HomeMy WebLinkAboutAccepting Terms of Credit Enhancement Policy Pertaining Sewage Works Refunding Revenue Bonds of 2001Attest:
RESOLUTION
3046 -01
Passed by the Common Council of the City of South Bend, Indiana
October 22,
01
20_.
Presented by me to the Mayor of the City of South Bend, Indiana
October 23, 01
20
City Clerk
President of Common Council
Approved and signed by me
October 23,
2001 .
City Clerk
-" .
RESOLUTION NO. 3
A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH
BEND ACCEPTING TERMS OF CREDIT ENHANCEMENT POLICY
PERTAINING TO THE CITY OF SOUTH BEND, INDIANA SEWAGE
WORKS REFUNDING REVENUE BONDS OF 2001 AND APPROVING AND
AUTHORIZING OTHER ACTIONS IN RESPECT THEREWITH
WHEREAS, the City of South Bend, Indiana (the "City ") the City has determined that it is
advisable to issue current refunding bonds as authorized by Ordinance No. 9270 -01, passed by the
Common Council of the City (the "Common Council ") on September 24, 2001 (the "Bond
Ordinance ") and designated as the "City of South Bend, Indiana Sewage Works Refunding Revenue
Bonds of 2001" in an original amount not to exceed Six Million Three Hundred Thousand Dollars
($6,300,000) (the "2001 Bonds "); and
WHEREAS, Section 24 of the Bond Ordinance provides that in connection with the sale of
the 2001 Bonds the City may obtain bond insurance to secure the 2001 Bonds, with the premium for
such bond insurance to be payable from the proceeds of the 2001 Bonds; and
WHEREAS, the City has determined, based upon information furnished to the City by its
financial advisor, that it is advisable to obtain a financial guaranty bond insurance policy to secure
the 2001 Bonds (the "Bond Insurance Policy "), and to select MBIA Insurance Corporation
( "MBIA ") to issue the Bond Insurance Policy; and
WHEREAS, the Commitment of MBIA to issue the Bond Insurance Policy requires the City
to comply with certain MBIA procedures and approvals (the "Policy Terms "), and such provisions
include the matters which are contained in this Resolution; and
WHEREAS, the Common Council has determined that it is advisable to secure the 2001
Bonds with the Bond Insurance Policy issued by MBIA, and in this regard, the Common Council
desires to adopt this Resolution to insure that the City is in compliance with MBIA's Policy Terms
for so long as the 2001 Bonds are secured by the Bond Insurance Policy:
NOW THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY
OF SOUTH BEND, INDIANA, AS FOLLOWS:
SECTION 1. For so long as the 2001 Bonds are secured by the Bond Insurance Policy each
of the following provisions shall be followed and complied with in connection with the 2001 Bonds
and the Bond Ordinance:
A. Notice to the MBIA. Any notices required to be given by any party under the Bond
Ordinance shall also be given to the MBIA, Attn: Insured Portfolio Management.
B. Amendments or Supplements to 2001 Bond Ordinance. Without the prior written consent of
MBIA, no amendments or supplements to the Bond Ordinance shall be adopted by the City
for reasons other than: (i) a refunding to obtain savings; or (ii) the issuance of additional
bonds pursuant to an additional bonds test. The City shall send a copy of each of such
amendments or supplemental ordinances which are consented to by the MBIA to Standard
& Poor's ( "S &P ").
C. Events of Default and Remedies. Each of the following shall be deemed to constitute an
event of default under the Bond Ordinance: (i) the City fails to pay principal when due; (ii)
the City fails to pay interest when due; (iii) the City fails to observe any other covenant or
condition of the Bond Ordinance and such failure continues for 30 days; or (iv) the City
declares bankruptcy. MBIA, acting alone, shall have the right to direct all remedies in the
event of a default. MBIA shall be recognized as the registered owner of each bond which it
insures for the purposes of exercising all rights and privileges available to bondholders. For
bonds which it insures, MBIA shall have the right to institute any suit, action, or proceeding
at law or in equity under the same terms as a bondholder in accordance with applicable
provisions of the governing documents. Any acceleration ofprincipal payments with respect
to the 2001 Bonds shall be subject to the MBIA's prior written consent.
D. Defeasance. In addition to the limitations set forth in Section 15 of the Bond Ordinance,
defeasance requires the deposit of: (i) cash; (ii) U.S. Treasury certificates, notes and bonds
(including State and Local Government Series -- "SLGs "); (iii) direct obligations of the
Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar
securities; (iv) the interest component of Resolution Funding Corp. (REFCORP) strips which
have been stripped by request to the Federal Reserve Bank of New York in book entry form;
(v) pre - refunded municipal bonds rated "Aaa" by Moody's and "AAA" by S &P; provided,
however, that if the issue is only rated by S &P (i.e., there is no Moody's rating), then the pre -
refunded bonds must have been pre - refunded with cash, direct U.S. or U.S. guaranteed
obligations, or AAA rated pre - refunded municipals; (vi) Obligations issued by the following
agencies which are backed by the full faith and credit of the United States: (a) U.S. Export-
Import Bank (Eximbank) - direct obligations or fully guaranteed certificates of beneficial
ownership, (b) Farmers Home Administration (FmHA) - certificates ofbeneficial ownership,
(c) Federal Financing Bank, (d) General Services Administration - participation certificates,
(e) U.S. Maritime Administration - Guaranteed Title XI financing, (f) U.S. Department of
Housing and Urban Development (HUD) - project notes, local authority bonds, new
communities debentures (U.S. government guaranteed debentures), and U.S. Public Housing
notes and bonds (U.S. government guaranteed public housing notes and bonds).
E. Agents. In all transactions under the Bond Ordinance where there is an agent/enhancer (other
than the MBIA), the trustee, tender agent (if any), and paying agent (if any) must be
commercial banks with trust powers. In addition, the remarketing agent must have trust
powers if it is responsible for holding moneys or receiving bonds.
SECTION 2. This Resolution shall be in full force and effect from and after its passage.
-2-
PASSED AND ADOPTED by the Common Council of the City of South Bend, Indiana, this
22 "d day of October, 2001.
SBDS02 ABF 233736v3
PRESENTED O- ZZ'11� �`SS1'7td,�s6
NOT APPROVED a
ADOPTED (0 -L2--01 0.S SII�S'l't
COMMON COUNCIL OF THE
CITY OF SOUTH BEND, INDIANA
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Member of the Com no ouncil
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COMMITTEE REPORT
TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND:
Your Committee of the Whole, to whom was referred:
BILL NO.
01 -88 A RESOLUTION ACCEPTING TERMS OF CREDIT ENHANCEMENT
POLICY PERTAINING TO THE CITY OF SOUTH BEND,
INDIANA SEWAGE WORKS REFUNDING REVENUE BONDS OF
2001 AND APPROVING AND AUTHORIZING OTHER ACTIONS
IN RESPECT THEREWITH
Respectfully report that they have examined the matter and that in their opinion, this bill is being
recommended to the full Council with a favorable recommendation as substituted
Andrew Udj ak
Chairman