4H, Resolution 2010-061 Giving Final Approval to the Proposed Issuance of Revenue Notes for Northwestern

Home Browse Search

CHAR TER ED November 9, 2010 Offices in Minneapolis Saint Paul St. Cloud Sue Iverson Finance Director/Treasurer City of Arden 1245 West Highway 96 Arden Hills, IVIN 55112 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 (612) 337-9300 telephone (612) 337-9310 fax SVNVW. kettnedy-graven.cotn Affirmative Action, Equal Opportunity Employer Re: $9,000,000 Adjustable Rate Revenue Bonds (Northwestern College Project), Series 2010 Dear Sue, JULIE A. EDDINGTON Attorney at Law Direct Dial (612) 337-9213 Email: jecldington@kennedy-graven.eorn Enclosed please find the final resolution (the "Resolution") proposed to be considered by the City Council (the "City Council") of the City of Arden Mills, Minnesota (the "City") at its special meeting on Monday, November 15, 2010, in connection with the above-referenced bond issue (the "Bonds"). The Resolution provides final approval to the issuance, delivery, and sale of the Bonds in an aggregate principal amount not to exceed $9,000,000 under Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act") and provides approval to the documents related thereto. A brief explanation of the financing follows. The City Council held a public hearing and provided preliminary approval for the issuance of tax-exempt obligations for the benefit of Northwestern College, a Minnesota nonprofit corporation (the "Borrower") on November 30, 2009. On March 29, 2010, the City Council provided final approval for the issuance of tax-exempt notes pursuant to a loan agreement. Al that time, the notes were to be placed with friends and alumni of the Borrower. Following the approval of the tax- exempt notes, the Borrower determined it was not in the best interest of the Borrower to continue with that type of financing structure. The Borrower subsequently negotiated with M&I Bank to purchase tax-exenlpt bonds with a different financing structure, which is described below. The Bonds are proposed to be issued pursuant to a Trust Indenture, dated on or after November 1, 2010, between the City and U.S. Bank National Association, as trustee (the "Trustee"). It is further imposed that the proceeds of the Bonds be loaned to the Borrower pursuant to the terns of a Loan Agreement, dated on or after November 1, 2010 (the "Loan Agreement"), between the City and the Borrower. The proceeds of the loan will be applied to finance a portion of the costs of the construction and equipping of an approximately 70,000 square foot facility, which will provide new dining facilities, an expanded campus store, student lounges, study areas, office space for student organizations, classrooms, and meeting spaces, to be located at on the portion of the Northwestern Campus located within the City (the "Project"). A portion of the proceeds of the loan will also be applied to paynlent of the costs of issuance of the Bonds. The Bonds are proposed to be privately placed with M&I Bank (the "Purchaser") and will bear interest at a variable rate. The Indenture allows the Bonds to convert to different types of interest rates, including a variable rate supported by a letter of credit. It is the intent of the Borrower that once the liquidity market opens up again, the Bonds will be converted to a variable rate secured by a letter of credit provided by M&I Bank.