SF2023 - SUMMARY LETTER TO BOD AND BD.PDF
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Squire Patton Boggs (US) LLP 2325 E. Camelback Road, Suite 700 Phoenix, Arizona 85016 O +1 602 528 4000 F +1 602 253 8129 squirepattonboggs.com 1097436518\1\ September 26, 2023 To: Board of Supervisors Board of Directors Maricopa County, Arizona The Industrial Development Authority of the County of Maricopa Re: Not to Exceed $200,000,000 –Single Family Mortgage Revenue Bonds Ladies and Gentlemen: At the Board of Directors’ meeting of The Industrial Development Authority of the County of Maricopa (the “Maricopa IDA”) on October 10, 2023, the Maricopa IDA Board will be asked to grant final approval and adopt a resolution authorizing the joint issuance and sale by Maricopa IDA and The Industrial Development Authority of the City of Phoenix, Arizona (the “Phoenix IDA” and, together with the Maricopa IDA, the “Authorities”), in multiple series and subseries, of not to exceed $200,000,000 single family mortgage revenue bonds (the “Series 2023 Program Bonds”). This letter provides a summary of the proposed joint issuance of the Series 2023 Program Bonds and implementation of the plan of finance. AUTHORITY The Maricopa IDA is an Arizona nonprofit corporation, formed with the permission of 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”). The Phoenix IDA is an Arizona nonprofit corporation, formed with the permission of the City of Phoenix and incorporated under and pursuant to the Act. Each of the Authorities has the statutory authority to issue single family mortgage revenue bonds pursuant to the Act. The Authorities, Maricopa County and the City of Phoenix will be entering into a Cooperative/Intergovernmental Agreement providing for cooperation in implementing the Series 2023 Single Family Mortgage Revenue Bond Program (the “Program”) throughout Maricopa County. The Program will also be commonly known as the Home in Five Platinum Program. PRIOR SFMRB FINANCING The Authorities have been joint issuers of tax-exempt single family mortgage revenue bonds (“SFMRBs”) since 2000, with a hiatus during historically low mortgage interest rates, and have jointly issued over $725 million in SFMRBs. Since 2012, the Authorities have also collaborated on a non-bond, market rate homebuyer assistance program called the Home in Five Advantage Program. Board of Supervisors Board of Directors September 26, 2023 Page 2 1097436518\1\ THE PROGRAM The Series 2023 Program Bonds are being issued to finance the Program which will provide funds to assist low and moderate income homebuyers acquire single-family homes located within Maricopa County, including the City of Phoenix. This new Home in Five Platinum Program will offer below market mortgage rates, with downpayment assistance second loans. The Authorities anticipate that the Series 2023 Program Bonds will be issued over the next few years in multiple series ranging in size from $25 million to $75 million. The initial $30 million series of Series 2023 Program Bonds is expected to be issued in November 2023. It is anticipated that the initial series of Series 2023 Program Bonds will receive not less than an “Aa1” rating from Moody’s Investors Service, Inc. NOTIFICATION TO ARIZONA ATTORNEY GENERAL As required by the provisions of Arizona Revised Statutes, Section 35-721.F, the Authorities will notify the Arizona Attorney General of the Authorities’ intention to issue the Series 2023 Program Bonds. TAX EXEMPT FINANCING Pursuant to Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), the Maricopa County Board of Supervisors must approve the issuance of the Series 2023 Program Bonds after a public hearing following reasonable public notice. On or prior to closing, the Authorities will receive an opinion from Bond Counsel to the effect that interest on any tax-exempt series of the Series 2023 Program Bonds will be exempt from federal and State income taxes. Allocation(s) of the Arizona “volume cap” is required for the issuance of the Series 2023 Program Bonds. FINANCING PARTICIPANTS The major participants in the financing of the Series 2023 Program Bonds are as follows: Issuers: The Industrial Development Authority of the County of Maricopa and The Industrial Development Authority of the City of Phoenix, Arizona Issuers’ Counsel: Squire Patton Boggs (US) LLP Underwriter: Stifel, Nicolaus & Company, Incorporated Underwriter’s Counsel: Greenberg Traurig, LLP Bond Counsel: Kutak Rock LLP Trustee: U.S. Bank Trust Company, National Association Financial Advisor: CSG Advisors Incorporated Program Administrator: Housing and Development Services, Inc., dba eHousingPLUS Program Servicer: Lakeview Loan Servicing, LLC Board of Supervisors Board of Directors September 26, 2023 Page 3 1097436518\1\ PRINCIPAL FINANCING DOCUMENTS Document Parties Cooperative/Intergovernmental Agreement Issuers, Maricopa County, City of Phoenix General Indenture of Trust Issuers and Trustee Series Indenture Issuers and Trustee Series 2023 Program Bonds Issuers Bond Purchase Agreement Issuers and Underwriter Official Statement Issuers Continuing Disclosure Agreement Issuers and Trustee, as dissemination agent Standards and Requirements Issuers General Plans Issuers Program Servicing Agreement Issuers and Program Servicer Program Administration Agreement Issuers and Program Administrator Master Mortgage Purchase Agreement Issuers and mortgage loan lenders Notice to the Governing Bodies of Cities and Towns in Maricopa County Issuers FINAL APPROVAL At the Maricopa IDA Board meeting on October 10, 2023, the Maricopa IDA Board will be asked to grant final approval and adopt a resolution authorizing the issuance and sale of the Series 2023 Program Bonds and related matters. The Phoenix IDA previously adopted a final approval resolution on September 21, 2023. The City Council of the City of Phoenix, Arizona is being requested, at its meeting on October 18, 2023, to approve the proceedings under which the Series 2023 Program Bonds are to be issued and other related matters. Board of Supervisors Board of Directors September 26, 2023 Page 4 1097436518\1\ BOARD OF SUPERVISORS APPROVAL Under the provisions of A.R.S. § 35-721.B., the proceedings under which the Series 2023 Program Bonds are to be jointly issued by the Authorities are required to be approved by the Maricopa County Board of Supervisors. Also, pursuant to Section 35-706.D of the Act, the Standards and Requirements adopted by the Authorities for the Program require the approval of the Maricopa County Board of Supervisors, and, pursuant to Section 35-726.A of the Act, the General Plan adopted by the Authorities for the Program require the approval of the Maricopa County Board of Supervisors. The Maricopa County Board of Supervisors is being requested, at its meeting on October 18, 2023, to act as required by law to adopt a resolution approving the proceedings for the issuance of the Series 2023 Program Bonds under the Act and with respect to Section 147(f) of the Code, and to enter into the Cooperative/Intergovernmental Agreement for The Industrial Development Authority of the City of Phoenix, Arizona and The Industrial Development Authority of the County of Maricopa Series 2023 Single Family Mortgage Revenue Bond Program. 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 issued by Maricopa IDA, jointly or otherwise, or for the performance of any pledge, mortgage, obligation or agreement of any kind undertaken by Maricopa IDA, and none of the bonds or any of its obligations shall be construed to constitute an indebtedness of Maricopa County within the meaning of any constitutional or statutory provision. LEGAL COUNSEL RECOMMENDATION As counsel to the Authorities in connection with the Program, we have reviewed drafts of the principal financing documents and based upon our review of such and our review of the proceedings to date relating to the proposed issuance of the Series 2023 Program Bonds, we believe 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 Maricopa IDA Board and Maricopa County Board of Supervisors to act upon, and that the Resolution of the Maricopa IDA Board authorizing the issuance and sale of the Series 2023 Program Bonds and related matters and the Resolution of the Maricopa County Board of Supervisors approving the proceedings under which the Series 2023 Program Bonds are to be jointly issued by the Authorities and related matters, are in form and substance acceptable for adoption.