MUNICIPAL IMPROVEMENT CORPORATION OF LOS ANGELES

Transcription

1 NEW ISSUE FULL BOOK-ENTRY-ONLY Kroll: AA- (All Bonds) S&P: AA- (All Bonds) Moody s: Aa3 (Tax-Exempt Bonds) A1 (Series 2018 C Bonds) See RATINGS herein. In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Series 2018-A Bonds and the Series 2018-B Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax; however, interest on the Series 2018-A Bonds and the Series 2018-B Bonds is included in the calculation of a corporation s adjusted current earnings for purposes of, and thus may be subject to, the corporate alternative minimum tax (applicable only to taxable years beginning before January 1, 2018), and (ii) interest on the Series 2018A Bonds and the Series 2018-B Bonds is exempt from State of California personal income taxes. Interest on the Series 2018-A Bonds and the Series 2018-B Bonds may be subject to certain federal taxes imposed only on certain corporations. For a more complete discussion of the tax aspects, see TAX MATTERS The Series 2018-A Bonds and the Series 2018-B Bonds herein. In the opinion of Squire Patton Boggs (US) LLP, Bond Counsel, under existing law, interest on the Series 2018-C Bonds is exempt from State of California personal income taxes. INTEREST ON THE SERIES 2018-C BONDS IS NOT EXCLUDED FROM GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. For a more complete discussion of the tax aspects, see TAX MATTERS The Series 2018-C Bonds herein. MUNICIPAL IMPROVEMENT CORPORATION OF LOS ANGELES $54,430,000 LEASE REVENUE BONDS, SERIES 2018-A (CAPITAL EQUIPMENT) $31,270,000 LEASE REVENUE BONDS, SERIES 2018-B (REAL PROPERTY) Dated: Date of Delivery $25,630,000 LEASE REVENUE REFUNDING BONDS SERIES 2018-C (REAL PROPERTY TAXABLE) Due: November 1, as shown on the inside cover The Municipal Improvement Corporation of Los Angeles Lease Revenue Bonds, Series 2018-A (Capital Equipment) (the Series 2018-A Bonds ), Lease Revenue Bonds, Series 2018-B (Real Property) (the Series 2018-B Bonds and, together with the Series 2018-A Bonds, the Tax-Exempt Bonds ), and Lease Revenue Refunding Bonds, Series 2018-C (Real Property Taxable) (the Series 2018-C Bonds and, together with the Series 2018-A Bonds and the Series 2018-B Bonds, the Bonds and, each individually, a Series of Bonds) will be issued pursuant to the Indenture, dated as of February 1, 2018 (the Indenture ), by and among the Municipal Improvement Corporation of Los Angeles (the Corporation ), the City of Los Angeles, California (the City ), and U.S. Bank National Association, as trustee thereunder (the Trustee ). The Series 2018-A Bonds are being issued to retire certain maturities of commercial paper issued by the Corporation, the proceeds of which were used to finance the acquisition of certain items of equipment and vehicles of the City. The Series 2018-B Bonds are being issued to retire certain maturities of commercial paper issued by the Corporation, the proceeds of which were used to finance and refinance the acquisition and improvement of certain real property of the City. The Series 2018-C Bonds are being issued to prepay all of the outstanding Taxable Certificates of Participation (Real Property Acquisition Program AK) Hollywood and Highland Theater Project. Proceeds of the Bonds will also be used to pay costs of issuance of each respective Series of Bonds. See PLAN OF FINANCE and ESTIMATED SOURCES AND USES OF FUNDS herein. The Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ( DTC ), and will be available in the denomination of $5,000 or any integral multiple thereof, under the book-entry system maintained by DTC. Interest on the Bonds will be payable on May 1 and November 1 of each year, commencing November 1, The Trustee will make payments of the principal of and interest on the Bonds directly to DTC, or its nominee. Disbursement of such payments to the Beneficial Owners of the Bonds is the responsibility of DTC s Participants and Indirect Participants. See APPENDIX D DTC AND THE BOOK-ENTRY ONLY SYSTEM. The Bonds of each Series are payable from the Revenues pledged to such Series under the Indenture. Such Revenues for each Series primarily consist of the respective Basic Lease Payments to be made by the City to the Corporation under the Equipment Lease Agreement for the Series 2018-A Bonds, the Facility Lease Agreement for the Series 2018-B Bonds, and the Facility Lease Agreement for the Series 2018-C Bonds (collectively, the Lease Agreements ). Pursuant to the Lease Agreements, the City will lease the capital equipment or real property, as applicable, therein described from the Corporation. The City is required under the Lease Agreements to make rental payments from any source of available funds in an amount sufficient to pay the principal of and interest on the respective Bonds, which rental payments are subject to abatement. Each Series of Bonds is secured solely by, and payable solely from, the Basic Lease Payments to be made by the City under the Lease Agreement relating to such Series, and the funds and accounts pledged to such Series under the Indenture. Basic Lease Payments made under a Lease Agreement relating to one Series of Bonds shall not be applied to pay principal of or interest on the other Series of Bonds. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS and RISK FACTORS herein. The Bonds are subject to optional redemption, mandatory sinking fund redemption, and extraordinary mandatory redemption prior to their stated maturity. See THE BONDS Redemption herein. THE BONDS OF EACH SERIES ARE LIMITED OBLIGATIONS OF THE CORPORATION AND ARE PAYABLE SOLELY FROM THE REVENUES AND AMOUNTS ON DEPOSIT IN THE FUNDS AND ACCOUNTS ESTABLISHED UNDER THE INDENTURE WITH RESPECT TO EACH SERIES (OTHER THAN AMOUNTS ON DEPOSIT IN THE REBATE FUNDS). THE BONDS DO NOT CONSTITUTE A DEBT OR LIABILITY OF THE CITY OR OF THE STATE OF CALIFORNIA (THE STATE ) AND NEITHER THE FAITH AND CREDIT OF THE CITY OR OF THE STATE ARE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON SUCH BONDS. NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO MAKE BASIC LEASE PAYMENTS OR ADDITIONAL PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. This cover contains information for general reference only. Investors must read the entire Official Statement to obtain information essential to making an informed investment decision. The Bonds are offered for sale to the Underwriters subject to the final approving legal opinion of Squire Patton Boggs (US) LLP, Los Angeles, California, Bond Counsel. Certain legal matters will be passed upon for the City by Hawkins Delafield & Wood LLP, Los Angeles, California, Disclosure Counsel. Certain additional legal matters will be passed upon for the City and the Corporation by Michael N. Feuer, City Attorney. Certain legal matters will be passed on for the Underwriters by Stradling Yocca Carlson & Rauth, A Professional Corporation, as counsel for the Underwriters. KNN Public Finance, a Limited Liability Company, is serving as Municipal Advisor to the City. It is anticipated that the Bonds will be available for delivery through the facilities of DTC in book-entry form on or about February 6, Underwriters Series 2018-A Bonds and Series 2018-B Bonds Citigroup Stifel Loop Capital Markets Dated: January 18, 2018 Underwriters Series 2018-C Bonds Ramirez & Co., Inc. US Bancorp

2 Maturity Date (November 1) MATURITY SCHEDULES MUNICIPAL IMPROVEMENT CORPORATION OF LOS ANGELES $54,430,000 LEASE REVENUE BONDS, SERIES 2018-A (CAPITAL EQUIPMENT) Principal Amount Interest Rate Yield Price 2018 $3,725, % 1.400% L ,575, L ,810, L ,055, L ,315, M ,585, M ,875, M ,175, M ,490, M ,825, M70 CUSIP (544587) Copyright 2018, American Bankers Association. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by the CUSIP Service Bureau, managed on behalf of the American Bankers Association by Standard & Poor s. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City or the Corporation and are included solely for the convenience of the registered owners of the applicable Bonds. None of the City, the Corporation, the Municipal Advisor or the Underwriters are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance and other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

3 Maturity Date (November 1) $31,270,000 LEASE REVENUE BONDS, SERIES 2018-B (REAL PROPERTY) Principal Amount Interest Rate Yield Price 2018 $ 585, % 1.400% M , M ,045, N ,095, N ,150, N ,210, N ,275, N ,340, N ,410, N ,480, C N ,555, C P ,635, C P ,720, C P ,810, C P ,900, C P ,000, C P ,100, C P ,210, C P ,320, C Q ,440, C Q35 CUSIP (544587) $25,630,000 LEASE REVENUE REFUNDING BONDS, SERIES 2018-C (REAL PROPERTY TAXABLE) Maturity Date (November 1) Principal Amount Interest Rate Yield Price 2018 $2,070, % 2.020% 100 K ,315, K ,380, K ,440, K ,515, K ,595, K ,685, L ,780, L ,870, L ,980, L55 CUSIP (544587) C Priced to call at par on November 1, Copyright 2018, American Bankers Association. CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by the CUSIP Service Bureau, managed on behalf of the American Bankers Association by Standard & Poor s. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City or the Corporation and are included solely for the convenience of the registered owners of the applicable Bonds. None of the City, the Corporation, the Municipal Advisor or the Underwriters are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance and other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

4 No dealer, broker, salesperson or other person has been authorized by the Corporation or the City to give any information or to make any representations other than those contained herein, and if given or made, such other information or representation must not be relied upon as having been authorized by the Corporation or 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 a person in any jurisdiction in which it is unlawful for such person to make an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts. 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 a 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. The information in APPENDIX D DTC AND THE BOOK-ENTRY-ONLY SYSTEM has been furnished by The Depository Trust Company and no representation has been made by the Corporation or the City or the Underwriters as to the accuracy or completeness of such information. The information set forth herein has been obtained from the Corporation and the City and other sources which are believed to be reliable. The information and expressions of opinions herein are subject to change without notice and neither 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 Corporation or the City since the date thereof. This Official Statement is submitted with respect to the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the Corporation and the City. All summaries of the documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions. Certain statements included or incorporated by reference in the Official Statement constitute forwardlooking statements. Such statements are generally identifiable by the terminology used such as plan, expect, estimate, budget or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although such expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Neither the Corporation nor the City is not obligated to issue any updates or revisions to the forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE BONDS AT LEVELS 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 BONDS TO CERTAIN DEALERS, INSTITUTIONAL INVESTORS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE FRONT COVER HEREOF, AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS. This Official Statement, including any supplement or amendment hereto, is intended to be deposited with the Municipal Securities Rulemaking Board through the Electronic Municipal Marketplace Access website. A wide variety of other information, including financial information, concerning the City, is available from publications and websites of the City, the County of Los Angeles and others. No such information is a part of or incorporated into this Official Statement, except as expressly noted herein.

5 CITY OF LOS ANGELES, CALIFORNIA Mayor Eric Garcetti City Council Gilbert Cedillo, District 1 Nury Martinez, District 6 Mike Bonin, District 11 Paul Krekorian, District 2 Monica Rodriguez, District 7 Mitchell Englander, District 12 Bob Blumenfield, District 3 Marqueece Harris-Dawson, District 8 Mitch O Farrell, District 13 David E. Ryu District 4 Curren D. Price, Jr., District 9 José Huizar, District 14 Paul Koretz, District 5 Herb J. Wesson, Jr., District 10 Joe Buscaino, District 15 OFFICIALS OF THE CITY OF LOS ANGELES Michael N. Feuer, City Attorney Ron Galperin, City Controller Richard H. Llewellyn, Jr., Interim City Administrative Officer Holly L. Wolcott, City Clerk Claire Bartels, City Treasurer City Department Issuing Debt Office of the City Administrative Officer Debt Management Group MUNICIPAL IMPROVEMENT CORPORATION OF LOS ANGELES Board of Directors Michael F. Keeley, President, Faye Washington, Vice President, Lily Y. Lee, Secretary Royce A. Menkus, Treasurer H. F. Boeckmann, II PROFESSIONAL SERVICES Bond Counsel Squire Patton Boggs (US) LLP Los Angeles, California Disclosure Counsel Hawkins Delafield & Wood LLP Los Angeles, California Municipal Advisor KNN Public Finance LLC Oakland, California Trustee U.S. Bank National Association Los Angeles, California

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7 TABLE OF CONTENTS INTRODUCTION... 1 Authority and Purpose for Issuance... 1 Lease Agreements... 1 Security and Sources of Payment for the Bonds... 2 Further Information in this Official Statement... 3 THE BONDS... 4 General Terms... 4 Redemption... 4 Additional Bonds... 6 DTC and the Book-Entry Only System... 6 PLAN OF FINANCE... 7 ESTIMATED SOURCES AND USES OF FUNDS... 7 DEBT SERVICE SCHEDULE... 7 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS General Lease Payments Abatement of Lease Payments Insurance Substitution and Release of Property Repair and Maintenance; Taxes and Assessments THE LEASED PROPERTY THE CITY THE CORPORATION RISK FACTORS Limited Obligations Abatement Financial Condition of the City No Limitation on Incurring Additional Obligations Seismic Events; Force Majeure Constitutional and Statutory Limitations on Increase of Revenues Limitations on Default Remedies Insurance Bankruptcy CONTINUING DISCLOSURE TAX MATTERS The Tax-Exempt Bonds The Series 2018-C Bonds CERTAIN LEGAL MATTERS LITIGATION RATINGS AVAILABILITY OF DOCUMENTS FINANCIAL STATEMENTS UNDERWRITING MUNICIPAL ADVISOR Page i

8 TABLE OF CONTENTS (Continued) Page MISCELLANEOUS APPENDICES: APPENDIX A CITY OF LOS ANGELES INFORMATION STATEMENT... A-1 APPENDIX B SUMMARY OF LEGAL DOCUMENTS... B-1 APPENDIX C PROPOSED FORM OF OPINION OF BOND COUNSEL... C-1 APPENDIX D DTC AND THE BOOK-ENTRY ONLY SYSTEM... D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE CERTIFICATE... E-1 ii

9 OFFICIAL STATEMENT MUNICIPAL IMPROVEMENT CORPORATION OF LOS ANGELES $54,430,000 LEASE REVENUE BONDS, SERIES 2018-A (CAPITAL EQUIPMENT) $31,270,000 LEASE REVENUE BONDS, SERIES 2018-B (REAL PROPERTY) INTRODUCTION $25,630,000 LEASE REVENUE REFUNDING BONDS SERIES 2018-C (REAL PROPERTY TAXABLE) This Official Statement, which includes the cover page, inside cover page and appendices hereto (the Official Statement ), is provided for the purpose of setting forth information concerning the issuance and sale by the Municipal Improvement Corporation of Los Angeles (the Corporation ) of its $54,430,000 Lease Revenue Bonds, Series 2018-A (Capital Equipment) (the Series 2018-A Bonds ), $31,270,000 Lease Revenue Bonds, Series 2018-B (Real Property) (the Series 2018-B Bonds and, together with the Series 2018-A Bonds, the Tax-Exempt Bonds ), and $25,630,000 Lease Revenue Refunding Bonds, Series 2018-C (Real Property Taxable) (the Series 2018-C Bonds and, together with the Series 2018-A Bonds and the Series 2018-B Bonds, the Bonds and each individually as a Series of Bonds). Capitalized terms not otherwise defined herein have the meanings given in the Indenture (hereinafter defined) and the Lease Agreement (hereinafter defined) relating to such Series of Bonds or in APPENDIX B SUMMARY OF LEGAL DOCUMENTS. This introduction is not intended to be a complete statement of the terms and provisions of the Bonds and is qualified by the more detailed information contained elsewhere in this Official Statement. Authority and Purpose for Issuance The Bonds are authorized under the Articles of Incorporation of the Corporation and the laws of the State of California (the State ). The Bonds are being issued pursuant to the Indenture, dated as of February 1, 2018 (the Indenture ), by and among the Corporation, the City of Los Angeles, California (the City ) and U.S. Bank National Association, as trustee thereunder (the Trustee ). The Series A Bonds are being issued to retire certain maturities of commercial paper issued by the Corporation, the proceeds of which were used to finance the acquisition of certain items of capital equipment and vehicles of the City. The Series 2018-B Bonds are being issued to retire certain maturities of commercial paper issued by the Corporation, the proceeds of which were used to finance and refinance the acquisition and improvement of certain real property of the City. The Series 2018-C Bonds are being issued to prepay all of the outstanding Taxable Certificates of Participation (Real Property Acquisition Program AK) Hollywood and Highland Theater Project (the 1999 Certificates ), which evidence the proportionate interest of the owners thereof in lease payments made by the City pursuant to a lease agreement with the Corporation. Proceeds of the Bonds will also be used to pay costs of issuance of each respective Series of Bonds. See PLAN OF FINANCE and SOURCES AND USES OF FUNDS herein. Lease Agreements The City will lease certain items of capital equipment and vehicles, as further described herein (the Series 2018-A Equipment ), from the Corporation pursuant to an Equipment Lease Agreement, dated as of February 1, 2018 (the Series 2018-A Lease Agreement ), between the City and the Corporation. The City will lease certain real property, including the land, buildings and other improvements thereon, as further described herein (the Series 2018-B Real Property ), to the Corporation pursuant to a Site Lease, dated as of February 1, 2018 (the Series 2018-B Site Lease ), 1

10 between the City and the Corporation, and the Corporation will sublease to the City the Series 2018-B Real Property pursuant to a Facility Lease Agreement, dated as of February 1, 2018 (the Series 2018-B Lease Agreement ), by and between the City and the Corporation. The City will lease certain real property, including the land, buildings, and other improvements thereon, as further described herein (the Series 2018-C Real Property ), to the Corporation pursuant to a Site Lease, dated as of February 1, 2018 (the Series 2018-C Site Lease and, together with the Series 2018-B Site Lease, the Site Leases ), between the City and the Corporation, and the Corporation will sublease to the City the Series 2018-C Real Property pursuant to a Facility Lease Agreement, dated as of February 1, 2018 (the Series 2018-C Lease Agreement and, together with the Series 2018-A Lease Agreement and the Series 2018-B Lease Agreement, the Lease Agreements ). The Series 2018-A Equipment, the Series 2018-B Real Property, and the Series 2018-C Real Property are herein referred to collectively as the Property. Under the respective Lease Agreements, the City has agreed to pay to the Corporation, its successors and assigns, as rental for the use and occupancy of the applicable Property, the basic lease payments specified in the Lease Agreements from the City s General Fund, including any prepayments thereunder (collectively, the Basic Lease Payments ). Pursuant to the Lease Agreements, the City also agrees to pay Additional Payments consisting of: (i) with respect to the Property, all taxes, fees or assessments levied upon the Property or upon any interest therein of the Corporation or the Trustee; (ii) insurance premiums, if any, on insurance required under each Lease Agreement; (iii) all fees and expenses of the Trustee, and expenses of the City required to comply with each Lease Agreement and the Indenture; (iv) any other fees, costs or expenses incurred by the Corporation in connection with the execution, performance or enforcement of each Lease Agreement or the Indenture, including any amounts necessary to indemnify and defend the Corporation; and (v) any amounts required to be paid to the United States government pursuant to section 148 of the Internal Revenue Code of 1986, as amended (the Code ). The Basic Lease Payments and Additional Payments, collectively, constitute the Lease Payments. Pursuant to the Lease Agreements, the City may substitute for or release all or a portion of the Property with other property of annual fair rental value such that the aggregate annual fair rental value of the Property after such substitution equals or exceeds the highest Basic Lease Payments due in any remaining Rental Period. See SECURITY AND SOURCES OF PAYMENT FOR THE BONDS Substitution or Release of Property herein. Each Lease Agreement provides that if there is a default by the City under such Lease Agreement, the Trustee may terminate such Lease Agreement and re-let the Property or bring litigation to recover Basic Lease Payments on an annual basis. A default under one of the Lease Agreements will not result in a cross-default under the other Lease Agreements and vice-versa. See APPENDIX B SUMMARY OR LEGAL DOCUMENTS and RISK FACTORS Limitations on Default Remedies herein. Security and Sources of Payment for the Bonds Pledge of Revenues and Basic Lease Payments. The Bonds will be secured solely by a pledge of Revenues and amounts on deposit in the funds, accounts and subaccounts established under the Indenture (other than the Rebate Funds). The Revenues consist of (i) with respect to the Series 2018-A Bonds, the Basic Lease Payments made pursuant to the Series 2018-A Lease Agreement, (ii) with respect to the Series 2018-B Bonds, the Basic Lease Payments made pursuant to the Series 2018-B Lease Agreement, (iii) with respect to the Series 2018-C Bonds, the Basic Lease Payments made pursuant to the Series 2018-C Lease Agreement, and (iv) with respect to each Series of Bonds, interest or profits from the investment of money in any fund, account or subaccount relating to such Series of Bonds held under the Indenture (other than the Rebate Fund relating to such Series of Tax-Exempt Bonds). The Basic Lease Payments in an amount sufficient to pay the principal of and interest on the Series of Bonds secured 2

11 thereby will be transferred to the Trustee on each lease payment date (the Lease Payment Date ), being the fifteenth day of April and October in each year during the Term of the Lease Agreements, commencing October 15, 2018, except that if the Principal Corporate Trust Office of the Trustee is not open for business on any such date, then that Lease Payment Date shall be the next day on which such office is open for business. The Series 2018-A Bonds, Series 2018-B Bonds, and Series 2018-C Bonds will be separately secured by the Basic Lease Payments to be made under the Series 2018-A Equipment Lease Agreement, Series 2018-B Facility Lease Agreement, and Series 2018-C Facility Lease Agreement, respectively. The Basic Lease Payments payable under a Lease Agreement relating to one Series of Bonds shall not be applied to pay principal of or interest on any other Series of Bonds. No Series of Bonds is secured by, and no Owners of any Series will have any security interest in or mortgage on, the Property. Pursuant to the Assignment Agreement, dated as of February 1, 2018 (the Assignment Agreement ), by and between the Corporation and the Trustee, the Corporation will assign to the Trustee for the benefit of the respective Bond Owners the Corporation s rights under the Site Leases and the Lease Agreements, including the right to receive Basic Lease Payments. Annual Appropriation Covenant; Remedies for Failing to Appropriate. Under each Lease Agreement, the City covenants to take such action as may be necessary to include all Lease Payments due under the applicable Lease Agreement in its annual budgets and to make the necessary annual appropriations for all such Lease Payments. The Lease Agreements each provide that such covenants of the City shall be deemed to be and shall be construed to be ministerial duties imposed by law. The Lease Agreements each provide that it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such official to enable the City to carry out and perform the covenants and agreements in such Lease Agreement. If the City defaults on its covenants in a Lease Agreement, including the covenant to include all Lease Payments payable thereunder in the annual budgets, the Trustee may exercise any remedies available pursuant to law or the respective Lease Agreement, including re-letting the Property leased thereunder and/or terminating the respective Lease Agreement; provided, however, that the Lease Payments cannot be accelerated. There are no cross-default provisions in the Lease Agreements and a default under one Lease Agreement does not constitute a default under the other Lease Agreement. See RISK FACTORS Limitations on Default Remedies herein. Further Information in this Official Statement For important information regarding the budget and financial operations of the City, see the section captioned BUDGET AND FINANCIAL OPERATIONS in APPENDIX A CITY OF LOS ANGELES INFORMATION STATEMENT. Certain other demographic, financial and other information with respect to or affecting the City is contained elsewhere in APPENDIX A CITY OF LOS ANGELES INFORMATION STATEMENT and in the City s Comprehensive Annual Financial Report For The Year Ended June 30, 2016 and Independent Auditor s Report, which are incorporated by reference therein. Brief descriptions of the Bonds, the Indenture, the Lease Agreements, the Site Leases, the Assignment Agreement and other documents and information are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive, and are qualified in their entirety by reference to the forms thereof. See APPENDIX B SUMMARY OF LEGAL DOCUMENTS for further information regarding the City s obligations under the Lease Agreements. See RISK FACTORS herein for certain factors that may affect the payment of and security for the Bonds. 3

12 THE BONDS General Terms The Bonds will be dated the date of their delivery and will bear interest at the rates per annum and mature in the amounts and on the dates shown on the inside cover page of this Official Statement. The Bonds will be delivered in registered form, without coupons, initially registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York ( DTC ). See APPENDIX D DTC AND THE BOOK-ENTRY ONLY SYSTEM. Interest on the Bonds of each Series will be payable semiannually on May 1 and November 1 of each year, commencing November 1, 2018 (each, an Interest Payment Date ). So long as DTC, or its nominee, Cede & Co., is the registered owner of the Bonds, all payments on the Bonds and any notice with respect to any Bond will be sent directly to DTC, and disbursement of such payments and delivery of such notices to the Beneficial Owners will be the responsibility of the DTC Participants as more fully described herein. Payment of interest on the Bonds shall be made to the person in whose name such Bonds are registered, as of the record date (being the fifteenth day of the month immediately preceding an Interest Payment Date, whether or not such day is a Business Day) (the Record Date ) preceding the applicable Interest Payment Date, on the registration books kept by the Trustee pursuant to the Indenture. Principal of the Bonds of each Series is payable upon maturity or earlier redemption of such Bonds upon surrender thereof at the corporate trust offices of the Trustee in Los Angeles, California. If the date for making any payment under the Indenture is not a Business Day, such payment, with no interest accruing for the period from and after such nominal date, may be made on the next succeeding Business Day with the same force and effect as if done on the nominal date provided therefore in the Indenture. Redemption No Optional Redemption of Series 2018-A Bonds. The Series 2018-A Bonds are not subject to optional redemption prior to their stated maturity dates. Optional Redemption of Series 2018-B Bonds. The Series 2018-B Bonds maturing on or before November 1, 2026 are not subject to optional redemption prior to their stated maturity dates. The Series 2018-B Bonds maturing on or after November 1, 2027, are subject to optional redemption prior to their stated maturity dates, on or after November 1, 2026, at the option of the Corporation (at the direction of the City), in whole or in part, on any date, at a redemption price equal to the principal amount of the Series 2018-B Bonds called for redemption, plus accrued interest to the redemption date, without premium. Optional Redemption of Series 2018-C Bonds. The Series 2018-C Bonds maturing on November 1, 2018 are not subject to optional redemption prior to maturity. The Series 2018-C Bonds maturing on or after November 1, 2019 are subject to redemption prior to maturity at the option of the Corporation (at the direction of the City), in whole or in part, on any business day, at the Make-Whole Redemption Price, plus accrued and unpaid interest up to, but not including, the redemption date, on the Series 2018-C Bonds to be redeemed on the date fixed for redemption. The Make-Whole Redemption Price is the greater of (i) 100% of the principal amount of the Series 2018-C Bonds to be redeemed and (ii) the sum of the present value of the remaining scheduled payments of principal and interest on the Series 2018-C Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which such Series 2018-C Bonds are to be redeemed, discounted to the date on which the Series 2018-C Bonds are to be redeemed on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 15 basis points. 4

13 Treasury Rate means, as of any redemption date for a particular Series 2018-C Bond, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two business days prior to the redemption date (excluding inflation indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to the maturity date of the Series 2018-C Bond to be redeemed; provided, however, that if the period from the redemption date to such maturity date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. At the request of the Corporation (at the direction of the City), the Make-Whole Redemption Price of the Series 2018-C Bonds to be redeemed shall be determined by an independent accounting firm, investment banking firm or financial advisor retained by City at the City s expense to calculate such Make-Whole Redemption Price. The City may conclusively rely on the determination of such Make- Whole Redemption price by such independent accounting firm, investment banking firm or financial advisor and shall not be liable for such reliance. Extraordinary Mandatory Redemption. The Bonds of each Series are subject to redemption prior to their respective maturity dates, in denominations of $5,000 and any integral multiple thereof (the Authorized Denominations ), upon notice as hereinafter described, on any date, in whole or in part, from Net Proceeds of any policy of insurance, title insurance (with respect to the Series 2018-B Bonds and Series 2018-C Bonds) or condemnation award received by the Trustee arising from the damage, destruction, taking or other loss of or to the Property leased under each Lease Agreement, in accordance with the provisions of the Indenture and each Lease Agreement, at a redemption price equal to the principal amount thereof together with accrued interest to the date of redemption, without premium. If less than all Outstanding Bonds of one or more Series are to be redeemed as described in this paragraph, the Trustee shall use the net insurance proceeds or condemnation awards attributable to the portion of the Property destroyed, damaged, stolen or taken, to redeem Bonds of such Series, as directed in writing by the City. Subject to the foregoing, if less than all Outstanding Bonds of a Series maturing by their terms on any one date are to be so redeemed at any one time, Bonds of such Series and maturity date to be redeemed shall be selected in the manner described under the caption Selection for Redemption below. The redemption date shall be a date, selected by the City on behalf of the Corporation, no later than 75 days after receipt of the Written Request of the City delivered to the Trustee pursuant to the Indenture. Selection for Redemption. If less than all of the Bonds of any maturity are to be redeemed prior to maturity, then (A) if the Bonds are in book-entry form at the time of such redemption, the Trustee shall instruct DTC to instruct the DTC participants to select the specific Bonds for redemption pro rata among Owners, and neither the City nor the Trustee shall have any responsibility to ensure that DTC or the DTC participants properly select such Bonds for redemption, and (B) if the Bonds are not then in book-entry form at the time of such redemption, on each redemption date, the Trustee shall select the specific Bonds for redemption pro rata among Owners. The portion of any registered Bond of a denomination of more than $5,000 to be redeemed will be in the principal amount of $5,000 or any integral multiple thereof. Notice of Redemption. Notice of redemption shall be mailed by the Trustee, not less than 30 nor more than 60 days prior to the redemption date, to (i) the respective Owners of the Bonds designated for redemption at their addresses appearing on the registration books of the Trustee by first class mail; (ii) the Securities Depositories (if any); and (iii) the Municipal Securities Rulemaking Board (the MSRB ). Each notice of redemption shall state the date of such notice, the redemption price, the name and appropriate address of the Trustee, the CUSIP number (if any) of the maturity or maturities within a Series, and, if less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the 5

14 respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said Bonds the principal amount thereof and in the case of a Bond to be redeemed in part only, the specified portion of the principal amount thereof to be redeemed, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the address of the Trustee specified in the redemption notice. The notice of redemption for any optional redemption pursuant to the provisions of the Indenture shall contain a statement to the effect that redemption of the Bonds is conditioned upon the receipt by the Trustee of amounts equal to the redemption price of the Bonds to be redeemed on or before the redemption date, and such optional redemption shall be so conditioned. The Trustee may provide notices hereunder to the Securities Depositories and the MSRB electronically. If notice of redemption has been duly given as described in the preceding paragraph and money for the payment of the redemption price of the Bonds called for redemption is held by the Trustee, then on the redemption date designated in such notice such Bonds shall become due and payable, and from and after the date so designated interest on the Bonds so called for redemption shall cease to accrue, and the Owners of such Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. Failure by the Trustee to give notice pursuant to the redemption provisions of the Indenture to any one or more of the Securities Depositories, or the insufficiency of any such notice, shall not affect the sufficiency of the proceedings for redemption. Failure by the Trustee to mail or otherwise provide notice of redemption pursuant to the redemption provisions of the Indenture to any one or more of the respective Owners of any Bonds designated for redemption shall not affect the sufficiency of the proceedings for redemption with respect to the Owners to whom such notice was mailed. Additional Bonds The Indenture provides that the Corporation and the City may, at any time, determine to issue and deliver Additional Bonds, without the consent of the Owners of any Bonds, payable from the Revenues pledged to the Bonds as provided therein and secured by a pledge of the Revenues as provided therein equal to the pledge securing the Outstanding Bonds of such Series theretofore issued pursuant to the Indenture, but only subject to certain terms and conditions set forth in the Indenture and which are made conditions precedent to the issuance of any such Additional Bonds. The Indenture sets forth the conditions to, and the procedures for, the issuance of Additional Bonds. See APPENDIX B SUMMARY OF LEGAL DOCUMENTS THE INDENTURE Issuance of Additional Bonds. See also RISK FACTORS No Limitation on Incurring Additional Obligations herein. DTC and the Book-Entry Only System DTC will act as securities depository for the Bonds. The Bonds will be registered in the name of Cede & Co. (DTC s partnership nominee), and will be available to ultimate purchasers in Authorized Denominations under the book-entry system maintained by DTC. Ultimate purchasers of the Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners of the Bonds shall mean Cede & Co., and shall not mean the ultimate purchasers of the Bonds. Payments of the principal of and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by the Trustee, so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC s Participants are the responsibility of DTC and disbursements of such payments to the Beneficial Owners are the responsibility of DTC s Participants and Indirect Participants. See APPENDIX D DTC AND THE BOOK-ENTRY ONLY SYSTEM. 6

15 PLAN OF FINANCE The Series 2018-A Bonds are being issued to retire certain maturities of commercial paper issued by the Corporation, the proceeds of which were used to finance the acquisition of certain items of capital equipment and vehicles of the City, and to pay the costs of issuance of the Series 2018-A Bonds. The Series 2018-B Bonds are being issued to retire certain maturities of commercial paper issued by the Corporation, the proceeds of which were used to finance the acquisition and improvement of certain real property of the City, and to pay the costs of issuance of the Series 2018-B Bonds. The proceeds of the Series 2018-C Bonds will be applied to prepay all of the 1999 Certificates and pay costs of issuance of the Series 2018-C Bonds. The 1999 Certificates were executed and delivered to finance certain costs allocated to The Community Redevelopment Agency of the City of Los Angeles in connection with the acquisition of certain real property located between Highland Avenue and Orange Drive in the City of Los Angeles and the construction thereon of a live performance and broadcast theater. ESTIMATED SOURCES AND USES OF FUNDS The funds to be received from the sale of the Bonds, together with other funds, and the proposed uses of Bond proceeds and such other funds are expected to be in the amounts shown below. Series 2018-A Bonds Series 2018-B Bonds Series 2018-C Bonds Total Sources of Funds Principal Amount of Bonds $54,430, $31,270, $25,630, $111,330, Original Issue Premium 8,861, ,596, ,457, Release from Prior Debt Service Reserve Funds ,612, ,612, Total Sources $63,291, $36,866, $29,242, $129,400, Uses of Funds Retirement of Commercial Paper $62,880, $36,615, $ -- $99,495, Deposit to Escrow Fund ,007, ,007, Costs of Issuance (1) 250, , , , Underwriters Discount 160, , , , Total Uses $63,291, $36,866, $29,242, $129,400, (1) Includes fees for Bond Counsel, Disclosure Counsel, the Municipal Advisor, the Trustee, the Verification Agent, the rating agencies, title insurance and other costs associated with the issuance of the Bonds. DEBT SERVICE SCHEDULE The Lease Agreements each require the City to make the Basic Lease Payments on each April 15 and October 15, commencing on October 15, 2018, as rental for the use and occupancy of the Property during the Term of the Lease Agreements. The Indenture requires that the Basic Lease Payments received under the Lease Agreements be deposited in the Series 2018-A Bond Fund, the Series 2018-B Bond Fund, and the Series 2018-C Bond Fund, as applicable, maintained by the Trustee. Pursuant to the Indenture, on May 1 and November 1 of each year, the Trustee will apply such amounts in the respective Bond Funds as are necessary to make principal and interest payments on each Series of Bonds as such Bonds become due and payable. The table on the following page sets forth the scheduled principal and interest payments on the Bonds, which correspond to the Basic Lease Payments to be paid in each period by the City under the Lease Agreements. 7

16 THE OBLIGATIONS OF THE CITY TO MAKE BASIC LEASE PAYMENTS OR ADDITIONAL PAYMENTS DO NOT CONSTITUTE OBLIGATIONS FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO MAKE BASIC LEASE PAYMENTS OR ADDITIONAL PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. 8

17 DEBT SERVICE SCHEDULE Series 2018-A Series 2018-B Payment Date Principal Interest Total Debt Service Total Debt Service (Fiscal Year) Principal Interest Total Debt Service Total Debt Service (Fiscal Year) 11/1/2018 $3,725, $2,003, $5,728, $ -- $ 585, $1,150, $1,735, $ -- 5/1/ ,267, ,267, ,995, , , ,503, /1/2019 4,575, ,267, ,842, , , ,757, /1/ ,153, ,153, ,995, , , ,499, /1/2020 4,810, ,153, ,963, ,045, , ,787, /1/ ,033, ,033, ,996, , , ,503, /1/2021 5,055, ,033, ,088, ,095, , ,811, /1/ , , ,994, , , ,500, /1/2022 5,315, , ,221, ,150, , ,838, /1/ , , ,995, , , ,499, /1/2023 5,585, , ,358, ,210, , ,870, /1/ , , ,992, , , ,500, /1/2024 5,875, , ,509, ,275, , ,904, /1/ , , ,996, , , ,502, /1/2025 6,175, , ,662, ,340, , ,938, /1/ , , ,995, , , ,502, /1/2026 6,490, , ,822, ,410, , ,974, /1/ , , ,993, , , ,503, /1/2027 6,825, , ,995, ,480, , ,009, /1/ ,995, , , ,501, /1/ ,555, , ,047, /1/ , , ,500, /1/ ,635, , ,088, /1/ , , ,500, /1/ ,720, , ,132, /1/ , , ,502, /1/ ,810, , ,179, /1/ , , ,503, /1/ ,900, , ,224, /1/ , , ,501, /1/ ,000, , ,276, /1/ , , ,503, /1/ ,100, , ,326, /1/ , , ,501, /1/ ,210, , ,384, /1/ , , ,503, /1/ ,320, , ,439, /1/ , , ,500, /1/ ,440, , ,501, ,501, Total: $54,430, $15,521, $69,951, $69,951, $31,270, $18,762, $50,032, $50,032,