HomeMy WebLinkAboutFinal Executed LIT-SBT Term Sheet 040419March 27, 2019
CITY OF CARMEL REDEVELOPMENT AUTHORITY
$10,525,000 TAXABLE LEASE RENTAL BONDS, SERIES 2019A-1
TERM SHEET
Type of Borrowing: $10,525,000 City of Carmel Redevelopment Authority Taxable Lease Rental
Bonds, Series 2019A-1 (LIT/SBT) (the “2019A-1 Bonds”)
Issuer: City of Carmel Redevelopment Authority (the “Authority”)
Total Par: $10,525,000
Term: The 2019A-1 Bonds have a final maturity date of July 15, 2027.
Purchaser: Fifth Third Bank (the “Purchaser”)
Dated Date/Closing: April 9, 2019
Purpose: The Authority is issuing the 2019A-1 Bonds to purchase the Leased Premises
(defined herein). The sale proceeds will be used to pay a portion of the costs of
construction of the Hotel Carmichael Project and to pay bond issuance
expenses.
Authorization: On July 19, 2017, the Authority adopted a resolution authorizing the issuance,
in one or more series, of Authority lease rental bonds in an aggregate principal
amount not to exceed $71,000,000, as subsequently approved by Ordinance D-
2369-17, as amended, adopted by the Common Council of the City of Carmel,
Indiana (the “City”) on September 18, 2017 (the “Council LIT Ordinance”). On
December 14, 2017, the Authority issued (through the Carmel Bond Bank) (i)
$32,495,000 of City of Carmel Redevelopment Authority Lease Rental Bonds,
Series 2017B-1, (ii) $24,000,000 of City of Carmel Redevelopment Authority
Lease Rental Bonds, Series 2017B-2 and (iii) $815,000 of City of Carmel
Redevelopment Authority Taxable Lease Rental Bonds, Series 2017C-1
(collectively, the “Outstanding 2017 LIT Bonds”) in accordance with the
foregoing described Authority and Common Council approvals. The 2019A-1
Bonds will be an additional series of bonds issued in accordance with the
foregoing described Authority and Common Council approvals and the LIT
Indenture (as defined below).
The 2019A-1 Bonds do not constitute a corporate obligation of the City or the
City of Carmel Redevelopment Commission (the “Commission”), but
constitute special and limited obligations of the Authority payable solely from
the trust estate created and established under a trust indenture between the
Authority and the Trustee (defined herein), dated as of December 1, 2017, as
supplemented by a First Supplemental Trust Indenture to be dated as of the first
day of the month in which the 2019A-1 Bonds are issued (the “LIT Indenture”),
including the funds and accounts established thereunder.
The 2019A-1 Bonds are payable from lease rental payments (the “LIT Lease
Rentals”) to be made by the Commission to the Authority under the terms of a
Lease Agreement dated as of October 10, 2017, between the Authority, as
lessor, and the Commission, as lessee, as amended by an Addendum to Lease
Agreement dated as of December 14, 2017, and as further amended by a Second
Addendum to Lease Agreement to be dated as of the closing date of the 2019A-
1 Bonds (collectively, the “LIT Lease”).
To the extent there is a conflict between the legal documents and this Term
Sheet, the legal documents shall control.
Security: The LIT Lease Rentals are payable from the City’s distributive share of the
certified shares portion of the Expenditure Rate of the local income tax (“LIT”)
revenues (the “City LIT Revenues”) on parity with the pledge thereof to the
Outstanding LIT Obligations (defined below).
To the extent that the City LIT Revenues would be insufficient, such LIT Lease
Rentals are payable from a special benefits tax (which is a form of ad valorem
property tax) (the “Special Benefits Tax”), levied on all taxable property within
the Carmel Redevelopment District (the “Redevelopment District”). The
boundaries of the Redevelopment District are coterminous with the boundaries
of the City.
The Commission reasonably expects to pay such LIT Lease Rentals from the
City LIT Revenues.
LIT Leased Premises: The leased premises being acquired by the Authority from a portion of the
proceeds consist of all or a portion of the right-of-way of certain existing street,
all of which are currently fully constructed and operational for their intended
use.
Outstanding LIT
Obligations:
The pledge of City LIT Revenues is on parity with the prior pledges of the City
LIT Revenues to the payment of the following: (i) debt service due on the
County Option Income Tax Revenue Refunding Bonds of 2011; (ii) lease
rentals due on the County Option Income Tax Lease Rental Revenue Refunding
Bonds, Series 2014B; (iii) up to $465,000 annually (as back-up) to the payment
of the Hamilton County Redevelopment Authority Economic Development
Lease Rental Bonds of 2011 and the Hamilton County Redevelopment
Authority Economic Development Lease Rental Bonds of 2012 (which have
both been, and are anticipated to be, paid from Tax Increment generated from
the 96th Street - U.S. 421 Economic Development Area); (iv) up to $650,000
annually (as back-up) to the payment of the Hamilton County Redevelopment
District Tax Increment Refunding Revenue Bonds of 2015 (which have been,
and are anticipated to be, paid from Tax Increment generated from the Thomson
Economic Development Area); (v) lease rentals due on the Lease Rental Bonds,
Series 2016A; (vi) lease rentals due on the Local Income Tax Lease Rental
Revenue Refunding Bonds, Series 2017; and, (vii) lease rentals due on the
Outstanding 2017 LIT Bonds (all together referred to as the “Outstanding LIT
Obligations”).
Interest Rate: 3.94%, if loan closes by April 9, 2019. After that, the interest rate will adjust
according to the change in the 10-year swap index and will be fixed 10 days
prior to the closing date of the 2019A-1 Bonds.
Interest Calculation: Shall be calculated on the basis of 360-day year with twelve 30-day months.
Principal and Interest
Payments:
Principal and interest will be payable semiannually on January 15 and July 15
of each year, beginning July 15, 2019.
Lease Rental Payment
Dates:
LIT Lease Rentals will be payable on January 1 and July 1 of each year,
beginning July 1, 2019 with respect to the 2019A-1 Bonds.
Denominations Minimum denominations of $100,000, plus integral multiples of $1,000 in
excess thereof.
Optional Redemption: The 2019A-1 Bonds are not subject to optional redemption.
Mandatory Sinking Fund
Redemption:
The 2019A-1 Bonds may be issued as “Term Bonds” at the Purchaser’s
discretion and, in that case, will be subject to mandatory sinking fund
redemption.
Tax Status: Taxable; interest on the 2019A-1 Bonds is not excludable from gross income
for federal income tax purposes. In the opinion of Barnes & Thornburg LLP,
Indianapolis, Indiana (“Bond Counsel”), under existing laws, interest on the
2019A-1 Bonds is exempt from income taxation in the State of Indiana, except
for the financial institutions tax.
Rating: The 2019A-1 Bonds will be non-rated.
Disclosure: The Purchaser will receive copies of all legal documents including the LIT
Lease and the LIT Indenture, opinions and such other information that the
Purchaser deems necessary. No Official Statement and no Continuing
Disclosure Undertaking Agreement will be delivered to the Purchaser. The
City, for and on behalf of the Authority, and its advisors are available for due
diligence discussions and investigations.
Purchaser Requirements: The Purchaser will be required to execute a purchase agreement and a
Confidentiality Agreement, and deliver a “sophisticated investor” letter at
closing in a form prepared by Bond Counsel and satisfactory to the Authority.
The Bond Counsel opinion will be provided at closing at the expense of the
Authority.
Purchaser Legal Fees: Authority will pay Purchaser’s legal expenses not to exceed $5,000.
Local Contact: Henry Mestetsky, Carmel Redevelopment Commission Executive Director,
hmestetsky@carmel.in.gov
Trustee: John Alexander, The Huntington National Bank,
John.D.Alexander@huntington.com
Payment Principal Interest Bond Year
Dates Balance Principal Rates Interest Debt Service Debt Service
07/15/19 $10,525,000 $610,000 3.940% $110,582.67 $720,582.67
01/15/20 9,915,000 535,000 3.940% 195,325.50 730,325.50 $1,450,908.17
07/15/20 9,380,000 545,000 3.940% 184,786.00 729,786.00
01/15/21 8,835,000 555,000 3.940% 174,049.50 729,049.50 1,458,835.50
07/15/21 8,280,000 565,000 3.940% 163,116.00 728,116.00
01/15/22 7,715,000 575,000 3.940% 151,985.50 726,985.50 1,455,101.50
07/15/22 7,140,000 585,000 3.940% 140,658.00 725,658.00
01/15/23 6,555,000 600,000 3.940% 129,133.50 729,133.50 1,454,791.50
07/15/23 5,955,000 610,000 3.940% 117,313.50 727,313.50
01/15/24 5,345,000 625,000 3.940% 105,296.50 730,296.50 1,457,610.00
07/15/24 4,720,000 635,000 3.940% 92,984.00 727,984.00
01/15/25 4,085,000 650,000 3.940% 80,474.50 730,474.50 1,458,458.50
07/15/25 3,435,000 660,000 3.940% 67,669.50 727,669.50
01/15/26 2,775,000 675,000 3.940% 54,667.50 729,667.50 1,457,337.00
07/15/26 2,100,000 685,000 3.940% 41,370.00 726,370.00
01/15/27 1,415,000 700,000 3.940% 27,875.50 727,875.50 1,454,245.50
07/15/27 715,000 715,000 3.940% 14,085.50 729,085.50 729,085.50
Totals $10,525,000 $1,851,373.17 $12,376,373.17 $12,376,373.17
dated March 27, 2019 of Baker Tilly Municipal Advisors, LLC.)
(Subject to the comments in the attached Term Sheet
5
CARMEL (INDIANA) REDEVELOPMENT AUTHORITY
2019A-1 Bonds (LIT/SBT)
AMORTIZATION OF $10,525,000 PRINCIPAL AMOUNT OF
TAXABLE LEASE RENTAL BONDS, SERIES 2019A-1 (LIT/SBT)
Bonds dated April 9, 2019