COMMITTEE SUBSTITUTE
FOR ORDINANCE NO. 070482
Approving the conversion to a
fixed rate of the interest rate on certain bonds previously issued by The
Industrial Development Authority of the City of Kansas City, Missouri and the
entering into one or more swap agreements; approving and authorizing certain
documents and actions relating to the fixing of the interest rate and swap
agreement relating to such bonds.
WHEREAS, The Industrial Development Authority of the
City of Kansas City, Missouri (the
"Issuer") is a public corporation duly organized and existing under
Chapter 349, Revised Statutes of Missouri, as amended (the Act); and
WHEREAS, pursuant to the Indenture of Trust, dated as
of March 1, 2005 (the Original Indenture) between the Issuer
and UMB Bank, N.A., as Trustee, as amended and supplemented by a First
Supplemental Indenture of Trust, dated as of July 1, 2006 (the
First Supplemental Indenture), the Issuer has previously issued its
$115,015,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds (Kansas
City Downtown Redevelopment District), Series 2005A (the
Series 2005A Bonds), its $64,985,000.00 Variable Rate Demand Tax‑Exempt Revenue Bonds
(Kansas City Downtown Redevelopment District) Series 2005B (the
Series 2005B Bonds), its $69,500,000.00 Variable Rate Demand Tax‑Exempt
Revenue Bonds (Kansas City Downtown Redevelopment District), Series 2006A
(the Series 2006A Bonds) and its $45,500,000.00 Variable Rate Demand Tax‑Exempt
Revenue Bonds (Kansas City Downtown Redevelopment District) Series 2006B
in the aggregate principal amount of (the Series 2006B Bonds)
(collectively, the Bonds) to finance certain costs associated with the Kansas
City Downtown Redevelopment Project (the Project); and
WHEREAS, in connection with
the issuance of the Bonds, the City has previously entered into a Financing
Agreement dated as of March 1, 2005 (the 2005 Financing
Agreement) and a Financing Agreement dated as of
July 1, 2006 (the 2006 Financing Agreement and
collectively, the Financing Agreement) pursuant to which the City has agreed,
subject to annual appropriation, to make certain payments to pay debt service
on the Bonds and to make certain additional payments; and
WHEREAS,
the City proposes that the Original Indenture and the First Supplemental
Indenture be amended pursuant to the Amended and Restated Indenture of Trust
dated as of the date set forth therein (collectively, the Indenture)to
facilitate a restructuring of the Bonds and the Issuer is authorized to make
such amendments pursuant to the Indenture; and
WHEREAS
the City proposes that the interest rate on the Series 2005A Bonds be converted
to a fixed rate of interest; and
WHEREAS,
in connection with such transaction, the Issuer will enter into a Series 2005A
Series Supplement to the Indenture dated as of the date set forth therein; and
WHEREAS,
the City proposes that the Issuer enter into an ISDA Master Agreement,
Schedule, Credit Support Annex and one or more Confirmations (collectively, the
swap agreement) relating to each of the Series 2005B Bonds and the Series
2006A Bonds, swapping the floating interest rate thereon to a fixed rate
(subject to the conditions set forth in the swap agreement); and
WHEREAS,
the City has been advised by counsel that the proposed swap agreement fits
within the legal constraints imposed by applicable law, the Indenture, City
resolutions and other contracts, and the City in consultation with its
financial advisor has evaluated the costs, benefits, risks and other
considerations regarding the proposed swap transaction; and
WHEREAS,
in connection with such swap transaction, the City and the Issuer will enter
into a Supplement to the Financing Agreement (Swap Transactions); and
WHEREAS,
in connection with the execution and delivery of the Amended and Restated
Indenture of Trust and in connection with the conversion to fixed rate
transaction described herein, each respective series of Bonds will be
remarketed pursuant to the respective Remarketing Agreement entered when such
series of Bonds was issued; and
WHEREAS,
the City has found and determined that restructuring the Bonds and the
conversion to a fixed rate of interest on the Series 2005A Bonds and the
entering of a swap agreement with respect to the Series 2005B Bonds and Series
2006A Bonds issued to finance the Project will benefit the citizens of the
City; and
WHEREAS,
in order to accomplish the foregoing, it is necessary and desirable that the
City approve the transaction described in this Ordinance and the execution and
delivery of the financing documents and certain other matters in connection
with the transaction, as herein provided; NOW, THEREFORE,
BE
IT ORDAINED BY THE COUNCIL OF KANSAS CITY:
Section
1. Approval of Restructuring of Bonds.
The City hereby requests, directs and instructs the Issuer to, and consents to
and approves the restructuring by the Issuer of the Bonds issued to finance the
Project, for the purpose of converting the interest rate on the Series 2005A
Bonds to a fixed rate of interest and entering a swap agreement with respect to
the Series 2005B Bonds and the Series 2006A Bonds to swap the floating interest
rate thereon to a fixed rate (subject to the conditions set forth in the swap
agreement), the remarketing of each series of the Bonds to facilitate such
transactions and the funding of certain costs of remarketing of the Bonds. The
Series 2005A Bonds upon conversion to a fixed rate of interest shall bear
interest at rates not to exceed 6.0% per annum and the Series 2005B Bonds and
Series 2006A Bonds upon the entry of the swap agreement shall have a interest
cost of not to exceed 6.0% per annum, and shall have such other terms and
provisions as shall be provided in the applicable supplemental indenture of
trust or swap agreement approved by the Director of Finance.
Section
2. Authorization and Approval of
Financing Documents. The proposed documents relating to the financing (the
Financing Documents) are hereby approved in substantially the forms submitted
to the City Council, and the Director of Finance is authorized to execute and
deliver the Financing Documents with such changes therein and additions thereto
as the Director of Finance deems necessary or appropriate.
(a) Supplement to Financing Agreement (Swap
Transactions).
(b) Continuing Disclosure Agreement, under
which the City agrees to provide continuing disclosure of certain financial
information, operating data and material events, for the benefit of the owners
of the applicable series of Bonds.
The
City Council further approves the execution and delivery by the City of any
documents which may be required in connection with the execution and delivery
by the Issuer of the Amended and Restated Indenture, the Series 2005A Series
Supplement to the Indenture and the swap agreement, documents relating to the
remarketing of the Bonds and of such other documents as the Director of Finance
deems necessary or appropriate in connection with the transactions authorized
by this Ordinance.
Section
3. Conversion of Series 2005A Bonds to Fixed Rate of Interest. The Issuers conversion of the interest rate on the
Series 2005A Bonds to a fixed rate of interest is hereby approved and the
Director of Finance is hereby authorized and directed to execute, enter into
and deliver on behalf of the City any documents, certificates and instruments
with respect thereto as the Director of Finance determines to be in the best
interest of the City.
Section
4. Floating-to-Fixed Swap Relating to Series 2005B Bonds and Series 2006A
Bonds. The Issuers entering into
the swap agreement to effect a floating-to-fixed rate swap relating to the
Series 2005B Bonds and the Series 2006A Bonds (subject to the conditions set
forth in the swap agreement) is hereby approved and the Director of Finance is
hereby authorized and directed to execute, enter into and deliver on behalf of
the City any documents, certificates and instruments with respect thereto as
the Director of Finance determines to be in the best interest of the City. One
or more prequalified Counterparties designated by the Director of Finance shall
be authorized to bid on a competitive basis. The Director of Finance is
delegated the power, in consultation with the financial advisor, to negotiate
the price and other terms and conditions of the swap transaction with the
Counterparties. The term of the swap as to a series of Bonds shall not exceed
the term of the applicable series of Bonds and the notional amount of the swap
shall not exceed $135,000,000. The Director of Finance is authorized to modify
the swap transaction, provided that the modifications do not extend the average
life of the term of the swap, increase the overall risk to the City resulting
from the swap or increase the notional amount of the swap beyond parameters
stated herein. The Director of Finance is authorized in such Directors
discretion to divide the swap agreement and award portions of the notional
amount of the swap agreement to more than one of the prequalified
Counterparties so long as the divided awards have the same economic effect as a
single swap agreement.
Section
5. Remarketing Statements.
The City hereby delegates authority to the Director of Finance to prepare,
approve and deem final any Preliminary Remarketing Statements and any final
Remarketing Statements relating to the remarketing of the Bonds, with the
signature of the Director of Finance thereon being conclusive evidence of the
Director's approval and the City's approval thereof, and the Director of
Finance is further authorized to approve the final terms of the conversion to
fixed rate of the interest on the Series 2005A Bonds. The City hereby consents
to the use and public distribution of any Preliminary Remarketing Statements
and any final Remarketing Statements in connection with the remarketing of the
Bonds.
Section
6. Financial Advisor. The City
hereby authorizes the selection of First Albany Capital Inc. and Valds & Moreno, Inc. as the co-financial advisors
to the City for the conversion to fixed rate and floating-to-fixed swap
transactions described in this Ordinance.
Section
7. Underwriters for Conversion of Series 2005A Bonds to Fixed Rate of
Interest. The City hereby authorizes
the selection of Oppenheimer & Company Inc., Piper Jaffray & Co. and
Harvestons Securities, Inc. as co-underwriters for the conversion to fixed rate
of the Series 2005A Bonds, subject to satisfactory negotiation of the terms
thereof as approved by the Director of Finance.
Section
8. Further Authority. The
officials of the City, Kutak Rock LLP and The Broadus Law Firm as co-swap
counsel, Kutak Rock LLP and The Hardwick Law Firm LLC as co-bond counsel, First
Albany Capital Inc. and Valds & Moreno,
Inc. as co-financial advisors, Oppenheimer & Company Inc. as Remarketing
Agent for the Series 2005A Bonds, Series 2005B Bonds and Series 2006A Bonds, Stern
Brothers & Co. as Remarketing Agent for the Series 2006B Bonds and
Oppenheimer & Company Inc., Piper Jaffray & Co. and Harvestons
Securities, Inc., as co-underwriters for the conversion to fixed rate of the
Series 2005A Bonds are further authorized and directed to execute such
documents, instruments and certificates and to take such further actions on
behalf of the City as shall be necessary or desirable to effect the terms and
provisions of this Ordinance.
______________________________________________
Approved as to form and legality:
___________________________
Heather
A. Brown
Assistant City Attorney