PHOENIX CHILDREN'S 2025 - SUMMARY LETTER.PDF
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8687 East Via de Ventura, Suite 306 Scottsdale, Arizona 85258 www.mcida.com October 31, 2024 To: Board of Supervisors Board of Directors Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed $45,555,000 The Industrial Development Authority of the County of Maricopa Revenue Bonds (Phoenix Children’s Hospital), Series 2024 Ladies and Gentlemen: At the meeting of the Board of Directors (the “Board”) of The Industrial Development Authority of the County of Maricopa (the “Authority”) on November 12, 2024, the Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the Bond described above (the “Bonds”). This letter provides a summary of the proposed financing. AUTHORITY The Authority is an Arizona nonprofit corporation designated by law as a political subdivision of the State of Arizona. The Authority was formed with the permission of Maricopa County, Arizona (“Maricopa County”), and incorporated under and pursuant to the Arizona Industrial Development Financing Act, Title 35, Chapter 5, Arizona Revised Statutes, as amended (the “Act”). APPLICANT/BORROWER The Applicant/Borrower, Phoenix Children’s Hospital, Inc. (the “Borrower”), is a health care institution under the Act, an Arizona nonprofit corporation and a nonprofit organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. PROJECT The Borrower will use the proceeds of the Bonds to pay a portion of the costs of refunding the outstanding Arizona Health Facilities Authority Hospital Revenue Bonds (Phoenix Children’s Hospital), Series 2013B, which proceeds were used to finance and refinance the acquisition, construction, renovation, improvement, equipping and/or operating of certain hospital, health care and related facilities that constitute “projects” (as defined in the Act), owned and operated by the Borrower or the Phoenix Children’s Hospital Foundation and located in the cities of Phoenix, Avondale and Mesa in the State of Arizona (the “Project”). The Borrower’s main hospital campus is located at 1919 East Thomas Road, Phoenix and is in Supervisorial District No. 3, the Avondale facility is located at 1665 N. Avondale Blvd and is in District 5, and the Mesa facility is located at 5131 East Southern Avenue, Mesa, in District 2. Board of Supervisors Board of Directors October 31, 2024 Page 2 NOTIFICATION TO ARIZONA ATTORNEY GENERAL As required by the provisions of Arizona Revised Statutes, Section 35-721.F, the Authority will notify the Arizona Attorney General of its intention to issue the Bonds. TAX EXEMPT FINANCING On or prior to closing, the Authority will receive an opinion from Bond Counsel to the effect that interest on any tax-exempt series of the Bonds will be exempt from federal and State income taxes. FINANCING PARTICIPANTS The major financing participants, in addition to the Authority, are as follows: Applicant/Borrower: Phoenix Children’s Hospital Bond/Borrower Counsel: Orrick Herrington & Sutcliffe Financial Advisor: PFM Financial Advisors LLC Direct Purchase Bank: TD Public Finance LLC Bank Counsel: Chapman and Cutler LLP Bond & Master Trustee: The Bank of New York Trust Company, N.A. PRINCIPAL FINANCING DOCUMENTS Document Parties Loan Agreement Authority and Borrower Bond Indenture, including the form of Bonds Authority and Trustee PLAN OF FINANCING The Authority will issue the Bonds under and pursuant to the terms and provisions of the Bond Indenture in one or more tax-exempt or taxable series in the aggregate principal amount of not to exceed $45,555,000 and will loan the proceeds to the Borrower pursuant to the Loan Agreement. The Borrower will be obligated to make loan repayments in amounts and at such times as required to pay principal and interest on the Bonds on their due dates. To evidence and secure the obligation of the Borrower and the other members of the obligated group to make payments sufficient to pay the principal and interest on the Bonds, the Borrower will issue its Obligation No. 20 pursuant to the Twentieth Supplemental Master Indenture, which supplements the Master Trust Indenture (Amended and Restated), dated as of May 1, 2019 and effective August 20, 2020, between the Borrower and the Master Trustee, as previously supplemented, and as it may from time to time be amended or supplemented in accordance with its terms. Board of Supervisors Board of Directors October 31, 2024 Page 3 The Bonds will be purchased by TD Public Finance LLC.in a private placement. A tax certificate and agreement will be executed by the Authority and Borrower to evidence various representations and agreements aimed at establishing and preserving the tax-exempt status of the Bonds. FINAL APPROVAL At its meeting on November 12, 2024, the Authority Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the Bonds and related matters. BOARD OF SUPERVISORS APPROVAL Under the provisions of A.R.S. § 35-721.B., the Bonds to be issued by the Authority require the approval of the Maricopa County Board of Supervisors. The Maricopa County Board of Supervisors is being requested, at its meeting on November 20, 2024, to act as required by law to adopt a resolution approving the issuance of the Bonds under the Act. Under the provisions of the Act, specifically A.R.S. § 35-742, Maricopa County is not in any event liable for the payment of principal or interest on any bonds, notes or other obligations issued by the Authority or for the performance of any pledge, mortgage, obligation or agreement of any kind undertaken by the Authority, and none of the bonds, notes or other obligations, or any of its obligations thereunder, shall be construed to constitute an indebtedness of Maricopa County within the meaning of any constitutional or statutory provision. TRANSACTION CLOSING If the required approvals of the Authority Board and the Maricopa County Board of Supervisors are received, it is currently anticipated that the Bonds will be issued on December 4, 2024. LEGAL COUNSEL RECOMMENDATION General Counsel to the Authority has reviewed drafts of the principal financing documents and, based upon her review of such and her review of the proceedings of the Authority to date relating to the proposed issuance of the Bonds, she believes the principal financing documents are now in substantially final form, adequately meet the requirements of the Act, and are in both form and substance acceptable for the Authority Board to act upon, and that the Resolution of the Authority Board authorizing the issuance and sale of the Bonds and related matters and the Resolution of the Maricopa County Board of Supervisors approving the Bonds to be issued and related matters, are in form and substance acceptable for adoption.