$52,875,000 PENNSYLVANIA HIGHER EDUCATIONAL FACILITIES AUTHORITY LA SALLE UNIVERSITY TAX-EXEMPT FIXED RATE REVENUE BONDS, SERIES 2007A

Transcription

1 In the opinion of Stradley Ronon Stevens & Young, LLP, Bond Counsel, under existing law as presently enacted and construed, and subject to continuing compliance by the University and the Authority with the requirements of the federal tax laws, interest on the Series 2007A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of either individual or corporate federal alternative minimum tax; however, interest paid to certain corporate holders of the Series 2007A Bonds may be subject to alternative minimum tax and certain other taxes imposed on certain corporations under certain circumstances. Under the laws of the Commonwealth of Pennsylvania, as currently enacted and construed, the Series 2007A Bonds are exempt from personal property taxes in Pennsylvania and the interest on the Series 2007A Bonds is exempt from Pennsylvania personal income tax and corporate net income tax. For a further discussion and other tax aspects see TAX MATTERS herein. NEW ISSUE BOOK-ENTRY ONLY RATINGS: Fitch: BBB+ S&P: BBB See MISCELLANEOUS Ratings herein $52,875,000 PENNSYLVANIA HIGHER EDUCATIONAL FACILITIES AUTHORITY LA SALLE UNIVERSITY TAX-EXEMPT FIXED RATE REVENUE BONDS, SERIES 2007A Dated: Delivery Date Due: May 1, as shown on the inside front cover The Series 2007A Bonds are being issued in the aggregate principal amount of $52,875,000 in fully registered form, without coupons. The Series 2007A Bonds, when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company ( DTC ), New York. New York. DTC will act as a securities depository for the Series 2007A Bonds. Registered Owners shall mean Cede & Co., as aforesaid, and shall not mean the actual purchasers of the Series 2007A Bonds. See THE SERIES 2007A BONDS Book-Entry Only System herein. Principal of, premium if any, and semi-annual interest on the Series 2007A Bonds will be payable by The Bank of New York Trust Company, N.A., as Trustee (as herein defined), through its designated corporate trust agency office. So long as DTC or its nominee, Cede & Co., is the Registered Owner of the Series 2007A Bonds, such payments will be made directly to such bondholder. Disbursements of such payments to the DTC Participants (as such phrase is defined herein) is the responsibility of DTC, and disbursement of such payments to the actual purchasers is the responsibility of the DTC Participants and Indirect Participants, as more fully described herein. Interest on the Series 2007A Bonds will be paid on May 1 and November 1 of each year commencing May 1, The Series 2007A Bonds are being issued pursuant to a Trust Indenture dated as of October 1, 2007 (the Series 2007A Indenture ) between Pennsylvania Higher Educational Facilities Authority (the Authority ) and The Bank of New York Trust Company, N.A., as Trustee ( the Trustee ), to finance a portion of a project for La Salle University (the University ) which consists of: (i) the current and advance refunding of the Authority s outstanding 1993 Bonds; (ii) the current refunding of the Authority s Outstanding 1996 Bonds; (iii) the advance refunding of a portion of the Authority s outstanding 1998 Bonds; ((i), (ii) and (iii), together, the Refunding Project ); (iv) the funding of certain capital projects for the benefit of the University, as more fully described and defined herein as the New Money Project; (v) the funding of a debt service reserve fund securing payment of the Series 2007A Bonds; and (vi) the payment of costs of issuing the Series 2007A Bonds. The Series 2007A Bonds are subject to redemption prior to maturity as set forth herein. The Series 2007A Bonds are limited obligations of the Authority, and the principal or redemption price of, and interest on, the Series 2007A Bonds is payable solely from amounts available in the funds established under the Series 2007A Indenture and from payments to be made by under a Loan and Security Agreement (the Series 2007A Loan Agreement ) dated as of October 1, 2007 between the University and the Authority. Under the Series 2007A Loan Agreement, the University has pledged and assigned its Unrestricted Gross Revenues as security for its obligations thereunder. Pursuant to an Intercreditor Agreement dated as of October 1, 2007, such pledge and assignment is made for the equal and ratable benefit of the holders of the Series 2007A Bonds and of other parity indebtedness, as more particularly described herein. THE SERIES 2007A BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY. NEITHER THE GENERAL CREDIT OF THE AUTHORITY NOR THE CREDIT OR THE TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2007A BONDS, NOR SHALL THE SERIES 2007A BONDS BE OR BE DEEMED TO BE GENERAL OBLIGATIONS OF THE AUTHORITY OR OBLIGATIONS OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF, NOR SHALL THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2007A BONDS. THE AUTHORITY HAS NO TAXING POWER. This cover page contains information for quick reference only. It is not a summary of this issue or the Official Statement. Investors must read the entire Official Statement, including the Appendices, to obtain information essential to making an investment decision. The Series 2007A Bonds are offered when, as and if issued by the Authority and received by the Underwriters subject to the approving legal opinion of Stradley Ronon Stevens & Young, LLP, Philadelphia, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the University by Montgomery, McCracken, Walker & Rhoads, LLP, Philadelphia, Pennsylvania, University Counsel, for the Authority by its counsel, Buchanan Ingersoll Rooney, PC, Pittsburgh, Pennsylvania, and for the Underwriters by their counsel Pepper Hamilton LLP. It is expected that the Series 2007A Bonds in definitive form will be available for delivery through the book-entry facilities of The Depository Trust Company in New York, New York on or about October 17, UBS Investment Bank Sovereign Securities Corporation, LLC Dated: September 19, 2007

2 $52,875,000 PENNSYLVANIA HIGHER EDUCATIONAL FACILITIES AUTHORITY LA SALLE UNIVERSITY TAX-EXEMPT FIXED RATE REVENUE BONDS, SERIES 2007A MATURITY (MAY 1) MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND YIELDS PRINCIPAL AMOUNT INTEREST RATE YIELD 2009 $2,125, % 3.880% ,125, % 3.950% ,125, % 4.040% ,120, % 4.100% ,120, % 4.150% ,120, % 4.200% ,120, % 4.300% ,115, % 4.380% ,115, % 4.450% $12,690, % Term Bond due May 1, 2027 (Priced at to Yield 5.010%)* $21,100, % Term Bond due May 1, 2037 (Priced at to Yield 5.170%) *Priced to call..

3 PENNSYLVANIA HIGHER EDUCATIONAL FACILITIES AUTHORITY (Commonwealth of Pennsylvania) 1035 Mumma Road Wormleysburg, PA BOARD MEMBERS Honorable Edward G. Rendell Governor of the Commonwealth of Pennsylvania Honorable James J. Rhoades Designated by the President Pro Tempore of the Senate Honorable Robert J. Mellow Minority Leader of the Senate Honorable Bryan R. Lentz Designated by the Speaker of the House of Representatives Honorable Robin L. Wiessmann State Treasurer Honorable James P. Creedon Secretary of General Services Honorable Stanley E. Saylor Designated by the Minority Leader of the House of Representatives Honorable Jack E. Wagner Auditor General Honorable Gerald L. Zahorchak Secretary of Education President Vice President Vice President Vice President Treasurer Secretary Board Member Board Member Board Member EXECUTIVE DIRECTOR William C. Bostic AUTHORITY COUNSEL (Appointed by the Office of General Counsel) Buchanan Ingersoll & Rooney, PC Pittsburgh, Pennsylvania TRUSTEE The Bank of New York Trust Company, N.A., Philadelphia, Pennsylvania BOND COUNSEL (Appointed by the Office of General Counsel) Stradley Ronon Stevens & Young, LLP Malvern, Pennsylvania UNDERWRITERS COUNSEL Pepper Hamilton LLP

4 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH MAY STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2007A BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY, OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE SERIES 2007A BONDS IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT. The quotations from and summaries and explanations of provisions of laws and documents contained herein, including the cover page and Appendices attached hereto, do not purport to be complete. Reference is made to such laws and documents for full and complete statements of their provisions. 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 information and expressions of opinion herein are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Series 2007A Bonds shall under any circumstances create any implication that there has been no change in the affairs of the Pennsylvania Higher Educational Facilities Authority or La Salle University since the date of this Official Statement. The Underwriters may offer and sell the Series 2007A Bonds to certain dealers (including dealers depositing Series 2007A Bonds into investment trust(s)) and others at prices or yields lower than the public offering prices or yields stated on the cover hereof. No dealer, broker, salesman, or other person has been authorized by the Pennsylvania Higher Educational Facilities Authority, La Salle University or the Underwriters to give any information or to make any representation, other than those contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Pennsylvania Higher Educational Facilities Authority, La Salle University Tax-Exempt Fixed Rate Revenue Bonds, Series 2007A, 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 obtained from La Salle University and from other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriters or, as to information from other sources, by the Pennsylvania Higher Educational Facilities Authority or by La Salle University. 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 any of the information set forth herein since the date hereof. The Underwriters have provided the following sentence for inclusion in the Official Statement: The Underwriters have reviewed the information in this Official Statement -ii-

5 in accordance with, and as part of, their responsibilities to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The Series 2007A Bonds are not and will not be registered under the Securities Act of 1933, as amended, or under any state securities laws, and the Series 2007A Indenture has not been and will not be qualified under the Trust Indenture Act of 1939 because of available exemptions therefrom. Neither the Securities and Exchange Commission nor any federal, state, municipal or other governmental agency will pass upon the accuracy, completeness or adequacy of this Official Statement. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -iii-

6 TABLE OF CONTENTS Page INTRODUCTION... 1 THE 2007A PROJECT... 4 SOURCES AND USES OF FUNDS... 5 THE AUTHORITY... 5 THE SERIES 2007A BONDS... 8 SOURCES OF PAYMENT AND SECURITY OF THE SERIES 2007A BONDS BONDHOLDERS RISKS FINANCIAL STATEMENTS TAX MATTERS EXISTING RELATIONSHIPS CONTINUING DISCLOSURE MISCELLANEOUS APPENDIX I APPENDIX II APPENDIX III APPENDIX IV CERTAIN INFORMATION REGARDING LA SALLE UNIVERSITY AUDITED FINANCIAL STATEMENTS OF LA SALLE UNIVERSITY FOR THE FISCAL YEARS ENDED MAY 31, 2006 AND 2005 SUMMARY OF LEGAL DOCUMENTS FORM OF OPINION OF BOND COUNSEL The Table of Contents is for convenience of reference only and does not list all of the subjects in this Official Statement. In all instances, reference should be made to the complete Official Statement to determine the subjects discussed in it. -iv-

7 $52,875,000 PENNSYLVANIA HIGHER EDUCATIONAL FACILITIES AUTHORITY (Commonwealth of Pennsylvania) LA SALLE UNIVERSITY TAX-EXEMPT FIXED RATE REVENUE BONDS, SERIES 2007A INTRODUCTION The purpose of this Official Statement (which includes the cover page and the Appendices hereto) of the Pennsylvania Higher Educational Facilities Authority (the Authority ), 1035 Mumma Road, Wormleysburg, Pennsylvania, 17043, is to furnish certain information with respect to the Authority, La Salle University (the University ) and the Authority s $52,875,000 aggregate original principal amount of La Salle University Tax-Exempt Fixed Rate Revenue Bonds, Series 2007A (the Series 2007A Bonds ) issued under a trust indenture, dated as of October 1, 2007, (the Series 2007A Indenture ), entered into by and between the Authority and The Bank of New York Trust Company, N.A., as trustee (the Trustee ), having a corporate trust office in Philadelphia, Pennsylvania. The Authority is a body corporate and politic, constituting a public corporation and a governmental instrumentality of the Commonwealth of Pennsylvania (the Commonwealth ), created by the Pennsylvania Higher Educational Facilities Authority Act of 1967 (Act No. 318 of the General Assembly of the Commonwealth of Pennsylvania, approved December 6, 1967, as amended) (the Act ). The Authority is authorized under the Act, among other things, to acquire, construct, improve, hold and use any property and any educational facility (as therein defined) and, with respect to a college (including universities), to finance projects by making loans to colleges, to issue bonds and other obligations for the purpose of paying the costs of projects, to charge and collect amounts from colleges for the payment of the principal of and interest on its obligations and the payment of expenses of the Authority, to issue bonds and to pledge all or any of the revenues of the Authority for all or any, of such obligations, and to enter into trust indentures providing for the issuance of such obligations and for their payment and security. The Series 2007A Bonds are being issued under the Act pursuant to a resolution of the Authority adopted on June 14, 2007 (the Resolution ) and pursuant to the Series 2007A Indenture. The University is a private Catholic co-educational institution offering undergraduate and graduate instruction, located in the City of Philadelphia, Pennsylvania, with a satellite campus located in Bucks County, Pennsylvania. The University has approximately 6,200 students of whom approximately 4,300 are undergraduate students. The University is affiliated with the Brothers of the Christian Schools, a nonclerical Roman Catholic order, and is administered by an independent Board of Trustees. See APPENDIX I CERTAIN INFORMATION REGARDING LA SALLE UNIVERSITY. Pursuant to a Series 2007A Loan and Security Agreement dated as of October 1, 2007 (the Series 2007A Loan Agreement ), between the Authority and the University, the Authority will lend the proceeds of the Series 2007A Bonds to the University for the purpose of undertaking the 2007A Project (hereinafter described). The University has agreed in the Series

8 2007A Loan Agreement, among other things, to make loan payments to the Trustee as assignee of the Authority s rights under the Series 2007A Loan Agreement, at such times and in such amounts as to provide for payment of the principal of, and interest on, the Series 2007A Bonds as well as certain administrative costs of the Authority. In the Series 2007A Loan Agreement, the University will pledge and assign its Unrestricted Gross Revenues as security for its obligations thereunder, equally and ratably with additional bonds presently outstanding, or which hereafter may be issued, and with the holders and owners of Parity Indebtedness subject to the 2007 Intercreditor Agreement, as subsequently defined. See APPENDIX III SUMMARY OF LEGAL DOCUMENTS THE LOAN AGREEMENT Security for Obligations of the University. The Authority has previously issued the following prior series of outstanding revenue bonds (collectively, the Prior Bonds ) for the purpose of financing prior projects on behalf of the University: La Salle University Revenue Bonds, Series of 1993 (the 1993 Bonds ), issued in the initial principal amount of $11,381, ($15,114, of which is currently outstanding); 1 La Salle University Revenue Bonds, Series of 1996 (the 1996 Bonds ), issued in the original aggregate principal amount of $17,045,000 ($11,885,000 of which is currently outstanding); La Salle University Revenue Bonds, Series of 1998 (the 1998 Bonds ), issued in the original aggregate principal amount of $17,455,000 ($9,770,000 of which is currently outstanding); and La Salle University Revenue Bonds, Series 2003 (the 2003 Bonds ), issued in the original aggregate principal amount of $37,665,000 ($37,665,000 of which is currently outstanding). See Additional Indebtedness herein and see APPENDIX I CERTAIN INFORMATION REGARDING LA SALLE UNIVERSITY Long-Term Debt. The 1993 Bonds, the 1996 Bonds and the 1998 Bonds were issued by the Authority pursuant to a Trust Indenture dated as of October 1, 1984, as amended and supplemented (the Original Indenture ) and as further amended and supplemented by a Fifth Supplemental Indenture dated as of March 15, 1993, a Seventh Supplemental Indenture dated as of April 15, 1996 and an Eighth Supplemental Indenture dated as of April 15, 1998 (the Original Indenture as so amended and supplemented is referred to as the 1984 Indenture ), each between the Authority and The Bank of New York Trust Company, N.A., as successor trustee (in such capacity, the 1984 Trustee ). The proceeds of the 1993 Bonds, the 1996 Bonds and the Consisting of current interest bonds outstanding in the principal amount of $490,000 and capital appreciation bonds having an accreted value at maturity of $18,720,000 (the accreted value thereof as of May 31, 2007 is $14,624,060.30). -2-

9 Bonds were loaned to the University by the Authority pursuant to a Loan and Security Agreement dated as of October 1, 1984, and supplements thereto dated as of March 15, 1993, April 15, 1996, and April 15, 1998, respectively, between the Authority an the University (collectively, the 1984 Loan Agreement ). The 1993 Bonds, the 1996 Bonds and a portion of the 1998 Bonds will be refunded with the proceeds of the Series 2007A Bonds as further described herein. The remaining outstanding 1998 Bonds will be refunded with proceeds of an additional series of 2007 Bonds. The 2003 Bonds were issued by the Authority pursuant to a Trust Indenture dated as of October 1, 2003, between the Authority and The Bank of New York Trust Company, N.A., as successor trustee (in such capacity, the 2003 Trustee ). The proceeds of the 2003 Bonds were loaned to the University by the Authority pursuant to a Loan and Security Agreement dated as of October 1, 2003, between the Authority and the University (the 2003 Loan Agreement ). For the purpose of securing the payment of each series of the Prior Bonds, the University has pledged and assigned its Unrestricted Gross Revenues to the 1984 Trustee and the 2003 Trustee, pursuant to the 1984 Loan Agreement and the 2003 Loan Agreement, respectively. In addition to the Series 2007A Bonds, the Authority, for the benefit of the University, intends to issue, concurrently with the Series 2007A Bonds, its La Salle University Tax-Exempt Variable Rate Revenue Bonds, Series 2007B (the Series 2007B Bonds ) (in the approximate amount of $46,840,000) and its La Salle University Taxable Variable Rate Revenue Bonds, Series 2007C (the Series 2007C Bonds ) (in the approximate amount of $2,980,000) in order to fund portions of the 2007 Project (as defined below). Payment of the principal of and interest on such Series 2007B Bonds and Series 2007C Bonds will constitute Parity Indebtedness secured by a security interest in the Unrestricted Gross Revenues of the University on an equal and ratable basis with the Series 2007A Bonds and the outstanding Prior Bonds. The University may enter into an interest rate cap agreement (the Interest Rate Cap Agreement ) relating to the Series 2007B Bonds and/or Series 2007C Bonds. In connection with issuance and delivery of the Series 2007A Bonds, the University, the 2003 Trustee, the trustee for the Series 2007B Bonds (the 2007B Trustee ), the trustee for the Series 2007C Bonds, (the 2007C Trustee ), and the Trustee will enter into an Intercreditor Agreement dated as of October 1, 2007 (the 2007 Intercreditor Agreement ) providing for the inclusion of the obligations of the University under the Series 2007A Loan Agreement with respect to the Series 2007A Bonds, as additional Parity Indebtedness secured by the pledge and assignment of the Unrestricted Gross Revenues of the University on a pro rata basis with the obligations of the University under the 2003 Loan Agreement and the loan agreements to be entered into in connection with the Series 2007B Bonds and the Series 2007C Bonds. Such obligations, together with other long-term debt of the University secured by a parity lien on the Unrestricted Gross Revenues of the University as permitted under the Series 2007A Loan Agreement, are sometimes referred to herein as Parity Indebtedness, and the 2003 Loan Agreement and the Series 2007A Loan Agreement and each other agreement or instrument evidencing any Parity Indebtedness are sometimes referred to herein as Parity Debt Agreements. See SOURCES OF PAYMENT AND SECURITY OF THE SERIES 2007A BONDS 2007 Intercreditor Agreement herein. -3-

10 The University s obligations with respect to the Series 2007A Bonds are not secured by a mortgage with respect to any part of the University s campus or other real property of the University or a lien or security interest in any personal property of the University other than its Unrestricted Gross Revenues. See SOURCES OF PAYMENTS AND SECURITY OF THE SERIES 2007A BONDS No Mortgage for Series 2007A Bonds herein. If and when included in this Official Statement, the words expects, forecasts, projects, intends, anticipates, estimates, assumes, and analogous expressions are intended to identify forward-looking statements and such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those that have been projected. Such risks and uncertainties which could affect the amount of revenue collected by the University include, among others, changes in economic conditions and various other events, conditions and circumstances, many of which are beyond the control of the University. Such forward-looking statements speak only as of the date of this Official Statement. The University disclaims any obligation or undertaking to release publicly any updated or revisions to any forward-looking statement contained herein to reflect any changes in the University s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The general descriptions of various legal documents set forth in this Official Statement do not purport to be comprehensive or definitive and reference should be made to each document for complete details of all terms and conditions thereof. All statements herein are qualified in their entirety by reference to the terms of each such document. Copies of all documents referred to herein are available for inspection during normal business hours at the corporate trust office of the Trustee located in Philadelphia, Pennsylvania. Certain capitalized terms and phrases used herein have the meanings ascribed to them in the legal documents. See APPENDIX III SUMMARY OF LEGAL DOCUMENTS DEFINITIONS. THE SERIES 2007A BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY. NEITHER THE GENERAL CREDIT OF THE AUTHORITY NOR THE CREDIT OR TAXING POWER OF THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2007A BONDS, NOR SHALL SUCH SERIES 2007A BONDS BE OR BE DEEMED TO BE GENERAL OBLIGATIONS OF THE AUTHORITY OR OBLIGATIONS OF THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF, NOR SHALL THE COMMONWEALTH OR ANY POLITICAL SUBDIVISION THEREOF BE LIABLE FOR PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR THE INTEREST ON THE SERIES 2007A BONDS. THE AUTHORITY HAS NO TAXING POWER. THE 2007A PROJECT The Authority is issuing the Series 2007A Bonds to provide funds which are expected to be sufficient to provide a portion of the funds required for a project (the 2007 Project ) consisting of: (i) the current and advance refunding of the Authority s outstanding 1993 Bonds; (ii) the current refunding of the Authority s outstanding 1996 Bonds; (iii) the advance refunding of a portion of the Authority s outstanding 1998 Bonds; ((i), (ii) and (iii), -4-

11 together, the Refunding Project ); (iv) (a) the construction of a Science and Technology Center at the University s main campus (the Main Campus ) located in Philadelphia, Pennsylvania; (b) the reimbursement of the purchase price for the acquisition of the Germantown Hospital campus adjacent to the Main Campus (the West Campus ); (c) the construction of a bridge to connect the Main Campus to the West Campus; (d) the renovation of the University s West Campus, St. Benilde Tower facility to support its School of Nursing; (e) the development of laboratories in the Center Tower of West Campus; (f) the reimbursement of the purchase price for the acquisition by the University of two additional properties adjacent to the West Campus; (g) the investment in capital improvements to the West Campus, including electrical upgrades, life safety improvements, building shell and roof replacements and other improvements; and (h) a multi-year maintenance and engineering plan consisting of improvements to the University s Residence Halls and various other facilities at the University ((a) through (h), together, the New Money Project ); (v) the funding of a debt service reserve fund securing payment of the Series 2007A Bonds; and (vi) the payment of costs of issuing the Series 2007A Bonds. SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of the proceeds of the Series 2007A Bonds and other available funds: Sources of Funds Par Amount of Series 2007A Bonds $ 52,875, Net Original Issue Discount (92,562.20) Existing Debt Service Reserve Fund 1,136, Total $ 53,918, Uses of Funds Refunding Project $ 35,931, New Money Project 13,129, Debt Service Reserve Fund 4,034, Costs of Issuance 2 823, Total $ 53,918, THE AUTHORITY The Authority is a body corporate and politic, constituting a public corporation and a governmental instrumentality of the Commonwealth of Pennsylvania (the Commonwealth ), created by the Act. The Authority s address is 1035 Mumma Road, Wormleysburg, Pennsylvania Includes Underwriters discount, Authority fee, initial and first annual Trustee fee, legal fees, audit related fees, verification agent fees, rating agency fees, printing costs and miscellaneous expenses. -5-

12 Under the Act, the Authority consists of the Governor of the Commonwealth, the State Treasurer, the Auditor General, the Secretary of Department of Education, the Secretary of the Department of General Services, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Minority Leader of the Senate and the Minority Leader of the House of Representatives. The President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Minority Leader of the Senate and the Minority Leader of the House of Representatives may designate a member of their respective legislative bodies to act as a member of the Authority in his or her stead. The members of the Authority serve without compensation, but are entitled to reimbursement for all necessary expenses incurred in connection with the performance of their duties as members. The powers of the Authority are exercised by a governing body consisting of the members of the Authority acting as a board. The Authority is authorized under the Act to, among other things, acquire, construct, finance, improve, maintain and operate any educational facility (as therein defined), with the rights and powers, inter alia: (1) to finance projects for colleges (including universities) by making loans to such colleges which may be evidenced by, and secured as provided in, loan agreements, security agreements or other contracts, leases or agreements; (2) to borrow money for the purpose of paying all or any part of the cost of construction, acquisition, financing, alteration, reconstruction and rehabilitation of any education facility which the Authority is authorized to acquire, construct, finance, improve, install, maintain or operate under the provisions of the Act and to pay the expenses incident to the provision of such loans; and (3) to issue bonds and other obligations for the purpose of paying the cost of projects, and to enter into trust indentures providing for the issuance of such obligations and for their payment and security. As of June 30, 2007, revenue bonds and notes of the Authority issued to finance various projects in the Commonwealth were outstanding in the amount of $5,359,935,447. None of the revenues of the Authority with respect to its revenue bonds and notes issued for the benefit of other institutions will be pledged as security for any bonds or notes issued for the benefit of the University. Further, no revenue bonds and notes issued for the benefit of other institutions will be payable from or secured by the revenues of the Authority or other moneys securing any bonds or notes issued for the benefit of the University. The Authority has issued, and may continue to issue, other series of bonds for the purpose of financing other projects, including other educational facilities. Each such series of bonds to the extent issued to benefit educational institutions other than the University is or will be secured by instruments separate and apart from the Series 2007A Indenture securing the Series 2007A Bonds. The Act provides that the Authority is to obtain from the Pennsylvania State Public School Building Authority, for a fee, those executive, fiscal and administrative services as may be required to carry out the functions of the Authority under the Act. Accordingly, the Authority and the State Public School Building Authority share an executive, fiscal and administrative staff, which currently numbers 14 people, and operates under a joint administrative budget. The following are key staff members of the PHEFA who are involved in the administration of the financing and projects: -6-

13 William C. Bostic Executive Director Mr. Bostic has served as the Executive Director of both the Pennsylvania Higher Educational Facilities Authority (PHEFA) and the State Public School Building Authority (SPSBA) since July 1, He is a graduate of Tennessee State University with a bachelor s degree in political science, and holds a master s degree in urban and regional planning from the Graduate School of Public and International Affairs at the University of Pittsburgh. Prior to his present post, Mr. Bostic was the Executive Director of the Pennsylvania Housing Finance Agency, having previously served as the Agency s Chairman while serving as the cabinet Secretary of the Pennsylvania Department of Community Affairs. Mr. Bostic s thirty-nine year professional career has included public service at the local, metropolitan, state, and national levels in executive, administrative management, and public policy positions. Robert Baccon Assistant Executive Director Mr. Baccon has served as the Assistant Executive Director of both the Pennsylvania Higher Educational Facilities Authority (PHEFA) and the State Public School Building Authority (SPSBA) since He is a graduate of St. John s University with a bachelor s degree in management, and holds a master s degree in international business from the Columbia University Graduate School of Business. Prior to his present post, Mr. Baccon held financial management positions with multinational U.S. corporations and was Vice President - Finance for a major highway construction contractor. E. Raymond Dumas Comptroller & Director of Financial Management Mr. Dumas has served as the Comptroller & Director of Financial Management of both the Pennsylvania Higher Educational Facilities Authority (PHEFA) and the State Public School Building Authority (SPSBA) since He is a graduate of Elizabethtown University with a bachelor s degree in accounting, and holds a master s degree in government administration from the University of Pennsylvania. Prior to his present employment, Mr. Dumas served in various capacities in Pennsylvania state government, including Finance Officer for the State Lottery and Fiscal Officer for the Commerce Department. Beverly M. Nawa Administrative Officer Mrs. Nawa has served as the Administrative Officer of both the Pennsylvania Higher Educational Facilities Authority (PHEFA) and the State Public School Building Authority (SPSBA) since August She is a graduate of Alvernia University with a bachelor s degree in business administration. Prior to her present employment, Mrs. Nawa served as an Audit Senior and an Accounting Systems Analyst with the Department of the Auditor General. THE AUTHORITY HAS NOT PREPARED OR ASSISTED IN THE PREPARATION OF THIS OFFICIAL STATEMENT, EXCEPT THE STATEMENTS UNDER -7-

14 THIS SECTION AND UNDER THE HEADING ABSENCE OF LITIGATION BELOW IN RESPECT OF THE AUTHORITY, AND, EXCEPT AS AFORESAID, THE AUTHORITY DISCLAIMS RESPONSIBILITY FOR THE DISCLOSURES SET FORTH HEREIN MADE IN CONNECTION WITH THE OFFER, SALE, AND DISTRIBUTION OF THE SERIES 2007A BONDS. Description of the Series 2007A Bonds THE SERIES 2007A BONDS The Series 2007A Bonds will be dated as of their date of delivery, will bear interest at the rates, mature on the dates and be offered at the initial prices or yields, all as set forth on the inside cover page of this Official Statement. Interest on the Series 2007A Bonds is payable until maturity or prior redemption semiannually on each May 1 and November 1, commencing May 1, The principal or Redemption Price of the Series 2007A Bonds, as appropriate, will be payable upon presentation at the designated corporate trust agency office of the Trustee, The Bank of New York Trust Company, N.A., in East Syracuse, New York, or at such other corporate trust agency office as may be designated by the Trustee or any duly authorized paying agent. The Series 2007A Bonds will be issued as fully registered bonds in the denomination of $5,000 or any integral multiple thereof and will have the exchange provisions as provided in the Series 2007A Indenture. The Series 2007A Bonds will be issued initially in book-entry form only, as described under Book-Entry Only System below. In the event that the Series 2007A Bonds are no longer subject to the book-entry only system, interest on the Series 2007A Bonds will be payable by check mailed by the Trustee to the addresses of the registered owners of the Series 2007A Bonds as shall appear on the registration books maintained by the Trustee as of the close of business on the fifteenth day of the calendar month (whether or not a business day) next preceding the interest payment date (the Regular Record Date ) or at the option of a registered owner of Series 2007A Bonds in an aggregate principal amount of $1,000,000 or more, by wire transfer within the continental United States of immediately available funds to such bank account number as such owner shall specify in writing to the Trustee not later than the close of business on the twentieth business day preceding the Regular Record Date for the payment of such interest. Any interest on any Series 2007A Bond not so punctually paid or provided for shall cease to be payable to the registered owner in whose name such Bond is registered on the relevant Regular Record Date and shall instead be paid on a special interest payment date to the registered owner in whose name the Series 2007A Bond is registered at the closing of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee. Notice of such date shall be given by first class mail, postage prepaid, to such registered owner not less than ten days prior to such special record date but not more than thirty days prior to such special interest payment date so established. Unless the book-entry system for the Series 2007A Bonds is discontinued, prospective purchasers will acquire beneficial ownership interests in the -8-

15 Series 2007A Bonds, in denominations of $5,000 or any integral multiple thereof, but will not receive Series 2007A Bond certificates representing such ownership interest. Book-Entry Only System Portions of the following information concerning The Depository Trust Company ( DTC ), New York, New York, and DTC s book-entry only system have been obtained from DTC. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Authority, the University and the Underwriters believe to be reliable; however, the Authority, the University and the Underwriters take no responsibility for the accuracy thereof and make no representation as to the accuracy of such information. General. DTC will act as securities depository for the Series 2007A Bonds. The Series 2007A Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2007A Bond certificate will be issued for each maturity of the Series 2007A Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest depository, is a limited-purpose 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 DTC holds and provides asset servicing for over 2 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 85 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 securities certificates. 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, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC, 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 ( Indirect Participants ). DTC has Standard & Poor s 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 Purchases of Series 2007A Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2007A Bonds on DTC s records. The ownership interest of each actual purchaser of each Series 2007A Bond (the Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. -9-

16 Beneficial Owners will not receive written confirmation from DTC of their purchase. 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 Series 2007A 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 Series 2007A Bonds, except in the event that use of the book-entry system for the Series 2007A Bonds is discontinued. To facilitate subsequent transfers, all Series 2007A 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 Series 2007A Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2007A Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Series 2007A 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. 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 Series 2007A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2007A Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Series 2007A Indenture. For example, Beneficial Owners of Series 2007A Bonds may wish to ascertain that the nominee holding the Series 2007A 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. Redemption notices shall be sent to DTC. If less than all of the Series 2007A Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Series 2007A Bonds unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the Regular Record Date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Series 2007A Bonds are credited on the Regular Record Date (identified in a listing attached to the Omnibus Proxy). Payments of principal or Redemption Price of and interest on the Series 2007A Bonds will be paid 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 -10-

17 receipt of funds and corresponding detail information from the Authority or the Trustee, as applicable, on 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 nor its nominee, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal or Redemption Price and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Series 2007A Bond certificates will be printed and delivered. So long as Cede & Co. is the registered owner of the Series 2007A Bonds, as nominee of DTC, references herein to the bondholders or registered owners of the Series 2007A Bonds means Cede & Co., not the Beneficial Owners of the Series 2007A Bonds. THE AUTHORITY, THE UNIVERSITY, THE TRUSTEE AND THE UNDERWRITERS CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC WILL DISTRIBUTE TO ITS PARTICIPANTS OR THAT DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL DISTRIBUTE TO BENEFICIAL OWNERS OF THE SERIES 2007A BONDS (I) PAYMENTS OF THE PRINCIPAL OR REDEMPTION PRICE OF, OR INTEREST ON, THE SERIES 2007A BONDS, OR (II) CONFIRMATION OF OWNERSHIP INTERESTS IN THE SERIES 2007A BONDS, OR (III) REDEMPTION OR OTHER NOTICES, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT RULES APPLICABLE TO DTC ARE ON FILE WITH THE SEC AND THE CURRENT PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH ITS PARTICIPANTS ARE ON FILE WITH DTC. NONE OF THE AUTHORITY, THE UNIVERSITY, THE TRUSTEE OR THE UNDERWRITERS WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC, DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OF THE SERIES 2007A BONDS WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT, (II) THE PAYMENT BY DTC TO ANY DIRECT PARTICIPANT OR BY ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AMOUNT OR REDEMPTION OF, OR INTEREST ON, ANY SERIES 2007A BOND, (III) THE DELIVERY OF ANY NOTICE BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT, (IV) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2007A -11-

18 BONDS, OR (V) ANY OTHER ACTION TAKEN BY DTC, ANY DIRECT PARTICIPANT OR ANY INDIRECT PARTICIPANT. Discontinuation of Book-Entry Only System. DTC may determine to discontinue providing its service with respect to the Series 2007A Bonds at any time by giving notice to the Authority and the Trustee and discharging its responsibilities with respect thereto under applicable law. In addition, the Authority, at the direction of the University, may decide at any time to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository) with respect to any Series 2007A Bond. In either event, if a successor securities depository is not appointed, certificates for the applicable Series 2007A Bonds would be printed and delivered, and the following provisions would apply, subject to the further conditions set forth in the Series 2007A Indenture. Delivery of Certificates. Series 2007A Bond certificates in fully registered form will be delivered to, and registered in the names of, the DTC Participants or such other persons as such DTC Participants may specify (which may be the Indirect Participants or beneficial owners), in authorized denominations of $5,000 or integral multiples thereof. The ownership of the Series 2007A Bonds so delivered (and any Series 2007A Bonds thereafter delivered upon a transfer or exchange described below) shall be registered on the bond register (the Bond Register ) of the Authority to be maintained by the Trustee at its corporate trust office located in Philadelphia, Pennsylvania and the Authority and the Trustee shall be entitled to treat the registered owners of such Series 2007A Bonds, as their names appear on the Bond Register as of the appropriate dates, as the owners thereof for all purposes described herein and in the Series 2007A Indenture. Transfers and Exchanges. Prior to the termination of the book-entry only system described above, transfers of the Series 2007A Bonds may be affected only as described under Book-Entry Only System above. In the event such book-entry only system is terminated and not replaced, then the Series 2007A Bonds may be transferred or exchanged only upon presentation thereof to the Trustee, accompanied by an instrument of transfer duly executed by the registered owner thereof or his authorized representative, and subject to such additional requirements set forth in the Series 2007A Indenture or as may be established by the Trustee. The Trustee will not be required to exchange or transfer any Series 2007A Bonds during the period from the date of selection of Series 2007A Bonds to be redeemed to the date of mailing the related notice of redemption, or to transfer or exchange any Series 2007A Bonds selected or called for redemption in whole or in part. No service charge will be made to the Bondholders for any exchange or transfer, but the Authority or the Trustee may require payment of a sum sufficient to pay any tax, fee, or other governmental charge that may be imposed in relation thereto and may require that such amount be paid before any new Series 2007A Bond is delivered. In the event any Series 2007A Bond is mutilated, lost, stolen or destroyed, the Authority may execute and the Trustee may authenticate a new bond of like tenor and denomination in accordance with the provisions of the Series 2007A Indenture pursuant to which the Series 2007A Bonds are issued and are secured, and the Authority and the Trustee may charge the registered owner of such Series 2007A Bond with their reasonable fees and expenses and require indemnity in connection therewith. -12-