GRAND CANYON UNIVERSITY 2024 - SUMMARY LETTER.PDF
Extracted text (via pymupdf)
7205 characters
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 $520,000,000 The Industrial Development Authority of the County of Maricopa Education Revenue Bonds (Grand Canyon University Project), Taxable 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, Grand Canyon University (the “Borrower” or “University”) is a nonprofit corporation duly organized and validly existing under the laws of the State. The University was founded in 1949 and has been operating as a private Christian university for more than 70 years. By the time the University converted back to nonprofit status in 2018, it had become one of the largest Christian universities in the United States. The Borrower is a comprehensive university that offers over 350 graduate and undergraduate programs with various emphases and certificates across ten colleges both online, on campus, and at ten off-campus classroom and laboratory sites located near healthcare providers. The University is accredited by the Higher Learning Commission and receives other program- specific accreditations. PROJECT The Borrower will apply the proceeds of the Bonds to finance and refinance capital, operating and working capital expenses, including the costs of acquisition, construction and improvement of educational facilities on the University’s Phoenix, Arizona campus located at 3300 West Camelback Road, Phoenix, Arizona, for use in connection with operation of the University and in furtherance of its Board of Supervisors Board of Directors October 31, 2024 Page 2 charitable purposes, and pay the costs and expenses related to the issuance and sale of the Bonds (collectively, the “Project”). The Project is in Supervisorial District No. 3. 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. FINANCING PARTICIPANTS The major financing participants, in addition to the Authority, are as follows: Applicant/Borrower: Grand Canyon University Bond/Borrower’s Counsel: Ballard Spahr Financial Advisor: Colliers International Underwriter/Placement Agent: Goldman Sachs & Co. LLC Underwriter’s Counsel: Nixon Peabody LLP Bond & Master Trustee: UMB Bank, National Association Trustee’s Counsel: Thompson Hine, LLP PRINCIPAL FINANCING DOCUMENTS Document Parties Bond Indenture, including the forms of the Bonds Authority and Bond Trustee Loan Agreement Authority and Borrower Bond Purchase Agreement Authority, Borrower and Underwriter PLAN OF FINANCING The Authority will issue the Bonds under and pursuant to the terms and provisions of the Bond Indenture in the aggregate principal amount not to exceed $520,000,000. The Bonds will be federally taxable and will be rated BBB- by a national rating agency. The proceeds from the sale of the Bonds will be loaned by the Authority to the Borrower pursuant to the terms of the Loan Agreement. The Borrower will enter into the Loan Agreement to evidence the obligations of the Borrower to make loan repayments in amounts necessary to pay the principal and interest on the Bonds. The Borrower will also enter into a Supplemental Master Indenture and issue one or more Obligations to further secure the Bonds and amounts due under the Loan Agreement. Such Board of Supervisors Board of Directors October 31, 2024 Page 3 Obligations will be secured on parity with all outstanding obligations and any additional obligations issued under the Master Trust Indenture. The Bonds will be sold by the Underwriter pursuant to one or more bond purchase agreements or bond placement agreements. The Underwriter will distribute to investors a Preliminary Limited Offering Memorandum, which, together with certain changes thereto, will become the final Limited Offering Memorandum, relating to the Bonds, Obligations and the Project. The sale of the Bonds will be limited to Qualified Institutional Buyers and Accredited Investors. 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 in December 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.