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HomeMy WebLinkAbout4798_CCv0001.pdf RESOLUTION NO. 4798 A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A SUPPLEMENTAL INDENTURE OF TRUST RELATING TO $81000, 000 CITY OF REDLANDS, CALIFORNIA VARIABLE RATE DEMAND MULTIFAMILY HOUSING REVENUE BONDS, 1988 SERIES A AND 1988 SERIES B (ORANGE VILLAGE APARTMENTS PROJECT) WHEREAS, the City of Redlands, California (the "Issuer") has issued its Variable Rate Demand Multifamily Housing Revenue Bonds, 1988 Series A and 1988 Series B (Orange Village Apartments Project) (the "Bonds") in order to finance the acquisition, construction and improvement of a multifamily housing project (the "Project") ; and WHEREAS, the Bonds are issued and secured pursuant to an Indenture of Trust dated as of July 1, 1988 by and between the Issuer and the Trustee (the "Indenture") ; and WHEREAS, the Bonds are secured by an irrevocable direct- pay letter of credit issued by Redlands Federal Bank, a federal savings bank ("Redlands") for the benefit of the Trustee (the "Letter of Credit") ; and WHEREAS, Redlands' obligations under the Letter of Credit are collateralized by the pledge of certain securities pursuant to a Collateral Pledge Agreement dated as of July 1, 1988 by and among Redlands, the Trustee and Seattle-First National Bank, as Collateral Agent (the "Collateral Pledge Agreement") ; and WHEREAS, in accordance with the terms of the Indenture and the Collateral Pledge Agreement, Redlands now wishes to amend the Collateral Pledge Agreement to permit delivery of a standby letter of credit from the Federal Home Loan Bank of San Francisco (the "Standby Letter of Credit") as collateral for Redlands' obligations under the Letter of Credit; and WHEREAS, a rating on the Bonds has been requested from Standard & Poor's Corporation ("S&P") in connection with delivery of the Standby Letter of Credit; and WHEREAS, certain changes to the Indenture are required in order to obtain the rating on the Bonds from S&P; and WHEREAS, the Issuer has been requested to enter into a First Supplemental Indenture of Trust dated as of August 1, 1991 (the "Supplemental Indenture") a form of which is attached to this Resolution as an exhibit; and FJ865690 I WHEREAS, the Trustee has determined that execution and delivery of the Supplemental Indenture will not impair the security for the Bonds or adversely affect the Owners of the Bonds; and WHEREAS, Maskan Development Company, a California Limited Partnership, the owner of the Project, has requested the Issuer to approve Citicorp Securities, Inc. as the successor Remarketing Agent for the Bonds; NOW, THEREFORE, the City Council of the City of Redlands, California does resolve and order as follows: Section 1 . Supplemental Indenture. The proposed form of Supplemental Indenture in substantially the form presented to this meeting and attached to this Resolution as an exhibit is hereby approved. The Mayor, the Mayor Pro Tem or the City Manager (the "Designated Officer") is hereby authorized and directed to execute and deliver the Supplemental Indenture, with such additions, changes and corrections as the Designated Officer may approve, but only upon receipt of the opinion of Kutak Rock & Campbell addressing the matters set forth in Paragraph 11 of said form of Supplemental Indenture. Section 2 . Remarketing Agent. Citicorp Securities, Inc. is hereby approved as successor Remarketing Agent for the Bonds pursuant to the Indenture. Section 3 . Execution of Documents. The Designated Officer is hereby authorized and directed, for and in the name and on behalf of the Issuer, to do any and all things and take any and all actions which the Designated Officer deems necessary or advisable to carry out the purpose of this Resolution. Section 4 . Effective Date. This Resolution shall take effect immediately upon its passage and adoption. APPROVED this 3rd day of September, 1991. 0,JI-1 91" Nfayor fof the / ity of Redlands ATTEST: City Cleik of thqrCity of Redlands (SEAL) FJB65690 �2� I, LORRIE POYZER, City Clerk of the City of Redlands, California, do hereby certify that the foregoing Resolution No. 4798 was regularly introduced and adopted by the City Council of the City of Redlands, California, at a regular meeting thereof held on the 3rd day of September, 1991, by the following vote of the City Council: AYES: Councilmembers Beswick, Cunningham, Larson, Milson; Mayor DeMirjyn NOES: None ABSENT: None IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal this 3rd day of September , 1991.City Clerk of,/ q City of Redlands, California FJ865690 -3- EXHIBIT "A" FIRST SUPPLEMENTAL INDENTURE OF TRUST This FIRST SUPPLEMENTAL INDENTURE OF TRUST (this "First Supplemental Indenture" ) , dated as of August 1, 1991 , is entered into by and between the CITY OF REDLANDS, CALIFORNIA, a municipal corporation (the "Issuer" ) , and SEATTLE-FIRST NATIONAL BANK, a national banking association, as trustee (the "Trustee" ) . RECITALS WHEREAS, the Issuer has issued its $8, 000 , 000 Variable Rate Demand Multifamily Housing Revenue Bonds 1988 Series A and 1988 Series B (Orange Village Apartments Project) (the "Bonds" ) in order to finance the acquisition, construction and improvement of a multifamily housing project (the "Project" ) ; and WHEREAS, the Bonds are issued and secured pursuant to an Indenture of Trust dated as of July 1 , 1988 by and between the Issuer and the Trustee (the "Indenture" ) ; and WHEREAS, the Bonds are secured by an irrevocable direct-pay letter of credit issued by Redlands Federal Bank, a federal savings bank ( "Redlands" ) for the benefit of the Trustee (the "Letter of Credit" ) ; and WHEREAS, Redlands ' obligations under the Letter of Credit are collateralized by the pledge of certain securities pursuant to a Collateral Pledge Agreement dated as of July 1, 1988 by and among Redlands , the Collateral Agent and the Trustee (the "Collateral Pledge Agreement" ) ; and WHEREAS, in accordance with the terms of the Indenture and the Collateral Pledge Agreement , Redlands now wishes to amend the Collateral Pledge Agreement to permit delivery of a standby letter of credit from Federal Home Loan Bank of San Francisco (the "Standby Letter of Credit" ) as collateral for Redlands ' obligations under the Letter of Credit; and WHEREAS, a rating on the Bonds has been requested from Standard & Poor ' s Corporation ( "S&P" ) in connection with delivery of the Standby Letter of Credit; and WHEREAS, certain changes to the Indenture are required in order to obtain the rating on the Bonds from S&P; and WHEREAS, the Trustee has determined that execution and delivery of this First Supplemental Indenture will not impair the security for the Bonds or adversely affect the Owners of the Bonds; NOW, THEREFORE, the Trustee and the Issuer agree as follows . 1 . Section 309 ; Letter of Credit Drawings . Section 309 (2) of the Indenture is hereby amended such that if, and so long as , the Collateral is a Standby Letter of Credit (as defined in the Collateral Pledge Agreement) any requirement in Section 309 (2) of the Indenture to draw on the Letter of Credit 37 days prior to an event shall be treated by the Trustee as a requirement to draw by 10 ; 00 a .m. , Pacific Time, three Business Days prior to that event . 2 . Section 602; Mandatory Redemption. The Trustee shall fix the Business Day after receipt of proceeds from the liquidation of the Collateral as the date of redemption of Bonds pursuant to Section 602 (a) , (f) , (g) or (h) of the Indenture. 3 . Section 1103 ; Funding by the Association. Section 1103 of the Indenture is amended such that if , and so long as, the Collateral is a Standby Letter of Credit, the requirement in Section 1103 of the Indenture to draw not later than the close of business on the third Business Day shall be treated by the Trustee as a requirement to draw by 10 : 00 a .m. , Pacific Time, on such third Business Day. 4 . Section 1_105 ; Tender Payments . Section 1105 of the Indenture is amended to make Seasoned Funds the last source of funds from which to pay the purchase price of Bonds . 5 . Capitalized Terms . All undefined capitalized terms used herein shall have the meaning assigned to such terms in the Indenture . 6 . Authority and Purpose for Execution of This First Supplemental Indenture of Trust . Execution and delivery of this First Supplemental Indenture is hereby conclusively determined to be authorized and effectuated pursuant to Section 1001 (3) of the Indenture . The Trustee hereby finds that execution and delivery of this First Supplemental Inden- ture will not impair the security for the Bonds or adversely affect the Owners of the Bonds . 7 . Appligability of the Indenturg. The provisions of the Indenture are hereby ratified, approved and confirmed, except as otherwise provided herein. -2- 49061 S . Provisions and Immunities of Trustee . In accepting and consenting to this First Supplemental Indenture, the Trustee shall be entitled to all of the privileges and immu- nities afforded to the Trustee under the terms and provisions of the Indenture and the Collateral Pledge Agreement . 9 . Severability. If any provision of this First Supplemental Indenture shall be held or deemed to be or shall , in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid , inoperative or unenforceable to any extent whatever . 10 . Governing Law. This First Supplemental Indenture shall be governed by and construed under applicable California law. 11 . Effective Date. This First Supplemental Indenture shall take effect immediately upon execution and delivery hereof and delivery of an opinion of Bond Counsel to the effect that the First Supplemental Indenture (a) complies with Article X of the Indenture and (b) will not impair the exemption of the interest on the Bonds from federal income taxation . 12 . Execution in Several Counterparts . This First Supplemental Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original , and all such counter- parts shall together constitute but one and the same instrument . IN WITNESS WHEREOF, the Trustee and the Issuer have caused this First Supplemental Indenture to be signed on behalf of each, all as of the date first above written. CITY OF REDLANDS, CALIFORNIA By s C I I Y NAGER T_ /SEAT E-FIRST NATIONAL BANK, as Tru ee By Its -3- 4906L Consented to as of the date first above written: MASKAN DEVELOPMENT COMPANY, REDLANDS FEDERAL BANK A CALIFORNIA LIMITED PARTNERSHIP By Its By Hooman Y. Shariff , General Partner CITICORP SECURITIES MARKETS, INC. By By Ali Shashani , Its General Partner -4- 4906L BEST, BEST & KRIEGER August 26, 1991 MEMORANDUM TO: MAYOR, CITY COUNCIL, CITY MANAGER AND CITY ATTORNEY FROM: BOND COUNSEL RE: PROPOSED AMENDMENTS TO BOND DOCUMENTS FOR $8, 000, 040 CITY OF REDLANDS VARIABLE RATE DEMAND MULTIFAMILY HOUSING REVENUE BONDS (ORANGE VILLAGE APARTMENTS PROJECT) 1988 SERIES A AND B Maskan Development Company, the owner (the "Owner") of the apartment project financed with the above Bond issue, and Redlands Federal Bank (the "Bank") , the provider of the letter of credit securing repayment of the above Bonds, have requested the City to make certain technical amendments to the Indenture of Trust under which the Bonds were issued in 1988 . The amendments will allow the Bonds to obtain a rating from Standard & Poor's Corporation. Currently, the Bonds are only rated by Fitch Investors Service. The proposed amendments will also allow the Bank to use an additional type of collateral, in the form of a standby letter of credit from the Federal Home Loan Bank of San Francisco, to secure the Bank's obligations under its letter of credit. Currently, the Bank's obligation is secured by a pool of mortgage-backed securities pledged to the Bond trustee. The new collateral that would be authorized by the proposed amendment to the Bond documents and the resulting rating from Standard & Poor' s are both generally viewed as improving the security of the Bonds. In connection with these changes, the Owner and the Bank have requested that a new remarketing agent be appointed for the Bonds. The current remarketing agent is Prudential-Bache Securities, Inc. It is not uncommon in a variable rate bond issue of this nature to periodically change the remarketing agent, who has the responsibility to reset the floating interest rate on such bonds on a weekly basis. In order to accomplish these changes, the City Council needs to adopt the attached resolution, which in turn approves a First Supplemental Indenture of Trust. We would recommend adoption of the attached resolution to accomplish the requested technical changes to the Bond documents and the appointment of a new remarketing agent. Francis J. Baum FJB65645