$96,840,000 Revenue Refunding Bonds (Tax-Exempt), Series B-1 of 2015

Transcription

1 NEW ISSUE-BOOK-ENTRY ONLY Rating: See RATINGS herein Interest on the 2015B-2 Bonds is includable in gross income for federal income tax purposes. In the opinion of Bond Counsel, assuming continuing compliance by the Authority, the Ben Franklin Technology Development Authority and the Pennsylvania Department of Environmental Protection with certain covenants to comply with provisions of the Internal Revenue Code of 1986, as amended (the Code ), and all regulations applicable thereunder, and subject to the conditions described in TAX MATTERS herein, interest on the 2015A Bonds and 2015B-1 Bonds, respectively, is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations (as defined in the Code). Other provisions of the Code may affect the purchasers and holders of the 2015A Bonds and 2015B-1 Bonds. See TAX MATTERS herein for a brief description of these provisions. Under the laws of the Commonwealth of Pennsylvania as currently enacted and construed, the Series 2015 Bonds are exempt from personal property taxes in Pennsylvania, and interest on the Series 2015 Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax. $196,190,000 COMMONWEALTH FINANCING AUTHORITY REVENUE BONDS, SERIES 2015 Consisting of $96,000,000 Revenue Bonds (Tax-Exempt), Series A of 2015 Dated: Delivery Date $96,840,000 Revenue Refunding Bonds (Tax-Exempt), Series B-1 of 2015 $3,350,000 Revenue Refunding Bonds (Federally Taxable), Series B-2 of 2015 Due: June 1, As Shown on Inside Front Cover The Commonwealth Financing Authority (the Authority ) is issuing its Revenue Bonds in three series consisting of Revenue Bonds (Tax-Exempt), Series A of 2015 (the 2015A Bonds ), Revenue Refunding Bonds (Tax-Exempt), Series B-1 of 2015 (the 2015B-1 Bonds ), and Revenue Refunding Bonds (Federally Taxable), Series B-2 of 2015 (the 2015B-2 Bonds and, together with the 2015A Bonds and the 2015B-1 Bonds, the Series 2015 Bonds ). The 2015A Bonds will be issued and secured under the Energy Indenture, as defined herein, between the Authority and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the Energy Trustee ). The proceeds of the 2015A Bonds will be applied to (i) provide additional funding for the Alternative Energy Development Program established under the Alternative Energy Investment Act, 73 P.S et seq. (the Alternative Energy Act ), and other Project Costs (as defined herein) for program-related administration, and (ii) pay the costs of issuing the 2015A Bonds. The 2015B-1 Bonds and 2015B-2 Bonds (collectively the 2015B Bonds ) will be issued and secured under the Original Programs Indenture, as defined herein, between the Authority and TD Bank, N.A., as trustee (the Original Programs Trustee ). The proceeds of the 2015B Bonds will be applied to (i) refund all or a portion of certain of the Authority s outstanding bonds issued under the Original Programs Indenture and (ii) pay the costs of issuing the 2015B Bonds. The 2015A Bonds shall be payable from and secured by a lien upon and pledge of the Revenues as defined in the Energy Indenture and as described herein. The Revenues include all amounts payable to the Authority pursuant to the Energy Service Agreement, as defined herein, between the Authority and the Commonwealth of Pennsylvania (the Commonwealth ), acting through the Department of Community and Economic Development (the Department ), other than the Service Fee Component constituting Administrative Expenses and the amounts required to be deposited into the Rebate Fund pursuant to the Energy Indenture. The 2015B Bonds shall be payable from and secured by a lien upon and pledge of the Revenues as defined in the Original Programs Indenture and as described herein. The Revenues securing the 2015B Bonds include all amounts payable to the Authority pursuant to the Original Program Service Agreement, as defined herein, between the Authority and the Commonwealth, acting through the Department, other than the Service Fee Component constituting Administrative Expenses and the amounts required to be deposited into the Rebate Fund and any Revolving Fund pursuant to the Original Programs Indenture. The Energy Service Agreement and the Original Programs Service Agreement, each require the Department to make payments sufficient to pay the principal of and interest on the applicable Series 2015 Bonds when due, the payments due on other Obligations (defined herein) under the Energy Indenture and the Original Programs Indenture, respectively, and certain administrative costs of the Authority subject to appropriation, as described herein. The Department has covenanted in the Energy Service Agreement and the Original Programs Service Agreement that so long as any applicable Series 2015 Bonds remain outstanding, it shall include in its annual budget request an amount sufficient to pay all such amounts due and payable in the related fiscal year. See SECURITY FOR THE SERIES 2015 BONDS herein. THE SERIES 2015 BONDS SHALL BE LIMITED OBLIGATIONS OF THE AUTHORITY AND SHALL NOT CONSTITUTE NOR GIVE RISE TO ANY CHARGE AGAINST THE GENERAL CREDIT OF THE AUTHORITY. THE SERIES 2015 BONDS SHALL NOT CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF AND NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE SERIES 2015 BONDS OR THE INTEREST THEREON, NOR SHALL THE AUTHORITY BE OBLIGATED TO PAY THE SERIES 2015 BONDS OR THE INTEREST THEREON EXCEPT FROM THE REVENUES AND FUNDS OF THE AUTHORITY PLEDGED FOR THE PAYMENT THEREOF UNDER THE ENERGY INDENTURE OR THE ORIGINAL PROGRAMS INDENTURE, AS APPLICABLE. THE PAYMENTS MADE BY THE DEPARTMENT UNDER THE ENERGY SERVICE AGREEMENT AND THE ORIGINAL PROGRAMS SERVICE AGREEMENT, RESPECTIVELY, SHALL BE SUBJECT TO THE ANNUAL APPROPRIATION OF FUNDS FOR SUCH PURPOSE BY THE PENNSYLVANIA GENERAL ASSEMBLY, AND THERE CAN BE NO ASSURANCE THAT SUCH FUNDS WILL BE APPROPRIATED IN ANY FISCAL YEAR OF THE COMMONWEALTH. THE AUTHORITY HAS NO TAXING POWER. The scheduled payment of principal of and interest on the 2015B-1 Bonds stated to mature on June 1, 2024 (2.65% yield) and June 1, 2025 (2.85% yield) (collectively, the Insured Bonds ) when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Insured Bonds by Assured Guaranty Municipal Corp. ( Assured Guaranty ). The Series 2015 Bonds will be issued in denominations of $5,000 and any integral multiple thereof. The Series 2015 Bonds are issuable only as fully registered bonds without coupons. The Series 2015 Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ), New York, New York. DTC will act as securities depository (the Securities Depository ) for the Series 2015 Bonds. Purchasers will not receive certificates representing their ownership interest in the Series 2015 Bonds purchased. The principal of and interest on the Series 2015 Bonds are payable by the Energy Trustee and the Original Programs Trustee, respectively, to the Securities Depository, which is to remit such principal and interest to its Participants (as defined herein), which are to remit such principal and interest to the Beneficial Owners (as defined herein) of the Series 2015 Bonds, as described herein. See APPENDIX C Book-Entry Only System herein. The Series 2015 Bonds will be subject to redemption prior to maturity, as more fully described herein. The Series 2015 Bonds are offered for delivery when, as and if issued by the Authority and received by the Underwriters, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approving opinions of McNees Wallace & Nurick LLC, Harrisburg, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the Authority by Eckert Seamans Cherin & Mellott, LLC, Harrisburg, Pennsylvania, and for the Underwriters by their counsel, Cozen O Connor, Philadelphia, Pennsylvania. Certain legal matters with respect to the obligations of the Commonwealth, acting through the Department, under the Energy Service Agreement and the Original Programs Service Agreement will be passed upon by the Office of Chief Counsel for the Department of Community and Economic Development. Certain legal matters with respect to the obligations of the Commonwealth will be passed upon by the Office of Chief Counsel for the Office of Budget. Certain matters with respect to Appendix A to this Official Statement will be passed upon for the Commonwealth by Obermayer Rebmann Maxwell & Hippel LLP, special disclosure counsel to the Commonwealth. It is expected that the Series 2015 Bonds will be available for delivery in New York, New York, through the book-entry procedures of DTC, on or about April 23, Dated: April 9, 2015 JANNEY MONTGOMERY SCOTT PNC CAPITAL MARKETS LLC RBC CAPITAL MARKETS

2 $196,190,000 COMMONWEALTH FINANCING AUTHORITY REVENUE BONDS, SERIES 2015 Consisting of: $96,000,000 Revenue Bonds (Tax-Exempt), Series A of 2015 Maturity (June 1) Par Amount Interest Rate Yield Initial Offering Price CUSIP** 2016 $ 335, % 0.600% P HW , P HX , P HY , P HZ , P JA , P JB , P JC , P JD , P JE , P JF , P JG , P JH , P JJ , P JK , P JL , P JM * 8,450, P JN * 19,550, P JP * 29,725, P JQ * 31,215, P JR4 * Yield/Price to June 1, 2025 optional redemption date. ** The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Authority or the Underwriters, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refunding or defeasance of such securities or the use of secondary market financial products. None of the Authority or the Underwriters has agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above.

3 $96,840,000 Revenue Refunding Bonds (Tax-Exempt), Series B-1 of 2015 Maturity (June 1) Par Amount Interest Rate Yield Initial Offering Price CUSIP** 2021 $ 2,570, % 2.060% P JS ,810, P JT ,720, P JU ,000, P JV ,320, P JW ,150, P JX ,795, P JY ,000, P JZ6 2026* 13,475, P KA9 $3,350,000 Revenue Refunding Bonds (Federally Taxable), Series B-2 of 2015 Maturity Interest Initial (June 1) Par Amount Rate Yield Offering Price CUSIP** 2021 $3,350, % 2.845% P KB7 * Yield/Price to June 1, 2025 optional redemption date. ** The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Authority or the Underwriters, and such parties are not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refunding or defeasance of such securities or the use of secondary market financial products. None of the Authority or the Underwriters has agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above. Insured by Assured Guaranty. See front cover and BOND INSURANCE herein.

4 COMMONWEALTH FINANCING AUTHORITY 400 North Street, 4th Floor Harrisburg, Pennsylvania Dennis M. Davin, Chair Acting Secretary of Community and Economic Development Robin L. Wiessmann Acting Secretary of Banking and Securities Austin J. Burke Appointed by The Minority Leader of the Senate Michael Karp Appointed by the Speaker of the House of Representatives Randy Albright Secretary of the Budget John J. Verbanac Appointed by the President Pro Tempore of the Senate Marc Little Appointed by the House Minority Leader

5 No dealer, broker, salesperson or other person has been authorized by the Authority or the Underwriters to give any information or to make any representations with respect to the Series 2015 Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2015 Bonds in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. Neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the parties referred to above since the date hereof. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2015 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITERS MAY OFFER AND SELL THE SERIES 2015 BONDS TO CERTAIN DEALERS AND CERTAIN DEALER BANKS AND BANKS AND OTHERS ACTING AS AGENTS AT PRICES LOWER THAN THE OFFERING PRICES STATED ON THE COVER PAGE HEREOF, AND SAID OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE AUTHORITY, THE COMMONWEALTH AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Except as otherwise noted, the information herein speaks as of its date and is as of the date of this Official Statement and is subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, in any circumstances, create any implication that there has been no change in the affairs of the Authority or the Commonwealth since the date hereof. If and when included in this Official Statement, the words expects, forecasts, projects, intends, anticipates, estimates, assumes and analogous expressions are intended to identify forwardlooking statements and any such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those that have been projected. Such risks and uncertainties which could affect the revenues and obligations of the Authority include, among others, changes in economic conditions, mandates from other governments and various other events, conditions and circumstances, many of which are beyond the control of the Authority. Such forward-looking statements speak only as of the date of this Official Statement. The Authority disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any changes in the Authority s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The order and placement of the information this Official Statement, including the Appendices hereto and the information incorporated herein by reference, are not to be deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the Appendices, and the information incorporated herein by reference, must be considered in its entirety. Assured Guaranty makes no representation regarding the Insured Bonds or the advisability of investing in the Insured Bonds. In addition Assured Guaranty has not independently verified, makes no representation regarding and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding Assured Guaranty supplied by Assured Guaranty and presented under the heading BOND INSURANCE AND APPENDIX G SPECIMEN MUNICIPAL BOND INSURANCE POLICY.

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7 TABLE OF CONTENTS Page INTRODUCTORY STATEMENT... 1 COMMONWEALTH FINANCING AUTHORITY... 2 ALTERNATIVE ENERGY ACT... 2 ORIGINAL PROGRAMS UNDER THE ACT... 3 PLAN OF FINANCE... 4 REFUNDING PROGRAM... 4 ESTIMATED SOURCES AND USES OF FUNDS... 5 DESCRIPTION OF THE SERIES 2015 BONDS... 5 REDEMPTION... 6 SECURITY FOR THE SERIES 2015 BONDS... 8 LIMITED OBLIGATION OF THE AUTHORITY... 8 ENERGY SERVICE AGREEMENT... 8 ORIGINAL PROGRAMS SERVICE AGREEMENT... 9 APPROPRIATION TO THE AUTHORITY - GENERAL HISTORICAL APPROPRIATION TO THE AUTHORITY COMMONWEALTH INFORMATION REVENUE PLEDGE DEFEASANCE THE BUDGETARY PROCESS ADDITIONAL BONDS AND FINANCING FACILITY OBLIGATIONS DEBT SERVICE REQUIREMENTS ENERGY BONDS ORIGINAL PROGRAMS BONDS BOND INSURANCE BOND INSURANCE POLICY ASSURED GUARANTY MUNICIPAL CORP TAX MATTERS FEDERAL TAX EXEMPTION 2015A BONDS AND 2015B-1 BONDS FEDERAL TAX 2015B-2 BONDS STATE TAX EXEMPTION - SERIES 2015 BONDS VERIFICATION OF MATHEMATICAL COMPUTATIONS LITIGATION UNDERWRITING RATINGS BOND INSURANCE RISK FACTORS LEGAL MATTERS FINANCIAL ADVISOR CERTAIN RELATIONSHIPS i

8 LIMITATIONS OF RIGHTS AND REMEDIES UNDER FEDERAL BANKRUPTCY CODE UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE MISCELLANEOUS APPENDIX A FINANCIAL AND OTHER INFORMATION RELATING TO THE COMMONWEALTH... A-1 APPENDIX B-1 APPENDIX B-2 DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONS OF THE ENERGY INDENTURE... B-1 DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONS OF THE ORIGINAL PROGRAMS INDENTURE... B-2 APPENDIX C BOOK-ENTRY ONLY SYSTEM... C-1 APPENDIX D-1 FORM OF ENERGY SERVICE AGREEMENT... D-1 APPENDIX D-2 FORM OF ORIGINAL PROGRAMS SERVICE AGREEMENT... D-2 APPENDIX E-1 FORM OF OPINION OF BOND COUNSEL FOR 2015A BONDS... E-1 APPENDIX E-2 FORM OF OPINION OF BOND COUNSEL FOR 2015B BONDS... E-2 APPENDIX F FORM OF CONTINUING DISCLOSURE AGREEMENT... F-1 APPENDIX G SPECIMEN MUNICIPAL BOND INSURANCE POLICY... G-1 ii

9 $196,190,000 COMMONWEALTH FINANCING AUTHORITY REVENUE BONDS, SERIES 2015 Consisting of $96,000,000 Revenue Bonds (Tax-Exempt), Series A of 2015 $96,840,000 Revenue Refunding Bonds (Tax- Exempt), Series B-1 of 2015 INTRODUCTORY STATEMENT $3,350,000 Revenue Refunding Bonds (Federally Taxable), Series B-2 of 2015 The purpose of this Official Statement is to provide certain information concerning the $196,190,000 aggregate principal amount of Commonwealth Financing Authority Revenue Bonds, Series 2015, consisting of $96,000,000 aggregate principal amount of Revenue Bonds (Tax-Exempt), Series A of 2015 (the 2015A Bonds ), $96,840,000 aggregate principal amount of Revenue Refunding Bonds (Tax-Exempt), Series B-1 of 2015 (the 2015B-1 Bonds ) and $3,350,000 aggregate principal amount of Revenue Refunding Bonds (Federally Taxable), Series B-2 of 2015 (the 2015B-2 Bonds and, together with the 2015B-1 Bonds, the 2015B Bonds ). The 2015A Bonds and the 2015B Bonds are collectively referred to herein as the Series 2015 Bonds. The 2015A Bonds are to be issued by the Commonwealth Financing Authority (the Authority ) to (i) provide additional funding for the Alternative Energy Development Program established under the Alternative Energy Investment Act, 73 P.S et seq. (the Alternative Energy Act ), and other Project Costs (as defined herein) for program-related administration, and (ii) pay the costs of issuing the 2015A Bonds. The 2015A Bonds are being issued pursuant to the provisions of 64 Pa. C.S et seq. (the Act ), the Alternative Energy Act, a resolution (the Resolution ) of the Authority adopted on October 21, 2014 and a Trust Indenture dated as of May 1, 2009 (the Initial Energy Indenture ), as supplemented by a First Supplemental Trust Indenture dated as of April 15, 2010 (the First Supplemental Energy Indenture ), as further supplemented and amended by a Second Supplemental Trust Indenture dated as of January 1, 2013 (the Second Supplemental Energy Indenture ), and as further supplemented by a Third Supplemental Trust Indenture dated as of April 1, 2015 (the Third Supplemental Energy Indenture and, together with the Initial Energy Indenture, the First Supplemental Energy Indenture and the Second Supplemental Energy Indenture, the Energy Indenture ), between the Authority and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the Energy Trustee ). Capitalized terms used in this Official Statement with respect to the 2015A Bonds and not otherwise defined herein have the respective meanings set forth in APPENDIX B-1 DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONS OF THE ENERGY INDENTURE. The 2015B Bonds are to be issued by the Authority to (i) provide funds to refund all or a portion of certain of the Authority s outstanding bonds issued under the Original Programs Indenture (as defined below), and (ii) pay the costs of issuing the 2015B Bonds. The 2015B Bonds are being issued pursuant to the Act, the Resolution and a Trust Indenture dated as of November 1, 2005 (the Initial Original Programs Indenture ), as supplemented by a First Supplemental Trust Indenture dated as of April 1, 2006 (the First Supplemental Original Programs Indenture ), as further supplemented by a Second Supplemental Trust Indenture dated as of December 1, 2006 (the Second Supplemental Original Programs Indenture ), as further supplemented by a Third Supplemental Trust Indenture dated as of March 1, 2008 (the Third Supplemental Original Programs Indenture ), and as further supplemented by a Fourth Supplemental Trust Indenture dated as of April 1, 2015 (the Fourth Supplemental Original Programs Indenture and, together with the Initial Original Programs Indenture, the First Supplemental Original Programs Indenture, the Second Supplemental Original Programs Indenture, and the Third Supplemental Original Programs Indenture, the Original Programs Indenture ), between the Authority and TD Bank, N.A., as trustee (the Original Programs Trustee ). Capitalized terms used in this Official Statement with respect to the 2015B Bonds and not otherwise defined herein have the respective meanings set forth in APPENDIX B-2 DEFINITIONS OF CERTAIN TERMS AND SUMMARY OF CERTAIN PROVISIONS OF THE ORIGINAL PROGRAMS INDENTURE. 1

10 COMMONWEALTH FINANCING AUTHORITY The Authority was established in April 2004 with the enactment of the Act as an independent authority and an instrumentality of the Commonwealth whose purpose is to promote the health, safety, employment, business opportunities, economic activity and general welfare of the Commonwealth and its citizens through loans, grants, guarantees, leases, lines and letters of credit and other financing arrangements to benefit both for-profit and nonprofit entities. The Authority is authorized to issue its limited obligation revenue bonds and other types of limited obligation revenue financing to provide funding for certain activities of the Commonwealth s economic stimulus program and as otherwise authorized, including by the Alternative Energy Act and the H2O PA Act, 32 P.S et seq. (the H2O PA Act ). The Authority s bonds and finances are to be secured by revenues and accounts of the Authority, including funds appropriated to the Authority from general revenues of the Commonwealth for repayment of Authority obligations. The Authority has no power to pledge the credit or taxing power of the Commonwealth or any political subdivision thereof. No obligations of the Authority shall be deemed to be obligations of the Commonwealth or any political subdivision thereof. The Authority has no taxing power. The Authority has a number of other bond issues outstanding and may issue others from time to time. Other than Additional Bonds, such bonds are or would be issued under indentures other than the Energy Indenture and the Original Programs Indenture and are secured separately from the 2015A Bonds and the 2015B Bonds, respectively. The Act provides that the powers of the Authority shall be exercised by a governing body composed of seven members, consisting of the Secretary of Community and Economic Development or a designee, the Secretary of the Budget or a designee, the Secretary of Banking and Securities or a designee, and four legislative appointees, one of whom shall be appointed by each of the President Pro Tempore of the Senate, the Minority Leader of the Senate, the Speaker of the House of Representatives and the Minority Leader of the House of Representatives. All legislative appointees serve at the pleasure of their respective appointing authorities. ALTERNATIVE ENERGY ACT The Alternative Energy Act establishes the Alternative Energy Development Program which includes: Funds for the Ben Franklin Technology Development Authority (the Ben Franklin Authority ) to be used for energy-related investments to support early-stage activities to develop and implement alternative energy and energy efficiency technologies. Grants to certain coal electric generating or cogeneration units for pollution control projects (administered by the Pennsylvania Department of Environmental Protection (the PA DEP )). An annual deposit to the Emergency Energy Assistance Fund held by the Pennsylvania Department of Public Welfare. Grants, loans, reimbursements or rebates to individual residents or small businesses for solar energy projects (administered by the PA DEP). Loans or grants by the Authority for clean energy projects, alternative energy production projects, geothermal technologies, wind energy projects, high performance buildings and solar energy projects. Recipients, depending on the project, can include individuals, businesses, political subdivisions and nonprofit economic development organizations. In order to finance the Alternative Energy Development Program, the Alternative Energy Act provides for the Authority to incur indebtedness in an amount up to $500 million (plus payment of all reasonable costs and expenses related to the issuance of such indebtedness) and for the annual appropriation of up to $40 million per each fiscal year through the fiscal year to pay debt service on such indebtedness. The Authority previously issued its Fixed Rate (Federally Taxable) Revenue Bonds, Series A of 2009, in the aggregate principal amount of 2

11 $50,000,000, its Fixed Rate (Tax-Exempt) Revenue Bonds, Series B of 2009, in the aggregate principal amount of $50,000,000, its Fixed Rate (Federally Taxable) Revenue Bonds, Series A of 2010, in the aggregate principal amount of $62,000,000, its Fixed Rate (Tax-Exempt) Revenue Bonds, Series B of 2010, in the aggregate principal amount of $80,000,000, its Revenue Bonds (Federally Taxable), Series A-1 of 2013 in the aggregate principal amount of $75,000,000 and its Revenue Bonds (Tax-Exempt), Series A-2 of 2013 in the aggregate principal amount of $48,000,000 (collectively, the Prior Energy Bonds ), under the provisions of the Alternative Energy Act. The 2015A Bonds represent additional authorized indebtedness for the Alternative Energy Development Program. Upon issuance of the 2015A Bonds, the Authority will have $429,255,000 in Bonds Outstanding under the Energy Indenture. See Appendix A hereto, entitled FINANCIAL AND OTHER INFORMATION RELATING TO THE COMMONWEALTH for additional information on the Authority and the funding of the Alternative Energy Development Program. ORIGINAL PROGRAMS UNDER THE ACT The Act authorizes the Authority fund economic stimulus programs established in the Act (collectively, the Original Programs ), consisting of the Business in Our Sites program and other programs authorized by the Act, including, without limitation, the First Industries program, New Pennsylvania Venture Capital Investment program, and the Building Pennsylvania program. The Business in Our Sites program provides financial assistance for the preparation of sites located within the Commonwealth for future development; the First Industries program provides financial assistance to projects related to tourism and agriculture; the New Pennsylvania Venture Capital Investment program provides funds for loans to venture capital fund managers to invest in early stage or mid-stage Pennsylvania research and development companies; and the Building Pennsylvania program provides funds to make loans to real estate fund managers for investment in building projects. The Authority issued under the Original Programs Indenture its Fixed Rate (Tax-Exempt) Revenue Bonds, Series A of 2005 (all or a portion of which will be refunded with proceeds of the 2015B-1 Bonds), in the aggregate principal amount of $62,500,000, its Fixed Rate (Federally Taxable) Revenue Bonds, Series B of 2005 (all or a portion of which will be refunded with proceeds of the 2015B-2 Bonds), in the aggregate principal amount of $125,000,000, its Fixed Rate (Tax-Exempt) Revenue Bonds, Series A of 2006 (all or a portion of which will be refunded with proceeds of the 2015B-1 Bonds), in the aggregate principal amount of $45,000,000, its Fixed Rate (Federally Taxable) Revenue Bonds, Series B of 2006, in the aggregate principal amount of $142,500,000, its Fixed Rate (Federally Taxable) Revenue Bonds, Series C of 2006, in the aggregate principal amount of $187,500,000, and its Fixed Rate (Federally Taxable) Revenue Bonds, Series A of 2008, in the aggregate principal amount of $187,500,000 to fund economic stimulus programs established in the Act (collectively, the Prior Original Programs Bonds ). Upon issuance of the 2015B Bonds, the Authority will have $540,670,000 in Bonds Outstanding under the Original Programs Indenture. As of June 30, 2014, the Board of the Authority had approved funding in excess of $576 million in grants and loans for projects including the following: $300 million for projects in the Business in Our Sites program, $150 million for projects in the First Industries program, $56.4 million for projects in the New Pennsylvania Venture Capital Investment program, and $69.5 million in allocations to fund managers under the Building Pennsylvania program. The Act places annual and aggregate limitations on the incurring of debt by the Authority to fund portions of the Original Programs. Such limitations include a fiscal year limitation, which is reduced by the aggregate amount of indebtedness incurred by the Commonwealth for certain water supply and wastewater infrastructure programs, and a provision that no more than an aggregate of $1.135 billion of indebtedness may be incurred by the Authority for all the programs authorized by the Act. See SECURITY FOR THE 2015 BONDS Appropriations to the Authority General and Historical Appropriations to the Authority for additional information on the Authority and the funding of the Original Programs. 3

12 PLAN OF FINANCE The proceeds from the sale of the 2015A Bonds will be used to (i) to provide additional funding for the Alternative Energy Development Program authorized by the Alternative Energy Act and other Project Costs (as defined herein) for program-related administration, and (ii) pay the costs of issuing the 2015A Bonds. Subsequent to the issuance of the 2015A Bonds, the Authority does not expect to incur additional indebtedness related to the Alternative Energy Development Program, except for Bonds issued for refunding purposes. The proceeds from the sale of the 2015B Bonds will be used to (i) refund all or a portion of the Prior Original Program Bonds described below (the Refunded Bonds ), and (ii) pay the costs of issuing the 2015B Bonds. The Authority does not expect to incur additional indebtedness related to the Original Programs, except for Bonds issued for refunding purposes. Refunded Bonds Series Maturity (June 1) Principal Amount Redemption/ Payment Date Redemption Price Original CUSIP Numbers * Series A of $ 6,860,000 June 1, % 20281PAA0 Series A of ,895,000 June 1, PAB8 Series A of ,535,000 June 1, PAC6 Series A of ,250,000 June 1, PAD4 Series A of ,960,000 June 1, PAE2 Series B of ,240,000** June 1, 2015 N/A 20281PAP7 Series A of ,325,000 June 1, PAX0 Series A of ,535,000 June 1, PAY8 Series A of ,215,000 June 1, PAZ5 Series A of ,925,000 June 1, PBA9 Total $110,740,000 * Copyright, American Bankers Association. CUSIP numbers were assigned by Standard & Poor s, CUSIP Service Bureau and are provided solely for convenience. The Authority is not responsible for the selection or uses of these CUSIP numbers, nor is any representation made as to their correctness on the Refunded Bonds or as indicated above. The CUSIP numbers have been and are subject to change after the original issuance of the Refunded Bonds as a result of various subsequent actions including, but not limited to, any refunding. ** Partial refunding of the June 1, 2015 maturity issued in the original principal amount of $9,000,000. Refunding Program Upon delivery and issuance of the 2015B Bonds by the Authority, a portion of the proceeds thereof will be used to provide for the refunding and redemption or payment at maturity of the Refunded Bonds by depositing with TD Bank, N.A., as the Original Programs Trustee and escrow agent (the Escrow Agent ), pursuant to two Escrow Deposit Agreements, each dated as of the date of delivery of the Series 2015 Bonds (collectively, the Escrow Agreements ), between the Authority and the Escrow Agent, cash and non-callable, direct obligations of the United States of America (the Government Obligations ) in a principal amount which, together with such cash, will be sufficient to pay all principal, applicable redemption premiums, and interest on the Refunded Bonds to their respective redemption or payment dates. 4

13 ESTIMATED SOURCES AND USES OF FUNDS Bonds: The following are the expected sources and uses of funds with respect to the issuance of the Series 2015 SOURCES: 2015A 2015B B-2 Total Par Amount of Bonds: $ 96,000, $ 96,840, $ 3,350, $ 196,190, Net Original Issue Premium 9,611, ,183, ,795, Total Sources: $ 105,611, $ 113,023, $ 3,350, $ 221,985, USES: Deposit to Project Fund $ 104,993, $ 0.00 $ 0.00 $ 104,993, Deposit to Escrow Funds ,262, ,325, ,587, Costs of Issuance* 617, , , ,404, Total Uses: $ 105,611, $ 113,023, $ 3,350, $ 221,985, * Includes Underwriters discount, bond insurance premium, legal fees, rating agency fees and other costs of issuance. DESCRIPTION OF THE SERIES 2015 BONDS The 2015A Bonds are being issued by the Authority under the Act, the Alternative Energy Act and the Resolution and pursuant to the Energy Indenture in one series, which will be dated the date of issuance. The 2015B Bonds are being issued by the Authority under the Act, and the Resolution and pursuant to the Original Programs Indenture in two series, both of which will be dated the date of issuance. The 2015A Bonds, the 2015B-1 Bonds and the 2015B-2 Bonds will bear interest from such date payable on June 1 and December 1 of each year (each, an Interest Payment Date ), commencing June 1, 2015, until maturity or prior redemption. The 2015A Bonds, the 2015B-1 Bonds and the 2015B-2 Bonds will mature in the amounts and on the dates, and bear interest at the rates for the respective series, set forth on the inside cover page hereof. The 2015A Bonds, 2015B-1 Bonds and the 2015B-2 Bonds will be subject to the respective redemption provisions set forth herein. The Series 2015 Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. As provided in the Energy Indenture and the Original Programs Indenture, as applicable, the principal or redemption price of the Series 2015 Bonds is payable at the designated payment office of the Energy Trustee or the Original Programs Trustee, as applicable, located in Philadelphia, Pennsylvania. Interest on the Series 2015 Bonds shall be paid to the person whose name appears on the bond registration books of the Energy Trustee and the Original Programs Trustee, as applicable, as the holder thereof as of the close of business on the Record Date for each Interest Payment Date. Payment of the interest on the Series 2015 Bonds shall be made by check mailed by first class mail to such holder at its address as it appears on such registration books, or, upon the written request of any holder of at least $1,000,000 in aggregate principal amount of the 2015A Bonds or the 2015B Bonds, as applicable, submitted to the Energy Trustee or the Original Programs Trustee, as applicable, at least one business day prior to the Record Date, by wire transfer in immediately available funds to an account within the United States designated by such holder. The Record Date shall be the 15th day (whether or not a business day) of the month immediately preceding each Interest Payment Date. If the Authority defaults in the payment of interest due on any Interest Payment Date, defaulted interest will be payable to the person in whose name such Series 2015 Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Energy Trustee or the Original Program Trustee as applicable, to the Bondholders not less than ten days prior to such special record date. Such notice of the special record date will be mailed to the persons in whose names the Series 2015 Bonds are registered at the close of business on the 5th day preceding the date of mailing. Interest on the Series 2015 Bonds will be computed on the basis of a 360 day year of twelve 30-day months. Upon original issuance, the Series 2015 Bonds will be registered in the name of and held by Cede & Co., as registered holder and nominee for DTC. DTC will act as a securities depository for the Series 2015 Bonds. 5

14 Purchases of the Series 2015 Bonds will initially be made in book-entry form. See APPENDIX C BOOK-ENTRY ONLY SYSTEM herein. As long as the Series 2015 Bonds are registered in the name of DTC or its nominee, Cede & Co., payments of the principal of, redemption premium, if any, and interest on the Series 2015 Bonds will be paid directly to Cede & Co. by wire transfer on each Interest Payment Date by The Bank of New York Mellon Trust Company, N.A., as Paying Agent for the 2015A Bonds and by TD Bank, N.A., as Paying Agent for the 2015B Bonds. While the book-entry only system is in effect, transfers and exchanges of the Series 2015 Bonds will be effected through DTC s book-entry system. Redemption Optional Redemption 2015A Bonds The 2015A Bonds shall be subject to optional redemption prior to maturity, at the option of the Authority, as a whole or in part at any time on and after June 1, 2025 and at the redemption price of 100% of the principal amount to be redeemed, plus interest accrued to the redemption date. The 2015A Bonds may be redeemed in any order of maturity and in any principal amount within a maturity as selected by the Authority in its sole discretion. Optional Redemption B-1 Bonds The 2015B-1 Bonds shall be subject to optional redemption prior to maturity, at the option of the Authority, as a whole or in part at any time on and after June 1, 2025 and at the redemption price of 100% of the principal amount to be redeemed, plus interest accrued to the redemption date. The 2015B-1 Bonds may be redeemed in any order of maturity and in any principal amount within a maturity as selected by the Authority in its sole discretion. Optional Redemption 2015B-2 Bonds The 2015B-2 Bonds shall be subject to redemption either in whole or in part, at the option of the Authority, at any time, at a redemption price equal to the greater of (i) 100% of the principal amount thereof or (ii) the Discounted Value thereof, plus in either case, accrued interest thereon to the date of redemption. The 2015B-2 Bonds may be redeemed in any order of maturity and in any principal amount within a maturity as selected by the Authority in its sole discretion. All calculations and determinations referred to under this caption Optional Redemption 2015B-2 Bonds, except as provided in the preceding sentence, are expected (but not required) to be made by a financial advisor or other agent selected by the Authority for such purposes (the Calculation Agent ). Discounted Value means, with respect to each outstanding maturity of the 2015B-2 Bonds to be redeemed, the sum as determined by the Authority or the Calculation Agent of the amounts obtained by discounting all remaining scheduled payments of principal and interest (exclusive of interest accrued to the date of redemption) on such maturity from their respective scheduled payment dates to the applicable redemption date, at a yield (computed on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months) equal to the applicable Discount Yield. Discount Yield means, with respect to each maturity of the 2015B-2 Bonds to be redeemed on a particular date, the Blended Treasury Yield determined by the Authority or the Calculation Agent with respect to the 2015B-2 Bonds and maturity to be redeemed, plus 15 basis points. The Discount Yield will be calculated assuming semi-annual compounding based upon a 360-day year consisting of twelve 30-day months. Blended Treasury Yield means, with respect to the 2015B-2 Bonds of a particular maturity, the yield computed by the Authority or the Calculation Agent as the linear interpolation of two Market Treasury Yields such that the theoretical maturity that corresponds to the interpolated Market Treasury Yield equals the date that corresponds to the remaining average life of the 2015B-2 Bonds and maturity to be redeemed. The first Market Treasury Yield shall be based on an actively traded U.S. Treasury security or U.S. Treasury index whose maturity is closest to but no later than the date corresponding to the remaining average life of the 2015B-2 Bonds and maturity to be redeemed; the second Market Treasury Yield shall be based on an actively traded U.S. Treasury security or U.S. Treasury index whose maturity is closest to but no earlier than the date corresponding to the remaining average life of the 2015B-2 Bonds and maturity to be redeemed. 6

15 Market Treasury Yield means that yield, as determined by the Authority or the Calculation Agent, assuming semi-annual compounding based upon a 360-day year consisting of twelve 30-day months, which is equal to: (i) the yield for the applicable maturity of an actively traded U.S. Treasury security, reported, as of 11:00 a.m., New York City time, on the Valuation Date on the display designated as Page PX1 of the Bloomberg Financial Markets Services Screen (or, if not available, any other nationally recognized trading screen reporting online intraday trading in U.S. Treasury securities); or (ii) if the yield described in (i) above is not reported as of such time or the yield reported as of such time is not ascertainable, the most recent yield data for the applicable U.S. Treasury maturity index from the federal Reserve Statistical Release H.15 Daily Update (or any comparable or successor publication) reported, as of 11:00 a.m., New York City time, on the Valuation Date; or (iii) if the yields described in (i) and (ii) above are not reported as of such time or the yields reported as of such time are not ascertainable, the yield for the applicable maturity of any actively traded U.S. Treasury security shall be based upon the average of yield quotations for such security (after excluding the highest and lowest quotations) as of 3:30 p.m., New York City time, on the Valuation Date received from no less than five primary dealers in U.S. Government securities selected by the Authority. Each yield quotation for each actively traded U.S. Treasury security required in (i) and (iii) above shall be determined using the average of the bid and ask prices for that security. Valuation Date means the third Business Day preceding the redemption date. Selection of 2015A Bonds for Redemption. If less than all the 2015A Bonds of a particular maturity shall be called for redemption, the particular 2015A Bonds of such maturity to be redeemed shall be selected by the Energy Trustee, in authorized denominations, by lot. Selection of 2015B-1 Bonds for Redemption. If less than all the 2015B-1 Bonds of a particular maturity shall be called for redemption, the particular 2015B-1 Bonds of such maturity to be redeemed shall be selected by the Original Programs Trustee, in authorized denominations, in any manner as the Original Programs Trustee in its sole discretion shall deem appropriate. Selection of 2015B-2 Bonds for Redemption. Any redemption of less than all of the 2015B-2 Bonds of a particular maturity shall be allocated among registered holders of the 2015B-2 Bonds of such maturity as nearly as practicable in proportion to the principal amounts of the 2015B-2 Bonds of such maturity owned by each registered holder, subject to the authorized denominations applicable to the 2015B-2 Bonds. The particular 2015B-2 Bonds to be redeemed shall be determined by the Original Programs Trustee, using such method as the Original Programs Trustee shall deem fair and appropriate. So long as DTC or a successor securities depository is the sole registered holder of the 2015B-2 Bonds, any redemption of less than all of the 2015B-2 Bonds of a maturity will be done in accordance with the Security Depository s procedures in effect at such time. It is the Authority s intent that redemption allocations made by DTC, the DTC participants or such other intermediaries that may exist between the Authority and the Beneficial Owners be made in accordance with these same proportional provisions. The Authority can provide no assurance that DTC, the DTC participants or any other intermediaries will allocate redemptions among Beneficial Owners on such a proportional basis. Notice of Redemption. Notice of redemption shall be mailed by first-class mail by the Energy Trustee or the Original Programs Trustee, as applicable, not less than 30 nor more than 60 days prior to the date fixed for redemption, to the rating agencies then rating the applicable Series 2015 Bonds and to the respective holders of any Series 2015 Bonds designated for redemption at their addresses appearing on the bond registration books of the Energy Trustee or the Original Programs Trustee, as applicable. Each notice of redemption shall state the date of such notice, the date of delivery and series designation of the Series 2015 Bonds, the date fixed for redemption, the redemption price, the place or places of redemption (including the name and appropriate address or addresses of the Energy Trustee or the Original Programs Trustee, as applicable), the CUSIP number (if any) of the Series

16 Bonds, to be redeemed and, in the case of Series 2015 Bonds to be redeemed in part only, the portion of the principal amount thereof to be redeemed. Each such notice also shall state that on said date there will become due and payable on each of said Series 2015 Bonds the redemption price thereof or of said specified portion of the principal amount thereof in the case of a Series 2015 Bond to be redeemed in part only, together with interest accrued thereon to the date fixed for redemption, and that from and after such date, upon the deposit of the amounts required for such redemption, interest on such Series 2015 Bond shall cease to accrue, and shall require that such Series 2015 Bonds be then surrendered at the address or addresses of the Energy Trustee or the Original Programs Trustee, as applicable, specified in the redemption notice. Failure by the Energy Trustee or the Original Programs Trustee, as applicable, to mail notice of redemption to the rating agencies then rating the applicable Series 2015 Bonds or to any one or more of the holders of any Series 2015 Bonds designated for redemption shall not affect the sufficiency of the proceedings for redemption with respect to the holder or holders to whom such notice was mailed. Any notice of optional redemption may be conditional upon the deposit of moneys with the Energy Trustee or the Original Programs Trustee, as applicable, sufficient to effect such redemption. If the required deposit is not made in a timely manner to effect the redemption, the Energy Trustee or the Original Programs Trustee, as applicable, shall give notice that such deposit was not made, as soon thereafter as practicable, in the same manner, to the same persons, as notice of such redemption was given. Any Series 2015 Bonds and portions of Series 2015 Bonds which have been duly selected for redemption and which are paid in accordance with the Energy Indenture or the Original Programs Indenture, as applicable, shall cease to bear interest on the specified redemption date. Limited Obligation of the Authority SECURITY FOR THE SERIES 2015 BONDS The Series 2015 Bonds shall be limited obligations of the Authority and shall not constitute nor give rise to any charge against the general credit of the Authority. The Series 2015 Bonds shall not constitute a debt, liability or obligation of the Commonwealth or any political subdivision thereof and neither the full faith and credit nor the taxing power of the Commonwealth or any political subdivision thereof is pledged to the payment of the Series 2015 Bonds or the interest thereon, nor shall the Authority be obligated to pay the Series 2015 Bonds or the interest thereon except from the revenues and funds of the Authority, including the Revenues, pledged for the payment thereof under the Energy Indenture or the Original Programs Indenture, as applicable. The payments made by the Department of Community and Economic Development of the Commonwealth (the Department ) under the Energy Service Agreement and the Original Programs Service Agreement, respectively, shall be subject to the annual appropriation of funds for such purpose by the Pennsylvania General Assembly, and there can be no assurance that such funds will be appropriated in any fiscal year of the Commonwealth. The Authority has no taxing power. Repayments of loans made by the Authority with proceeds of Bonds issued under the Energy Indenture or the Original Programs Indenture do not constitute Revenues and are not available to pay debt service on the Series 2015 Bonds. Energy Service Agreement The Authority and the Commonwealth, acting through the Department, have entered into a Service Agreement dated as of May 1, 2009 (the Initial Energy Service Agreement ), as amended and supplemented by a First Amendment to Service Agreement dated as of April 15, 2010 (the First Amendment to Energy Service Agreement ), as further amended and supplemented by a Second Amendment to Service Agreement dated as of January 1, 2013 (the Second Amendment to Energy Service Agreement ), and as further amended and supplemented by a Third Amendment to Energy Service Agreement dated as of April 1, 2015 (the Third Amendment to Energy Service Agreement and, together with the Initial Energy Service Agreement, the First Amendment to Energy Service Agreement and the Second Amendment to Energy Service Agreement, the Energy Service Agreement ), pursuant to which the Authority has agreed to administer the Alternative Energy Development Program established under the Alternative Energy Act and the Department has agreed to pay to the Authority a service fee (the Energy Service Fee ) in an amount sufficient to pay the Debt Service Requirements on the 2015A Bonds and on other Bonds Outstanding under the Energy Indenture, the payments due on any other Obligations under the Energy Indenture, the amounts required to make rebate payments with respect to the 2015A Bonds and 8