10A Action 2008 0602 Attach - Preliminary Official Statement

Home

Revenues, as evidenced in writing from the County Assessor or other appropriate official of the County, shall be at least equal to one hundred twenty five percent (125%) of Maximum Annual Debt Service, including annual debt service on the proposed Parity Debt, provided that in determining the amount of Tax Revenues for any future Fiscal Year, the Agency shall increase or decrease the Tax Revenues for the current Fiscal Year by adding or subtracting thereto amounts which at the time of calculation are payable by the Agency under the Fiscal Agreements and the Project Area Agreement but which cease to be so payable or become so payable for such future Fiscal Year; and (iii) In the case of Parity Debt issued as additional bonds under a Supplemental Indenture, the amount on deposit in the Reserve Account (and any subaccounts therein) shall be increased to the Reserve Requirement taking into account the additional bonds to be issued. For additional conditions that must be met for the issuance of Parity Debt, see "APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE." Subordinate Debt. Pursuant to the Indenture, the Agency may issue or incur subordinate debt ("Subordinate Debt") in such principal amount as shall be determined by the Agency. Such Subordinate Debt may be payable from any assets or property of the Agency, including Tax Revenues on a subordinate basis to the payment of debt service on the 2008 Bonds. Reserve Account Under the Indenture, a Reserve Account is established and held by the Trustee. On the Closing Date, a portion of 2008 Bond proceeds will be deposited into the Reserve Account in the amount of the Reserve Requirement. "Reserve Requirement" is defined in the Indenture to mean, as of the date of calculation by the Agency, the lesser of (i) the amount of Maximum Annual Debt Service on the 2008 Bonds (excluding from the calculation thereof Parity Debt other than additional bonds pursuant to a supplement to the Indenture), and (ii) one hundred and twenty five percent (125%) of average Annual Debt Service on the 2008 Bonds (excluding from the calculation thereof Parity Debt other than additional bonds pursuant to a supplement to the Indenture); provided, that in no event shall the Agency, in connection with the issuance of additional bonds pursuant to a supplement to the Indenture, be obligated to deposit an amount in the Reserve Account which is in excess of the amount permitted by the applicable provisions of the Internal Revenue Code to be so deposited from the proceeds of tax-exempt bonds without having to restrict the yield of any investment purchased with any portion of such deposit. "Maximum Annual Debt Service" means, as of the date of calculation, the largest Annual Debt Service for the current or any future Bond Year, including payments on any Parity Debt, as certified in writing by the Agency to the Trustee. "Annual Debt Service" means, for each Bond Year, the sum of (a) the interest payable on the Outstanding Bonds and other Parity Debt in such Bond Year, (b) the principal amount of the Outstanding Serial Bonds and other Parity Debt payable by their terms in such Bond Year, and (c) the principal amount of the Outstanding Term Bonds scheduled to be paid or redeemed from mandatory sinking account payments in such Bond Year. For purposes of such calculation, there shall be excluded the principal of any 2008 Bonds and other Parity Debt, together with the interest to accrue thereon, in the event and to the extent that the proceeds of such 2008 Bonds and other Parity Debt are deposited in an escrow fund and are held in cash or are invested solely in Permitted Investments and from which amounts may not be released to the Agency unless the amount of Tax Revenues for the current Fiscal Year (as evidenced in the written records of the County) at least equal the requirements for issuance of Parity Debt under the Indenture. -11-