HomeMy WebLinkAbout22755 1 ORDINANCE NO.22,755
2
3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF A CAPITAL
4 IMPROVEMENT REFUNDING REVENUE BOND; AUTHORIZING A
5 TRUST INDENTURE SECURING THE BOND; AUTHORIZING THE
6 PLACEMENT OF THE BOND; PRESCRIBING OTHER MATTERS
7 PERTAINING THERETO; AND DECLARING AN EMERGENCY.
8
9 WHEREAS, the City of Little Rock, Arkansas (the "City") has outstanding its Taxable Promissory
10 Note dated May 22,2024(the"2024 Note"),which financed the costs of the acquisition,construction and
11 installation of a solar photovoltaic array(the "Project"); and
12 WHEREAS,the 2024 Note is secured by a pledge of general revenues of the City and matures on May
13 22,2029;
14 WHEREAS,in order to provide permanent,long-term financing for the Project,the Board of Directors
15 of the City has determined that it is in the best interest of the City to refund the 2024 Note;and
16 WHEREAS,the City can accomplish the refunding of the 2024 Note(the"Refunding")by the issuance
17 of a Capital Improvement Refunding Revenue Bond, Taxable Series 2026 (the "Bond") in the principal
18 amount of$13,004,494;and
19 WHEREAS, the Bond will be secured by a pledge of revenues received by the City that are derived
20 from the payment of franchise fees by public utilities, excluding any franchise fees received from Central
21 Arkansas Water and Little Rock Water Reclamation Authority(the "Pledged Revenues"), and will mature
22 on May 1,2041;and
23 WHEREAS,the pledge of Pledged Revenues will be on a parity with the pledge in favor of the City's
24 outstanding Capital Improvement Refunding Revenue Bonds, Series 2017(the"Parity Bonds");and
25 WHEREAS, with the assistance of Stephens Inc., as financial advisor, and Raymond James &
26 Associates,Inc.,as placement agent,the City has made arrangements with Regions Commercial Equipment
27 Finance, LLC (the "Lender")to purchase the Bond as evidence of a privately negotiated loan at a price of
28 par from the Lender pursuant to a Letter of Offer and Representations(the"Letter of Offer");
29 NOW,THEREFORE,BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY
30 OF LITTLE ROCK,ARKANSAS AS FOLLOWS:
31 Section 1. The Refunding is hereby authorized. The Mayor and other officials of the City are hereby
32 authorized to take, or cause to be taken, all action necessary to accomplish the Refunding and to execute
[Page 1 of 3]
1 all required contracts. The 2024 Note shall be redeemed on the date the Bond is issued or the earliest
2 practicable date thereafter.
3 Section 2. The sale of the Bond to the Lender at a price of par pursuant to the Letter of Offer, to
4 evidence a privately negotiated loan from the Lender,subject to the terms and provisions hereafter in this
5 Ordinance set forth in detail is hereby approved,and the Bond is hereby sold to the Lender. The Mayor is
6 hereby authorized to execute and deliver the Letter of Offer. The Letter of Offer is hereby approved in
7 substantially the form submitted to this meeting,with such changes as shall be approved by the Mayor,his
8 execution to constitute conclusive evidence of such approval,and such changes as shall be approved by an
9 authorized officer of the Lender.
10 Section 3. Under the authority of the Constitution and laws of the State of Arkansas, including
11 particularly Title 14, Chapter 164 of the Arkansas Code of 1987 Annotated, the Bond, to be designated
12 "City of Little Rock, Arkansas Capital Improvement Refunding Revenue Bond, Taxable Series 2026" is
13 hereby authorized and ordered issued in the principal amount of$13,004,494, the proceeds of the sale of
14 which are necessary to accomplish the Refunding of the 2024 Note and to pay expenses of issuing the Bond.
15 The Bond shall be dated the date of delivery to the Lender and shall mature on May 1, 2041 (the
16 "Maturity Date"). The Bond shall bear interest at the rate of 5.42% per annum. Interest will be payable
17 annually (calculated on the basis of a 360 day year of twelve thirty day months) on May 1 of each year,
18 commencing May 1,2028,and continuing each year thereafter with the fmal payment due on the Maturity
19 Date. The rate on the Bond is subject to adjustment as provided in the Indenture (defined below) in the
20 event the City defaults in making the scheduled payments of the principal of and interest on the Bond when
21 due.
22 The Bond shall be subject to optional redemption, in whole at any time, or in part on any interest
23 payment date, on and after May 1, 2034, without penalty or premium. The Bond shall also be subject to
24 mandatory sinking fund redemption on May 1 of each of the years 2028 through 2040,with the outstanding
25 principal due on the Maturity Date,as set forth in the Indenture. All partial prepayments of principal shall
26 be applied to the inverse order of sinking fund redemption,as set forth in the Indenture.
27 Section 4. The Bond shall be executed on behalf of the City by the Mayor and City Clerk and shall
28 have impressed thereon the seal of the City. The Bond is not a general obligation of the City but is a special
29 obligation,the principal of and interest on which are secured by a pledge of and are payable from Pledged
30 Revenues. The pledge of Pledged Revenues is on a parity with the pledge in favor of the Parity Bonds.
31 The Bond and interest thereon shall not constitute an indebtedness of the City within any constitutional or
32 statutory limitation.
33 Section 5. To prescribe the terms and conditions upon which the Bond is to be executed,authenticated,
34 delivered,issued,accepted,held and secured,the Mayor and City Clerk are hereby authorized and directed
[Page 2 of 3]
1 to execute and acknowledge a Trust Indenture (the "Indenture"), by and between the City and Regions
2 Bank,as trustee. The Indenture is hereby approved in substantially the form submitted at this meeting,and
3 the Mayor and City Clerk are hereby authorized to execute and deliver the Indenture with such
4 modifications as shall be approved by the Mayor and City Clerk, their execution to constitute conclusive
5 evidence of such approval, and such modifications as shall be approved by an authorized officer of the
6 Lender.
7 Section 6. The Mayor and City Clerk,for and on behalf of the City,are hereby authorized and directed
8 to do any and all things necessary to effect the execution and delivery of the Indenture; the execution and
9 delivery of the Letter of Offer; and the performance of all acts of whatever nature necessary to effect and
10 carry out the authority conferred by this Ordinance. The Mayor and City Clerk are hereby further authorized
11 and directed, for and on behalf of the City, to execute,all papers, documents, certificates and other
12 instruments that may be required for the carrying out of such authority as to evidence the exercise thereof.
13 Section 7. The City Clerk shall maintain, in the permanent records of the City,for inspection by any
14 interested person,a copy of the Indenture and the Letter of Offer.
15 Section 8. Severability. In the event any title, section, paragraph, item sentence, clause, phrase, or
16 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or
17 adjudication shall not affect the remaining portions of the ordinance which shall remain in full force and
18 effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of the
19 ordinance.
20 Section 9. Repealer. The provisions of all technical codes, ordinances, and codes of ordinances in
21 conflict with the provisions of this ordinance are hereby repealed.
22 - Section 10. Emergency Clause. It is hereby ascertained and declared that the Refunding must be
23 accomplished as soon as possible in order to provide the City with cash flow savings; an emergency is
24 therefore declared to exist and this Ordinance being necessary for the immediate preservation of the public
25 peace, health and safety shall take effect and be in force from and after its passage.
26 PASSED:April 7,2026
27 ATTEST: APPROVED:
28
29 kilAANI.
30 Allison Segars,City Cl Frank Scott.Jr.,Ma
31 APPROVED AS TO LEGAL FORM:
32
33 �kiZ/Liet)gi
34 Thomas M.Carpenter,City Attori y
[Page 3 of 3]
CALL NOTICE
First Security Bank
Little Rock,Arkansas
Notice is hereby given that the City of Little Rock,Arkansas(the "City")expects to prepay
its Taxable Promissory Note,dated May 22,2024 on or about May 14,2026 or such later date that
the City's Capital Improvement Refunding Revenue Bond,Taxable Series 2026(the"2026 Bond")
is issued. In the event that the 2026 Bond is not issued,this Notice shall have no effect.
Dated April 7,2026.
CITY OF LITTLE ROCK,ARKANSAS
ByM
Mayor
LETTER OF OFFER AND REPRESENTATIONS
City of Little Rock,Arkansas
500 West Markham
Little Rock,Arkansas 72201
Attention: Mayor
Re: City of Little Rock, Arkansas Capital.Improvement Refunding Revenue
Bond,Taxable Series 2026
Ladies and Gentlemen: •
The undersigned (the "Lender") offers to purchase a Capital Improvement Refunding Revenue
Bond, Taxable Series 2026 in the principal amount of$13,004,494(the "Bond") from the City of
Little Rock, Arkansas (the "Issuer") at:a price of 100% on the dollar, as evidence of a privately
negotiated loan. The Bond is being issued for the purposes of(i)providing permanent financing
for the acquisition, construction and installation of a solar photovoltaic array by refunding the
Issuer's outstanding Taxable Promissory Note,dated May 22,2024 and(u)paying costs of issuing
the Bond.
The Bond shall be dated the date of delivery, shall bear interest at the rate of 5.42%(the "Interest'
Rate"),which interest shall be payable annually on May 1 of each year,commencing May 1,2028
and shall mature on May 1,2041. If the principal of or interest on the Bond is not paid when due,
the Bond shall, during the period of such payment default,bear interest at the Default Rate,which
is the Interest Rate plus 5%;provided,however,that the total rate shall never exceed the:maximum
rate permitted by law. A late fee of 5% of the total payment due will be assessed to the Issuer if
the payment of the principal of and interest on the Bond is not.received by the Lender within ten
(10)days of the payment due date.
The Bond shall be subject to optional redemption, in whole at any time, or in part on any interest
payment date,on and after May 1,2034,without penalty or premium;all partial prepayments shall
be applied to the inverse order of sinking fund redemption as set forth in the schedule attached as
Exhibit A attached hereto. The Bond shall also be subject to-mandatory sinking fund redemption
according to the schedule attached as Exhibit A hereto.
The.Bond shall be issued under and secured by a Trust Indenture dated as of the date of the Bond,
by and between the Issuer and Regions Bank,as trustee,pursuant to which the Issuer has pledged
to the undersigned, as security for the payment of the principal of and interest on the Bond,
revenues received by the City that are derived from the payment of franchise fees by public
utilities,excluding any franchise fees received from Central Arkansas Water and Little Rock Water
Reclamation Authority ("Pledged Revenues"). The pledge of the Pledged Revenues in favor of
the Bond will be on a parity with the pledge of Pledged Revenues in favor of the Issuer's Capital
Improvement Refunding Revenue Bonds, Series 2017. The Issuer may not assign its rights
hereunder or under any of the documents executed in connection with the Bond to any person
without the prior written consent of the Lender.
k
The Bond will be treated for federal income tax purposes as an,evidence of indebtedness of the
Issuer. Interest on the Bond will not be excludable from gross income for federal income tax
purposes and will be fully subject to federal income taxation. At the closing we shall receive the
approving bond counsel opinion of Friday, Eldredge & Clark, LLP ("Bond Counsel"), in
customary form and substance.
The closing shall occur on May 14, 2026, or at the request of the Issuer and with the approval of
the Lender, at such earlier or later date agreed to by the Lender. At the closing,the Lender shall
deliver to the Issuer the purchase price in"immediately available funds and shall accept delivery of
the Bond at such location agreed upon by the Issuer and the Lender. This Letter of Offer and
Representations shall expire if not accepted by April 10,2026.
The Lender represents to you as follows:
1. We have sufficient knowledge and experience in business and financial matters to
enable us to evaluate the Bond,the credit of the Issuer-and the Bond terms,and we will make our
own independent credit analysis and decision to purchase the Bond based upon an independent
examination and evaluation of the transaction and the information deemed appropriate, without
reliance on others, including Raymond James & Associates, Inc., as placement agent (the
"Placement Agent") and Stephens Inc., as financial advisor (the "Financial Advisor"), or their
respective affiliates, directors, officers, employees, attorneys or agents. We have had access to
and received all information concerning the Issuer which we have deemed material in formulating
a decision to purchase the Bond.
2. We acknowledge that the Issuer will not be entering into a continuing disclosure
agreement to provide ongoing disclosure with respect to the Bond pursuant to SEC Rule 15c2-
12. We have been offered copiesof or full access to all documents relating to the Bond and all
records, reports, financial statements and other information concerning the Issuer and pertinent
to the source of payment for the Bond as deemed material by us,which we have requested and to
which we would attach significance in making the decision to-purchase the.Bond without reliance
upon others.
3. We acknowledge that we have been informed of certain pending litigation
involving franchise fee revenues of the Issuer,have been afforded the opportunity to ask questions
and receive information,regarding such matters, and have independently had the opportunity to
review such matters to our satisfaction.
4. We confirm that we have regularly bought and sold obligations similar to the Bond
for our own account and have the knowledge and experience in financial and-business matters
sufficient to enable us to evaluate the merits and risks of purchasing the Bond.
5. We are purchasing the Bond as evidence of a privately negotiated loan for our
own account or for our loan portfolio and are not purchasing the Bond for resale or other
disposition and not with a present view to the sale, redistribution,or other disposition thereof in
the ordinary course .of business in a transaction not amounting to a public offering as
contemplated by Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act").
2
Although our present intention is to hold the Bond-to maturity Or early redemption, we reserve
the;right, subject to paragraph 5 below,to sell participation interests in or.otherwise dispose of
the Bond in the future as we choose.; In,reaching the conclusion that we desire to acquire the
Bond,we have carefully evaluated all risks associated with this purchase-and acknowledge that
We are able to bear the economic risk of this purchase. We are(i) an "institutional accredited
investor"within the meaning of Section 501(a)(1) (8)::of RegulationD under the 1933 Act.or(ii)
a "Qualified;Institutional Buyer" within the meaning of Rule"144A tender the 1933 Act with
respect to the Bond.
6. While the Lender shall maintain,the right to transfer and/or.assign, in whole, its.
rights hereunder,the Bond and any interest therein;to any personor entity in its sole and absolute
discretion, we acknowledge that (1)the,Bond will not be registered under the 1933 Act or any
applicable state securities law and(2)the Bond may not be transferred"unless, in the opinion of
counsel to the purchaser,such transfer Will'not cause a violation Of the 1933 Act,-:orany-applicable
state securities law, We agree that we will not sell, transfer, assign,.or otherwise dispose of the
Bond or such ownership interests therein(1)unless(a)we obtain from the purchaser and deliver
to the "Issuer an agreement similar in form and substance to this Letter of Offer and
Representations, or (b) we obtain from the -purchaser and deliver to the Issuer .a 'written
acknowledgement that such purchaser is a"qualified institutional buyer" as defined in Rule 144A
promulgated under the 1933'Act, and(2) except in compliance-with the applicable provisions of
the 1933 Act,the-Securities:Exchange Act of 1934, as amended (the "1934"Act"), any rules and
regulations promulgated under either the 1933 Act or the 1934 Act, and the.applicable securities'
laws.of any other jurisdiction, and in connection therewith,we-agree that we shall furnish to any
purchaser of the Bond all information required by applicable law. The Issuer acknowledges that
it may not assign its rights hereunder or under any of the documents related to the Bond to any
person without the prior written consent of the Lender.
7,. The Bond will be purchased by us under the following conditions:(i)the Bond will
not be assigned a separate rating by any municipal securities rating agency, (ii) the Bond Is-not
being registered with The Depository Trust-Company.- or any other securities depository or
otherwise qualified for sale under the,"Blue Sky" laws, (iii)we will hold-the Bond as one single
debt instrument;(iv)the Bond will not be assigned a CUSIP number by the CUSIP Service Bureau,
(v) no official statement or other similar offering document will be required or `delivered in.
connection with the private placement of the Bond, (vi) the Bond will not be,registered with The
• Depository Trust Company or any other securities depository,and(vii)the obligations represented_
by.the Bond will be classified as a privately:placed and negotiated loan.
8. We acknowledge thatthe.Bond is secured solely by the Pledged Revenues and that
there is no debt service reserve fund.
9. We.understand that the Issuer,the Placement Agent and the Financial Advisor,°and:
their respective counsel, and Bond Counsel will rely upon,the accuracy-and truthfulness of the
representations and warranties'contained herein and-hereby consent to such reliance.
10. The Lender and its representatives are not registered municipal advisors and do
not provide advice"to governmental entities or obligated persons with respect to.financial products
r
3
or the issuance of municipal securities (including regarding the structure, timing, terms and
similar matters concerning financial products or municipal securities issuances)or engage in the
solicitation of governmental entities or obligated persons for the provision by non-affiliated
persons of financial advisory services and/or investment advisory services. With respect to thus
Letter of Offer and Representations and any other information, materials or communications.
provided by the Lender: (a)the Lender and its representatives are not recommending an action to
any governmental entity or obligated person; (b)the Lender and its representatives are not acting
as an advisor to any governmental entity or obligated person and do not owe a fiduciary duty
pursuant to Section 15B of the 1934 Act to any governmental entity or obligated person with
respect to this Letter of Offer and Representations,information,materials or communications; (c)
the Lender and its representatives are acting for their own interests; and (d) the Issuer has been
informed that the Issuer should discuss this Letter of Offer and Representations and any such
other information, materials or communications with any and all internal and-external advisors
and experts that the Issuer,respectively,deems appropriate before acting on this Letter of Offer
and Representations or any such other information,materials or communications.
11. The engagement of Friday,Eldredge& Clark,LLP, as Bond Counsel,Watkins &
Eager PLLC,as Lender's counsel,the Financial Advisor and the Placement Agent did not include
services related to the compilation,verification or furnishing to us of information regarding the,
merits and risks of making the loan to the Issuer evidenced by the Bond. We have regularly made
loans evidenced by debt instruments similar to the Bond and have knowledge and experience in
financial and business matters sufficient to enable us to evaluate such-merits and risks.
12. The.Issuer represents and warrants to the Lender that neither it nor any of its
principals, shareholders, members, partners, or affiliates, as applicable, is a person named as.a
Specially Designated National and Blocked Person (as defined in Presidential Executive Order
13224) and-that it is not acting, directly or indirectly,for or on behalf ofany such person. The
Issuer further represents and warrants to the.Lender that the Issuer and its principals,shareholders,
members, partners, or affiliates, as applicable, are not directly or indirectly, engaged in, nor
facilitating,the transactions contemplated by this transaction on behalf of any person named,as a
Specially Designated National and Blocked Person.
13. The signatory of this Letter of Offer and Representations is a duly authorized officer
of Regions Commercial Equipment.Finance, LLC with the authority to sign.this Letter of Offer
and Representations on behalf of Lender, and this Letter of Offer and Representations has been
duly authorized,executed and delivered.
4
Dated: April 7,2026.
Sincerely,
REGIONS COMMERCIAL EQUIPMENT
FINANCE,LLC
By
r,(Title)
ACCEPTED ACCEPTED this day of April,2026.
CITY OF LITTLE ROCK,.ARKANSAS
B1-1,1,N
5
EXHIBIT A.
Year
(May 1)
2028 31,0.1:105'
2029 713 031.52
2030 751,677A-2
203.1 792,418:76
,
2032 8.35;307:86.
2033 880,644.80
2034 "928,37574
2035. 01$,69-3-31
.206 1 031 738'91
2037 1,087,65916
• 2038 1 146 61028
• 2039 1,208,75636
2040 L274,271.17
2041 1,343;336166
A,1