonds are expected to be issued under the terms of an Indenture of Trust (the "Series 2015C Indenture") by and between the Issuer and the Bond Trustee;
WHEREAS, the Series 2015D Bonds are expected to be issued under the terms of an Indenture of Trust (the "Series 2015D Indenture"; together with the Series 2015A Indenture, the Series 2015B Indenture and the Series 2015C Indenture, the "Bond Indentures") by and between the Issuer and the Bond Trustee;
WHEREAS, the proceeds of the Series 2015A Bonds are expected to be loaned to the Corporation pursuant to the terms of a Loan Agreement between the Issuer and the Corporation (the "Series 2015A Loan Agreement");
WHEREAS, the proceeds of the Series 2015B Bonds are expected to be loaned to the Corporation pursuant to the terms of a Loan Agreement between the Issuer and the Corporation (the "Series 2015B Loan Agreement");
WHEREAS, the proceeds of the Series 2015C Bonds are expected to be loaned to the Corporation pursuant to the terms of a Loan Agreement between the Issuer and the Corporation (the "Series 2015C Loan Agreement");
WHEREAS, the proceeds of the Series 2015D Bonds are expected to be loaned to the Corporation pursuant to the terms of a Loan Agreement between the Issuer and the Corporation (the "Series 2015D Loan Agreement"; together with the Series 2015A Loan Agreement, the Series 2015B Loan Agreement and the Series 2015C Loan Agreement, the "Loan Agreements");
WHEREAS, the Series 2015A Bonds are expected to be offered pursuant to a Preliminary Official Statement (the "Official Statement") and initially purchased by J.P. Morgan Securities LLC, on behalf of itself and the additional underwriter or underwriters named therein, if any, or any successor thereto or affiliate or assignee thereof, as approved by the Corporation (the "Underwriter"), pursuant to a Bond Purchase Agreement by and among the Issuer, the Underwriter and the Corporation (the "Bond Purchase Agreement");
WHEREAS, the Series 2015B Bonds are expected to be purchased by JPMorgan Chase Bank, N.A., a national banking association (the "Series 2015B Purchaser"), at a price equal to the principal amount thereof;
WHEREAS, the Series 2015C Bonds are expected to be purchased by Fifth Third Bank, an Ohio banking corporation (the "Series 2015C Purchaser"), at a price equal to the principal amount thereof;
WHEREAS, the Series 2015D Bonds are expected to be purchased by Siemens Financial Services, Inc. (the "Series 2015D Purchaser"; together with the Series 2015B Purchaser and the Series 2015C Purchaser, the "Purchasers"), at a price equal to the principal amount thereof;
WHEREAS, the Issuer, the Corporation and the Purchasers of the Bonds have agreed upon sufficient details of the proposed revenue bonds to enable the Issuer to adopt this resolution (the "Resolution") on this date.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota, as follows:
1. Proposal. The Board has received a proposal from the Corporation that the Issuer undertake to finance the Project pursuant to the Act through the issuance by the Issuer of the Bonds.
2. Project. The Bonds shall be issued to finance the Project.
3. Security for the Bonds. The Corporation's obligation to repay the loans made pursuant to the Loan Agreements will be evidenced by one or more Notes (whether one or more, the "Notes"), issued under and a form of which is set forth in the Amended and Restated Master Trust Indenture expected to be dated as of June 1, 2015 (the "Master Indenture"), entered into by and among the Corporation and other Members of the Obligated Group, as defined in the Master Indenture, and Bank of New York Mellon, as trustee (the "Master Trustee"), as supplemented and amended by one or more Supplemental Indentures (whether one or more, the "Supplemental Indenture") to be entered into by and between the Corporation and the Master Trustee. The Issuer shall assign its rights to the payments under the Notes and certain other rights under the Loan Agreements, the Master Indenture and the Supplemental Indenture to the Bond Trustee as security for payment of the Bonds under the respective Bond Indenture.
4. Limitation on Transfers of Direct Purchase Bonds. In accordance with Issuer policy, the Direct Purchase Bonds will be issued to either (a) a "qualified institutional buyer" as defined in Rule 144A promulgated under the 1933 Act, that purchases for its own account or for the account of a qualified institutional buyer, or (b) an "accredited investor" as defined in Regulation D promulgated under the 1933 Act, that purchases for its own account and without registration under state or other securities laws, pursuant to an exemption for such issuance. The Direct Purchase Bonds may not be assigned or transferred in whole or part, nor may a participation interest in the Direct Purchase Bonds be given pursuant to any participation agreement, except in accordance with the applicable Bond Indenture and continuing covenant agreement
5. Forms of Documents Submitted. Drafts of the following documents have been made available to the Board for approval prior to this meeting and have been reviewed to the extent deemed necessary:
(a) the Loan Agreements;
(b) the Notes;
(c) the Bond Purchase Agreement;
(d) the Official Statement;
(e) the Master Indenture and Supplemental Indenture and
(f) the Bond Indentures.
6. Findings. It is hereby found, determined and declared that:
(a) the Project will further the policies of the Act;
(b) the Project and the effect thereof will promote the public welfare by providing for the continuation of the health care operations of the Corporation in the City and surrounding area;
(c) the Act authorizes the issuance and sale of the Bonds, the execution and delivery by the Issuer of the Loan Agreements, the Bond Purchase Agreement and the Bond Indentures (collectively the "Bond Documents"), the performance of all covenants and agreements of the Issuer contained in the Bond Documents and the performance of all other acts and things required under the constitution and laws of the State of Minnesota to make the Bond Documents valid and binding obligations of the Issuer in accordance with their terms;
(d) it is desirable that the Bonds be issued by the Issuer upon the terms set forth in the Bond Indentures;
(e) the payments to be made by the Corporation (and the other Members of the Obligated Group) under the Loan Agreements and the Notes are fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Bonds when due;
(f) under the provisions of Minnesota Statutes, Section 469.162, and as provided in the Bond Documents, the Bonds are not to be payable from or charged upon any funds other than the revenue pledged to the payment thereof; the Issuer is not subject to any liability thereon; no holder of any Bond shall ever have the right to compel any exercise by the Issuer of its taxing powers to pay any of the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the Issuer except as provided in the Bond Documents; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Issuer except the interests of the Issuer in the Bond Documents; the Bonds shall recite that the Bonds do not constitute or give rise to a pecuniary liability or moral obligation of the Issuer, the City of Saint Paul, the State of Minnesota or its political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation.
7. Approval of Forms; Execution. Subject to the approval of counsel to the Issuer, and the provisions of paragraphs 8, 10 and 11 hereof, the forms of the Bond Documents and exhibits thereto and all other documents listed in paragraph 5 hereof are approved substantially in the form submitted and hereby made a part of this Resolution, with such changes as the Officials, as hereinafter defined, shall agree to. Subject to the provisions of paragraph 8 hereof, the Bond Documents, in substantially the forms submitted, are directed to be executed in the name and on behalf of the Issuer by the Chair or Commissioner, Executive Director and Director, Office of Financial Services (the "Officials"), provided that the Bond Purchase Agreement is directed to be executed on behalf of the Issuer by the Executive Director. Any other Issuer documents and certificates necessary to the transaction described above shall be executed by the appropriate Issuer officers. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in the Loan Agreement and the Bond Indenture.
8. Issuance; Acceptance of Offer. The Issuer shall proceed forthwith to issue the Bonds, in the form and upon the terms set forth in the Bond Indentures and this Resolution. The Bonds shall be issued as revenue bonds under the Act, in an aggregate principal amount not to exceed $360,000,000, shall be payable or prepayable at such time or times, shall bear interest at such rate or rates, shall be purchased, in the case of the Series 2015A Bonds, by the Underwriter, and in the case of the Direct Purchase Bonds, by the respective Purchaser at such prices and shall be subject to such other terms and conditions as the officers of the Issuer, the Corporation, the Underwriter and the Purchasers, as applicable, shall agree to. The Issuer hereby authorizes the issuance of the Bonds, provided that the Bonds mature no later than 40 years from the date of issuance thereof and provided that no initial interest rate exceeds 7.00% per annum. The Bonds are required to be issued in minimum denominations of $25,000 subject to obtaining a rating in at least the BB category or in minimum denominations of $5,000 subject to obtaining a rating in the BBB category or higher; otherwise the Bonds will be issued in minimum denominations of $100,000. The Corporation has represented that the Direct Purchase Bonds will be initially issued in minimum denominations of $100,000, and the Series 2015A Bonds will be issued in denominations in accordance with the Issuer's policy. The Officials are hereby authorized and directed, in conjunction with the appropriate officers of the Issuer, to prepare and execute the Bonds as prescribed in the Bond Indentures and to deliver them to the Bond Trustee for authentication and delivery to the purchasers.
9. Records and Certificates. The Officials and other officers of the Issuer are authorized and directed to prepare and furnish to the Underwriter and Purchasers certified copies of all proceedings and records of the Issuer relating to the Bonds, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the Issuer as to the truth of all statements contained therein.
10. Amendments and Changes in Forms Approved; Absent and Disabled Officers. The approval hereby given to the various documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions and amendments thereto as may be necessary and appropriate and approved by counsel to the Issuer and by the Executive Director and Director, Office of Financial Services (or their designees in the event of their absence or disability), who are hereby authorized to approve said changes and execute any necessary documents on behalf of the Issuer. The execution of any instrument by the appropriate officer or officers of the Issuer herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the Officials, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any duly designated member of the Board or acting official, or by such other officer or officers of the Board as, in the opinion of counsel to the Issuer, may act in their behalf.
11. Approval of the Department of Employment and Economic Development and other Approvals.
(a) The Application to the Minnesota Department of Employment and Economic Development, with attachments, form of which are on file with the City of Saint Paul, Department of Planning and Economic Development, is hereby approved, and the officers of the Issuer are authorized to execute said documents on behalf of the Issuer.
(b) In accordance with Section 469.154, Subdivision 3, of the Act, the officers of the Issuer are hereby authorized and directed to cause the Application to be submitted to the Department for approval of the Project and are hereby authorized and directed to provide the Department with any preliminary information needed for this purpose.
(c) Notwithstanding the foregoing, the issuance of the Bonds and the execution by the Issuer of the various documents referred to above are subject to the approval of the Project by the Department of Employment and Economic Development of the State of Minnesota and by the City of Woodbury pursuant to Section 147(f) of the Code and Minnesota Statutes, Section 471.656.
(d) The issuance of the Bonds is further subject to customary closing conditions, including delivery of opinions and certificates of the Corporation, Bond Trustee, Master Trustee, Underwriter and Purchasers, as applicable, in form satisfactory to the Issuer.
12. Headings; Terms. Paragraph headings in this Resolution are for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. Capitalized terms used but not defined herein shall have the meanings given them in the Bond Indenture and Loan Agreement.