CITY OF MYRTLE BEACH, SOUTH CAROLINA

Transcription

1 FULL BOOK-ENTRY ONLY NEW ISSUES NOT BANK QUALIFIED Moody s: Aa2 Standard & Poor s: AA See Ratings herein Assuming the City s continuing compliance with certain covenants, in the opinion of McNair Law Firm, P.A., Columbia, South Carolina, Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax purposes under existing statutes, regulations and court decisions. Interest on the Bonds is not a specific item of tax preference for purposes of an individual s or corporation s alternative minimum tax; however, interest on the Bonds will be taken into account in calculating adjusted current earnings for purposes of the alternative minimum tax on corporations. Under the present laws of the State of South Carolina, the Bonds and the interest thereon are exempt from all South Carolina income taxation except estate or other transfer taxes. Such opinion is subject to certain limitations and conditions described in this Official Statement under the caption LEGAL MATTERS-Tax Exemption. CITY OF MYRTLE BEACH, SOUTH CAROLINA $2,800,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011A AND $15,800,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011B Dated: Date of delivery Due: March 1, as shown below The $2,800,000 General Obligation Refunding Bonds, Series 2011A (the Series 2011A Bonds ) and the $15,800,000 General Obligation Refunding Bonds, Series 2011B (the Series 2011B Bonds and, together with the Series 2011A Bonds, the Bonds ) are general obligations of the City of Myrtle Beach, South Carolina (the City ), and as such the full faith, credit, resources and taxing power of the City are irrevocably pledged for the payment thereof. See THE BONDS-Security herein. The Bonds are issuable in fully registered form and when issued will be registered to Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ), to which principal and interest payments on the Bonds will be made. Individual purchases of the Bonds will be made in book-entry form only, in the principal amounts of $5,000 or any integral multiple thereof. So long as Cede & Co. as nominee of DTC is the registered owner of the Bonds, references herein to the holders of the Bonds or registered owners of the Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the Bonds. So long as Cede & Co. is the registered owner of the Bonds, the principal and interest on the Bonds are payable to Cede & Co., as nominee for DTC, which will in turn remit such principal and interest to the DTC Participants (as defined herein) for subsequent disbursement to the beneficial owners of the Bonds. See THE BONDS-Book-Entry Only System. U.S. Bank National Association, Columbia, South Carolina, will serve as Paying Agent and Registrar for the Bonds. The Bonds will be dated their date of delivery and will mature on March 1 in each of the years and in the principal amounts and bear interest at the rates shown on the inside cover hereof. Interest on the Bonds is first payable on March 1, 2012, and semiannually thereafter on each March 1 and September 1 until maturity or prior redemption. The Series 2011A Bonds are not subject to redemption prior to maturity. The Series 2011B Bonds are subject to redemption prior to their stated maturities as set forth herein under the heading THE BONDS-Redemption. The Bonds are offered when, as and if issued and subject to the approving opinion as to legality of McNair Law Firm, P.A., Columbia, South Carolina. It is expected that the Bonds in definitive form will be available for delivery through the facilities of DTC on or about August 19, This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision. This Official Statement is dated August 4, 2011

2 Series 2011A Bonds (March 1) Year Principal Amount Interest Rate Yield 2012 $560, % 0.20% , , , , , Series 2011B Bonds (March 1) Year Principal Amount Interest Rate Yield 2013 $ 370, % 0.35% , , , , , , ,015, ,070, ,115, c ,160, c ,215, c ,260, c ,310, c ,370, c , c c Yield to March 1, 2021 call date at 100%.

3 This Official Statement does not constitute an offering of any security other than the original offering of the Bonds identified on the front cover page hereof. No dealer, broker, salesman or any other person has been authorized by the City to give any information or to make any representation, other than those contained in this Official Statement, and if given and made, such other information or representation must not be relied upon as having been authorized by the City. 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 Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been provided by the City and other sources. The City believes that the information contained in this Official Statement is correct and complete and has no knowledge of any inaccuracy or incompleteness as to any of the information herein contained. The information and expressions of opinion herein are subject to change without notice and 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 City since the date hereof. Upon execution and delivery, the Bonds will not be registered under the Securities Act of 1933, as amended, or any state securities law, and will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal, state or other governmental entity or agency will have passed upon the accuracy or adequacy of this Official Statement or approved the Bonds for sale. The City agrees that, no more than seven business days after the date of execution of the final agreement to sell the Bonds to the underwriter and, in any event, in sufficient time to accompany confirmations requesting payment from customers, it shall provide without cost to the underwriter copies of this Official Statement in an amount sufficient to permit the underwriter to comply with Reg c2-12(b)(4) promulgated by the Securities and Exchange Commission under the 1934 Act and with the rules of the Municipal Securities Rulemaking Board. Certain information contained in this Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness or accuracy. U.S. Bank National Association, as Paying Agent, has not provided, or undertaken to determine, the accuracy of any of the information contained in this Official Statement and makes no representation or warranty, express or implied, as to (i) the accuracy or completeness of such information, (ii) the validity of the Bonds; or (iii) the tax exempt status of the interest on the Bonds. No quotations from or summaries or explanations of provisions of laws and documents herein purport to be complete, and reference is made to such laws and documents for full and complete statements of their provisions. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or owners of any of the Bonds. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not expressly so stated, are intended merely as estimates or opinions and not as representations of fact. The cover page hereof and the appendices attached hereto are part of this Official Statement.

4 CITY OF MYRTLE BEACH CITY COUNCIL MAYOR John B. Rhodes COUNCIL Philip N. Render, Mayor Pro Tempore Michael Chestnut W. Wayne Gray Clyde H. Mike Lowder Susan Grissom Means Randal G. Wallace Thomas E. Leath City Manager Michael W. Shelton, CGFO Budget and Evaluation Director Maria E. Baisden Finance Director Thomas E. Ellenburg, Esquire City Attorney

5 TABLE OF CONTENTS SUMMARY STATEMENT... i INTRODUCTION... 1 THE BONDS... 1 DESCRIPTION... 1 BOOK-ENTRY ONLY SYSTEM... 1 DISCONTINUATION OF BOOK-ENTRY TRANSFER SYSTEM... 4 REGISTRATION AND TRANSFER... 4 REDEMPTION... 4 AUTHORIZATION... 5 DEFEASANCE... 5 PLAN OF REFUNDING... 6 SOURCES AND USES OF FUNDS... 7 SECURITY... 7 THE CITY OF MYRTLE BEACH, SOUTH CAROLINA... 8 LEGAL MATTERS... 8 LITIGATION... 8 TAX EXEMPTION... 8 PREMIUM BONDS... 9 LEGALITY... 9 UNITED STATES BANKRUPTCY CODE CONTINUING DISCLOSURE MISCELLANEOUS CERTIFICATE AS TO THE OFFICIAL STATEMENT UNDERWRITING RATINGS VERIFICATION OF ARITHMETIC AND MATHEMATICAL ACCURACY OF ESCROW FINANCIAL ADVISOR APPENDIX A THE CITY OF MYRTLE BEACH, SOUTH CAROLINA APPENDIX B FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2010 APPENDIX C APPENDIX D FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT FORMS OF APPROVING OPINIONS OF BOND COUNSEL

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7 SUMMARY STATEMENT The following Summary Statement is qualified in its entirety by the more detailed information and financial statements contained elsewhere in this Official Statement and the Appendices hereto (collectively, the Official Statement ). The offering of the Bonds to potential investors is made only by means of this entire Official Statement, and no person is authorized to detach this Summary Statement from the Official Statement or to otherwise use it without the entire Official Statement. The Issuer The Bonds Dated Date and Date of Delivery of Bonds Interest Payments Maturities Redemption Security The City of Myrtle Beach, South Carolina (the City ), a body politic and corporate and a political subdivision of the State of South Carolina (the State ), was incorporated as a town in 1937 and as a city in The City is located on the coast of the State, approximately 23 miles south of the North Carolina boundary and 90 miles north of Charleston, South Carolina. It encompasses approximately 23.3 square miles. The City is located in Horry County, South Carolina (the County ). See Appendix A- THE CITY OF MYRTLE BEACH, SOUTH CAROLINA. The $2,800,000 City of Myrtle Beach, South Carolina, General Obligation Refunding Bonds, Series 2011A (the Series 2011A Bonds ) and the $15,800,000 City of Myrtle Beach, South Carolina, General Obligation Refunding Bonds, Series 2011B (the Series 2011B Bonds and, together with the Series 2011A Bonds, the Bonds ) are being issued as fully registered bonds in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ), in principal amounts of $5,000 or any integral multiple thereof. See THE BONDS- Description. The Bonds will be initially dated their date of delivery. It is expected that the Bonds in definitive form will be available for delivery through the facilities of DTC on or about August 19, Interest on the Bonds is first payable on March 1, 2012, and semiannually thereafter on March 1 and September 1 of each year until maturity or prior redemption. See THE BONDS Description. The Series 2011A Bonds mature serially on March 1, 2012 through 2017 and the Series 2011B Bonds mature serially on March 1, 2013 through 2028, as indicated on the inside front cover page hereof. The Series 2011A Bonds are not subject to redemption prior to maturity. The Series 2011B Bonds maturing on or after March 1, 2022 are subject to redemption at the option of the City on or after March 1, 2021 at a redemption price equal to the principal amount of the Series 2011B Bonds to be redeemed plus interest accrued to the redemption date. See THE BONDS-Redemption. The Bonds will constitute binding general obligations of the City and the full faith, credit and taxing power of the City are irrevocably pledged for the payment of the Bonds. There shall be levied and collected annually in the same manner as other City taxes are levied and collected, an ad valorem tax, without limitation as to rate or amount, on all taxable property in the City sufficient to pay the principal and interest of the Bonds as they mature and to create such sinking fund as may be necessary therefor. i

8 Purpose of the Issue The Series 2011A Bonds are being issued to currently refund $1,720,000 outstanding principal amount of the City's $5,000,000 original principal amount General Obligation Bonds, Series 1999, dated September 1, 1999, and $1,165,000 outstanding principal amount of its $2,460,000 original principal amount General Obligation Bonds, Series 2001, dated December 1, The Series 2011B Bonds are being issued to advance refund $3,570,000 outstanding principal amount of the City s $4,900,000 original principal amount General Obligation Bonds, Series 2002A, dated May 1, 2002; $4,590,000 outstanding principal amount of its $6,270,000 original principal amount General Obligation Bonds, Series 2002B, dated May 1, 2002 and $8,380,000 outstanding principal amount of its $11,200,000 original principal amount General Obligation Bonds, Series 2003A, dated August 1, See THE BONDS-Plan of Refunding. Tax Status of Interest on the Bonds Professionals Involved in the Offering Continuing Disclosure Information Concerning Terms of the Offering Assuming the City's continued compliance with certain covenants, in the opinion of McNair Law Firm, P.A., Columbia, South Carolina, Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax purposes under existing statutes, regulations and court decisions. Interest on the Bonds is not a specific item of tax preference for purposes of an individual's alternative minimum tax; however, interest on the Bonds will be taken into account in calculating adjusted current earnings for purposes of calculating alternative minimum tax on corporations. Under the present laws of the State, the Bonds and the interest thereon will also be exempt from all State income taxation except estate or other transfer and certain franchise taxes. Such opinion is subject to certain limitations and conditions described in this Official Statement under the caption LEGAL MATTERS-Tax Exemption. U.S. Bank National Association, Columbia, South Carolina, is serving as Registrar/Paying Agent. Wells Fargo Securities, Charlotte, North Carolina, is serving as Financial Advisor. McNair Law Firm, P.A., Columbia, South Carolina, is serving as Bond Counsel. Certain legal matters will be passed upon for the City by its counsel, Thomas E. Ellenburg, Esquire, Myrtle Beach, South Carolina. In accordance with Securities and Exchange Commission Rule 15c2-12(b)(5), the City has covenanted in the Bond Ordinances (as defined herein) to execute and deliver prior to closing, and to thereafter comply with the terms of, a Disclosure Dissemination Agent Agreement in substantially the form attached hereto as Appendix C. See LEGAL MATTERS-Continuing Disclosure and Appendix C- FORM OF DISCLOSURE DISSEMINATION AGENT AGREEMENT. The Bonds are being issued pursuant to and in accordance with the Constitution and laws of the State, including Article X, Section 14 of the Constitution of the State of South Carolina 1895, as amended; Title 5, Chapter 21, Article 5, Code of Laws of South Carolina 1976, as amended; Title 11, Chapter 15, Article 5, Code of Laws of South Carolina 1976, as amended; Title 11, Chapter 21, Code of Laws of South Carolina 1976, as amended; Title 11, Chapter 27, Code of Laws of South Carolina 1976, as amended; Ordinance No duly enacted by the City Council of the City on July 12, 2011 authorizing the issuance of the Series 2011A Bonds (the Series 2011A Bond Ordinance ); and Ordinance No duly enacted by the City Council of the City on July 12, 2011, authorizing the issuance of the Series 2011B Bonds (the Series 2011B Bond Ordinance and, together with the Series 2011A Bond Ordinance, the Bond Ordinances ). ii

9 General This Official Statement speaks only as of its date, and the information contained herein is subject to change. Copies of the Preliminary Official Statement and the Official Statement will be deposited with the Municipal Securities Rulemaking Board, 1900 Duke Street, Suite 600, Alexandria, Virginia Copies of the Preliminary Official Statement, the Official Statement, the Bond Ordinances and other relevant documents and information regarding the documents are available from the City c/o Mr. Michael W. Shelton, Budget and Evaluation Director, City of Myrtle Beach, Post Office Drawer 2468, Myrtle Beach, South Carolina , telephone (843) The Official Statement, including the cover page and the attached Appendices, contains specific information relating to the Bonds and the City and other information pertinent to this issue. All information included herein has been provided by the City except where attributed to other sources. The summaries and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such reference or summary is qualified in its entirety by reference to each such document, statute, report or other instrument. iii

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11 CITY OF MYRTLE BEACH, SOUTH CAROLINA $2,800,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011A AND $15,800,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011B INTRODUCTION This Official Statement is provided for the purpose of furnishing certain information in connection with the public invitation for bids for the purchase of $2,800,000 General Obligation Refunding Bonds, Series 2011A (the Series 2011A Bonds ), and $15,800,000 General Obligation Refunding Bonds, Series 2011B (the Series 2011B Bonds and, together with the Series 2011A Bonds, the Bonds ), of the City of Myrtle Beach, South Carolina (the City ). This Official Statement has been prepared under the supervision of Mr. Michael W. Shelton, Budget and Evaluation Director. The information furnished herein (including the Appendices hereto) includes a brief description of the Bonds, the City and its indebtedness, tax information, economic data, financial information and other matters. Also included are certain information and data pertaining to Horry County, South Carolina (the County ) and the State of South Carolina (the State ). Description THE BONDS The Bonds will be general obligation bonds of the City; will be issuable in fully registered form, book-entry only; will be dated their date of delivery; will bear interest from their date at the rates shown on the inside front cover page hereof payable initially on March 1, 2012, and semiannually thereafter on March 1 and September 1 of each year until maturity or prior redemption; and will mature on March 1 in each of the years and in the principal amounts as shown on the inside front cover page hereof. Book-Entry Only System Unless and until the book-entry only system has been discontinued, the Bonds will be available only in book-entry form in principal amounts of $5,000 or any integral multiple thereof. The Depository Trust Company, New York, New York ( DTC ), will act as securities depository for the Bonds. The bonds will be issued initially as fully registered Bonds registered in the name of Cede & Co., DTC s partnership nominee. One fully registered Bond will be issued for each series and maturity of Bonds and will be deposited with DTC. Beneficial ownership interests in the Bonds will be available only in book-entry form. Beneficial owners of the Bonds ( Beneficial Owners ) will not receive physical Bond certificates representing their interests in the Bonds purchased. So long as DTC or its nominee is the registered owner of the Bonds, references in this Official Statement to the Holders of the Bonds shall mean DTC or its nominee and shall not mean the Beneficial Owners. Unless and until the book-entry only system has been discontinued, the Bonds will be available only in book-entry form in principal amounts of $5,000 or any integral multiple thereof. THE FOLLOWING DESCRIPTION OF DTC, ITS PROCEDURES AND RECORDKEEPING ON BENEFICIAL OWNERSHIP INTERESTS IN THE BONDS, PAYMENT OF INTEREST AND 1

12 OTHER PAYMENTS ON THE BONDS TO DTC PARTICIPANTS (AS DEFINED HEREIN) OR TO BENEFICIAL OWNERS, CONFIRMATION AND TRANSFER OF BENEFICIAL OWNERSHIP INTERESTS IN THE BONDS AND OF OTHER TRANSACTIONS BY AND BETWEEN DTC, DTC PARTICIPANTS AND BENEFICIAL OWNERS IS BASED ON INFORMATION FURNISHED BY DTC. DTC Participants and Indirect Participants. DTC, the world s largest depository, is a limitedpurpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 2.2 million U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of certificated Bonds. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the Indirect Participants ). DTC has Standard & Poor s (hereinafter defined) highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Beneficial Owners. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchases. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that the use of the book-entry only system for the Bonds is discontinued. Transfers and Exchanges. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co., or such other nominee, do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds. DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 2

13 Conveyance of notices and other communications by DTC to Direct Participants; by Direct Participants to Indirect Participants; and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to applicable Bond Ordinance (hereinafter defined). For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Notices; Redemption. Redemption notices shall be sent to DTC. If less than all of the Bonds of a series are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in the Bonds of the series to be redeemed. Consents and Voting. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Registrar, as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and Interest Payments. Redemption proceeds, principal and interest payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Registrar and Paying Agent, on the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent, the Registrar or the City subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying Agent, and disbursements of such payments to the Direct Participants will be the responsibility of DTC, and disbursements of such payments to Beneficial Owners will be the responsibility of the Direct and Indirect Participants. DTC may discontinue providing its services as depository for the Bonds at any time by giving reasonable notice to the Registrar or the City. Under such circumstances, in the event that a successor depository is not obtained, Bonds are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered to DTC. THE CITY CAN GIVE NO ASSURANCE THAT DIRECT AND INDIRECT PARTICIPANTS WILL PROMPTLY TRANSFER PAYMENTS TO BENEFICIAL OWNERS. THE CITY AND THE REGISTRAR AND PAYING AGENT HAVE NO RESPONSIBILITY OR OBLIGATION TO THE DTC PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT, OR THE MAINTENANCE OF ANY RECORDS; (2) THE PAYMENT BY DTC OR 3

14 ANY DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE BONDS, OR THE SENDING OF ANY TRANSACTION STATEMENTS; (3) THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC OR ANY DTC PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE ORDINANCES AUTHORIZING THE ISSUANCE OF SUCH BONDS TO BE GIVEN TO BENEFICIAL OWNERS; (4) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENTS UPON ANY PARTIAL REDEMPTION OF THE BONDS; OR (5) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ITS NOMINEE AS THE REGISTERED OWNER OF THE BONDS, INCLUDING ANY ACTION TAKEN PURSUANT TO AN OMNIBUS PROXY. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. Discontinuation of Book-Entry Transfer System DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Registrar or the City. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The Beneficial Owners of the Bonds, upon registration of certificates held in the Beneficial Owners' names, will become the holders of the Bonds and the Bonds thereupon delivered will be subject to registration and transfer as described below. Registration and Transfer In the event of the discontinuation of the book-entry only system of transfers with respect to the Bonds, each Bond shall be transferable only upon the books of registry of the City, which shall be kept for such purpose at the office of the Registrar, by the registered owner thereof in person or by his duly authorized attorney upon surrender thereof together with a written instrument of transfer satisfactory to the Registrar duly executed by the registered owner or his duly authorized attorney. The City, the Registrar and the Paying Agent may deem or treat the person in whose name any fully registered Bond shall be registered upon the books of registry as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of the principal of and interest on such Bond and for all other purposes and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Registrar shall be affected by any notice to the contrary. Neither the City nor the Registrar shall be obliged to make any such transfer of Bonds during the 15 days preceding an interest payment date on such Bonds. Redemption Optional Redemption The Series 2011A Bonds are not subject to redemption prior to maturity. The Series 2011B Bonds maturing on March 1, 2022 and thereafter shall be subject to redemption prior to maturity, at the option of the City, on and after March 1, 2021, in whole or in part at any time, upon notice as hereinafter 4

15 provided, at a redemption price equal to the principal amount of such Series 2011B Bonds to be so redeemed, plus interest accrued to the redemption date. Selection of Bonds for Redemption; Notice of Redemption In the event less than all of the Series 2011B Bonds are to be redeemed, the Series 2011B Bonds shall be redeemed in such order of maturities as shall be determined by the City. If less than all of the Series 2011B Bonds of a maturity are called for redemption, the Series 2011B Bonds of such maturity to be redeemed shall be selected by lot by the Registrar. So long as the Series 2011B Bonds are held in book-entry only form, notices of redemption will be given as provided under Book-Entry Only System above. Should the Series 2011B Bonds no longer be held in book-entry only form, notice of the redemption thereof, describing the Series 2011B Bond and specifying the redemption date and the redemption price payable upon such redemption, shall be mailed by the Registrar by first-class mail, postage prepaid, to the registered owner thereof not less than 30 days and not more than 60 days prior to the redemption date at the last address appearing upon the books of registry. If Series 2011B Bonds are redeemable and shall have been duly called for redemption and notice of the redemption thereof mailed as aforesaid, and if on or before the date fixed for such redemption, payment thereof shall have been duly made or provided for, interest thereon shall cease to accrue from and after the redemption date thereof. Authorization The Bonds are being issued pursuant to and in accordance with the Constitution and laws of the State, including Article X, Section 14 of the Constitution of the State of South Carolina 1895, as amended; Title 5, Chapter 21, Article 5, Code of Laws of South Carolina 1976, as amended; Title 11, Chapter 15, Article 5, Code of Laws of South Carolina 1976, as amended (the Refunding Act ); Title 11, Chapter 21, Code of Laws of South Carolina 1976, as amended; Title 11, Chapter 27, Code of Laws of South Carolina 1976, as amended; Ordinance No duly enacted by the City Council of the City (the City Council ) on July 12, 2011 authorizing the issuance of the Series 2011A Bonds; and Ordinance No duly enacted by the City Council of the City on July 12, 2011 authorizing the issuance of the Series 2011B Bonds (together, the Bond Ordinances ). Defeasance If all of the Bonds issued pursuant to a Bond Ordinance shall have been paid and discharged, then the obligations of the City thereunder, and all other rights granted thereby shall cease and determine. Bonds shall be deemed to have been paid and discharged under any of the following circumstances: (i) (ii) such Bonds shall have been purchased by the City and surrendered to the City for cancellation or otherwise surrendered to the City or the Registrar/Paying Agent and are canceled or subject to cancellation by the City or the Registrar/Paying Agent; or payment of the principal of and interest on such Bonds either (1) shall have been made or caused to be made in accordance with the terms thereof; or (2) shall have been provided for by irrevocably depositing with the Registrar/Paying Agent in trust and irrevocably set aside exclusively for such payment: (a) moneys sufficient to make such payment or (b) Government Obligations (as defined below) maturing as to principal and interest in such amounts and at such times as will ensure the availability of sufficient moneys to make such payment and all necessary and proper fees, compensation and expenses of the Registrar/Paying Agent. 5

16 At such time as Bonds shall no longer be deemed to be outstanding under the applicable Bond Ordinance, such Bonds shall cease to draw interest from the due date thereof and, except for purposes of any such payment from such moneys or Government Obligations as set forth in (ii) above, shall no longer be secured by or entitled to the benefits of the applicable Bond Ordinance. Government Obligations shall mean any of the following: (a) non-callable, direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States; and (b) noncallable, US. Treasury Securities - State and Local Government Series ( SLGS ). Plan of Refunding The City has previously issued $5,000,000 original principal amount of its General Obligation Bonds, Series 1999, dated September 1, 1999, presently outstanding in the principal amount of $1,720,000 and $2,460,000 original principal amount of its General Obligation Bonds, Series 2001, dated December 1, 2001, presently outstanding in the principal amount of $1,165,000. The Series 2011A Bonds are being issued to effect the refunding of the $1,720,000 principal amount Series 1999 Bonds maturing in March 1, 2012 through 2015 and the $1,165,000 principal amount Series 2001 Bonds maturing in March 1, 2012 through The City has previously issued $4,900,000 original principal amount of its General Obligation Bonds, Series 2002A, dated May 1, 2002, presently outstanding in the principal amount of $3,725,000; $6,270,000 original principal amount of its General Obligation Bonds, Series 2002B, dated May 1, 2002, presently outstanding in the principal amount of $4,790,000 and $11,200,000 General Obligation Bonds, Series 2003A, dated August 1, 2003, presently outstanding in the principal amount of $9,155,000. The Series 2011B Bonds are being issued to effect the advance refunding of the $3,570,000 principal amount Series 2002A Bonds maturing in March 1, 2013 through 2027; the $4,590,000 principal amount Series 2002B Bonds maturing in March 1, 2013 through 2027; and $8,380,000 principal amount Series 2003A Bonds maturing in March 1, 2014 through In order to accomplish the refunding of the Refunded Bonds, a portion of the proceeds from the sale of the Bonds will be deposited in a Escrow Deposit Fund (the Escrow Deposit Fund ) held by U.S. Bank National Association, acting as Escrow Agent (the Escrow Agent ). The amount so deposited in the Refunding Trust Fund will be invested in U.S. government obligations and applied to pay the principal of and interest on the Refunded Bonds to and upon the redemption dates thereof. Moneys will be irrevocably pledged under the Escrow Deposit Agreement to the payment of the principal of and interest on the Refunded Bonds. The Refunded Bonds will be legally defeased and no longer outstanding upon the completion of the refunding. See VERIFICATION OF ARITHMETIC AND MATHEMATICAL ACCURACY OF ESCROW for information regarding verification of the accuracy and sufficiency of the amounts deposited into the Escrow Fund. 6

17 Sources and Uses of Funds The proceeds of the sale of the Bonds are expected to be used as follows: Estimated Sources Estimated Uses Series 2011A Bonds Series 2011B Bonds Principal Amount of Bonds $2,800,000 $15,800,000 Net Premium 119,648 1,735,937 City Moneys 65, ,288 Total Sources of Funds $2,984,992 $17,914,225 Deposit to Escrow Deposit Fund $2,962,013 $17,717,289 Costs of Issuance (1) 22, ,936 Total Uses of Funds $2,984,992 $17,914,225 (1) Includes the allocable portion of certain legal, accounting, underwriting, and other financing expenses. Security The Bonds are binding general obligations of the City and the full faith, credit and taxing power of the City are irrevocably pledged for the payment of the Bonds. There shall be levied and collected annually in the same manner as other City taxes are levied and collected, an ad valorem tax, without limitation as to rate or amount, on all taxable property in the City sufficient to pay the principal and interest of the Bonds as they respectively mature and to create such sinking fund as may be necessary therefor. In addition, Article X, Section 14, Paragraph (5) of the State Constitution provides: If at any time any political subdivision shall fail to effect the punctual payment of the principal and interest of its general obligation debt, the State Treasurer shall withhold from such political subdivision sufficient moneys from any state appropriation to which such political subdivision may be entitled and apply so much as shall be necessary to the payment of the principal and interest on the indebtedness of the political subdivision then due. The pledge of the City's full faith, credit and taxing power is an essential obligation of the contract between the City and its bondholders and could be enforced by mandamus or other equitable remedies. Similar action could be taken to require the State Treasurer to fulfill the duty imposed upon him by the provision of Article X referred to above. For its Fiscal Year ended June 30, 2011 (the 2011 Fiscal Year ), the City estimates that it received approximately $1,437,903 in State appropriations. The following table shows the amount of State General Fund appropriations subject to being so withheld which were received by the City for the preceding five Fiscal Years: 7

18 Fiscal Year Ended June 30, Amount Received 2010 $1,098, ,217, ,282, ,128, ,131,193 THE CITY OF MYRTLE BEACH, SOUTH CAROLINA See Appendix A- THE CITY OF MYRTLE BEACH, SOUTH CAROLINA, for financial, statistical and demographic information with respect to the City. Also included in Appendix A are certain information and data pertaining to the County and the State. See Appendix B FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2010, for the financial statements of the City for the Fiscal Year then ended. Litigation LEGAL MATTERS There is no controversy or litigation of any nature now pending or, to the knowledge of the City, threatened to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or the issuance of the Bonds, or the levy and collection of taxes to pay the Bonds; or questioning the proceedings or authority pursuant to which the Bonds are issued and taxes levied; or questioning or relating to the validity of the Bonds, or contesting the corporate existence of the City or the titles of its present officers to their respective offices. The absence of such litigation will be confirmed at the time of delivery of the Bonds. Tax Exemption Internal Revenue Code of 1986 The Internal Revenue Code of 1986, as amended (the Code ), includes provisions that relate to tax-exempt obligations, such as the Bonds, including, among other things, permitted uses and investment of the proceeds of the Bonds and the rebate of certain net arbitrage earnings from the investment of such proceeds to the United States Treasury. Noncompliance with these requirements may result in interest on the Bonds becoming subject to federal income taxation retroactive to the date of issuance of the Bonds. The City has covenanted to comply with the requirements of the Code to the extent required to maintain the exclusion of interest on the Bonds from gross income for federal tax purposes. Failure of the City to comply with the covenant could cause the interest on the Bonds to be taxable retroactively to the date of issuance. The Code imposes an alternative minimum tax on a taxpayer's alternative minimum taxable income. Interest on the Bonds is not a specific item of tax preference for purposes of the individual and corporate alternative minimum tax. However, interest on the Bonds will be taken into account in the calculation of adjusted net book income or adjusted current earnings of a corporation for purposes of computing the alternative minimum tax imposed on corporations. 8

19 Other Tax Matters Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or railroad retirement benefits, certain S corporations with excess net passive income, foreign corporations subject to the branch profits tax, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry the Bonds. Bond Counsel will not express an opinion regarding such collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors as to collateral federal income tax consequences. South Carolina Taxation The interest on the Bonds is exempt from all State taxation except estate or other transfer taxes. Section of the South Carolina Code of Laws of South Carolina 1976, as amended, imposes upon every bank engaged in business in the State a fee or franchise tax computed at the rate of 4-1/2% of the entire net income of such bank. Regulations of the Department of Revenue require that the term entire net income includes income derived from any source whatsoever including interest on obligations of any state and any political subdivision thereof. Interest on the Bonds will be included in such computation. Premium Bonds BOSC, Inc. (the Series 2011A Purchaser ) and Hutchinson, Shockey, Erley & Co. (the Series 2011B Purchaser ) have advised that the Bonds have been sold at initial public offering prices which are greater than the amount payable at maturity (the Premium Bonds ). An amount equal to the excess of the purchase price of the Premium Bonds over their stated redemption prices at maturity constitutes premium on such Premium Bonds. A purchaser of a Premium Bond must amortize any premium over such Bond's term using constant yield principles, based on the purchaser s yield to maturity. As premium is amortized, the purchaser s basis in such Premium Bond is reduced by a corresponding amount, resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Premium Bond prior to its maturity. Even though the purchaser s basis is reduced, no federal income tax deduction is allowed. Purchasers of any Bonds at a premium, whether at the time of initial issuance or subsequent thereto, should consult with their own tax advisors with respect to the determination and treatment of premium for federal income tax purposes and with respect to state and local tax consequences of owning such Premium Bonds. Legality The final approving opinions of Bond Counsel, in substantially the forms attached hereto as Appendix D, will be furnished without charge to the purchasers of the Bonds at the time of their delivery. The proceedings provide that the opinion to be rendered by Bond Counsel upon the validity of the Bonds will be printed on the back of or attached to each Bond. Bond Counsel has assisted the City by compiling certain information supplied to it by the City and others and included in this Official Statement, but has not made an independent investigation or verification of the accuracy, completeness or fairness of such information. The opinion of Bond Counsel will be limited solely to the legality and enforceability of the Bonds, and no opinion will be given with respect to this Official Statement. 9

20 United States Bankruptcy Code The undertakings of the City should be considered with reference to Chapter 9 of the United States Bankruptcy Code, 11 U.S.C. Section 901, et seq., as amended (the Bankruptcy Code ), and other laws affecting creditors' rights and public instrumentalities generally. Chapter 9 permits a municipality, a political subdivision, public agency or other instrumentality of a state that is insolvent or unable to meet its debts as such debts mature to file a petition in the United States Bankruptcy Court for the purpose of effecting a plan to adjust its debts; directs such a petitioner to file with the court a list of its creditors; provides that the filing of the petition under that Chapter 9 operates as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner but does not limit or impair the power of a state to control a municipality by legislation; directs a petitioner to file a plan for the adjustment of its debts; permits the petitioner in its plan to modify the rights to payment of its creditors; and provides that the plan must be accepted in writing by or on behalf of creditors of each class of claims holding at least two-thirds in amount and more than one-half in number of the creditors which have accepted or rejected the plan. The plan may be confirmed notwithstanding the negative vote of one or more classes of claims if the court finds that the plan is in the best interest of creditors, is feasible, and is fair and equitable with respect to the dissenting classes of creditors. A petitioner has the right to reinstate or otherwise modify indebtedness under its plan varying from the original maturity schedule of such indebtedness notwithstanding any provision in the documents under which the indebtedness arose relating to the insolvency or financial condition of the debtor before the confirmation of the plan, the commencement of a case under the Bankruptcy Code, or the appointment of or taking possession by a trustee in a case under the Bankruptcy Code or by a receiver or other custodian prior to the commencement of a case under the Bankruptcy Code. Continuing Disclosure Pursuant to the Disclosure Dissemination Agent Agreement entered into by the City with Digital Assurance Certification, L.L.C. ( DAC ) in connection with the issuance of the Bonds (the Continuing Disclosure Agreement ), the City will covenant for the benefit of the registered owners and the Beneficial Owners (as defined in the Continuing Disclosure Agreement) of the Bonds, to provide certain financial information and operating data relating to the City by no later than seven months after the end of each of the City's Fiscal Years, commencing with the report for the Fiscal Year ending June 30, 2011 (the Annual Report ), and to provide notices of the occurrence of certain enumerated events with respect to the Bonds, if material in accordance with Rule 15c-12(b)(5) under the Securities Exchange Act of 1934, as amended. The Annual Report will be filed on behalf of the City by DAC, as dissemination agent, with the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access ( EMMA ) system (and with the State Information Depository, if any, established by the State of South Carolina). The notices of such material events will be filed on behalf of the City by DAC with the Municipal Securities Rulemaking Board (and with such State Information Depository, if any). The specific nature of the information to be contained in the Annual Report and the notices of material events is set forth in Appendix C. These covenants have been made in order to assist the original purchaser of the Bonds in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the Rule ). As provided in the Continuing Disclosure Agreement, if the City fails to comply with any provision of the Continuing Disclosure Agreement, any registered owner or Holder of the Bonds may take such actions as may be necessary and appropriate, including seeking injunctive relief or specific performance by court order, to cause the City to comply with its continuing disclosure obligations under the Continuing Disclosure Agreement. Beneficial Owner is defined in the Continuing Disclosure Agreement to mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax 10