If, within 30 days after receiving City's written notice of a breach of this Agreement for violating the HCAO, the Bank fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Bank fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, City shall have the right to pursue the remedies set forth in Section 12Q.5(f)(l-5). Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to City.
4886-4749-3705.9 Exhibit D-6
(iv) Any subcontract entered into by the Bank shall require the subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section. The Bank shall notify City's Office of Contract Administration when it enters into such a subcontract and shall certify to the Office of Contract Administration that it has notified the subcontractor of the obligations under the HCAO and has imposed the requirements of the HCAO on subcontractor through the subcontract. The Bank shall be responsible for its subcontractors' compliance with this Chapter. If a subcontractor fails to comply, the City may pursue the remedies set forth in this Section against the Bank based on the subcontractor's failure to comply, provided that City has first provided the Bank with notice and an opportunity to obtain a cure of the violation. (v) The Bank shall not discharge, reduce in compensation, or otherwise discriminate against any employee for notifying City with regard to the Bank's noncompliance or anticipated noncompliance with the requirements of the HCAO, for opposing any practice proscribed by the HCAO, for participating in proceedings related to the HCAO, or for seeking to assert or enforce any rights under the HCAO by any lawful means.
(vi) The Bank represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the HCAO. (vii) The Bank shall maintain employee and payroll records in compliance with the California Labor Code and Industrial Welfare Commission orders, including the number of hours each employee has worked on the City Contract. (viii) The Bank shall keep itself informed of the current requirements of the HCAO.
(ix) The Bank shall provide reports to the City in accordance with any reporting standards promulgated by the City under the HCAO, including reports on subcontractors and subtenants, as applicable.
(x) The Bank shall provide City with access to records pertaining to compliance with HCAO after receiving a written request from City to do so and being provided at least ten business days to respond.
(xi) The Bank shall allow City to inspect the Bank's job sites and have access to the Bank's employees in order to monitor and determine compliance with HCAO. (xii) The City may conduct random audits of the Bank to ascertain its compliance with HCAO. The Bank agrees to cooperate with City when it conducts such audits.
(xiii) If the Bank is exempt from the HCAO when this Agreement is executed because its amount is less than $25,000 ($50,000 for nonprofits), but the Bank later enters into an agreement or agreements that cause the Bank's aggregate amount of all agreements with City to reach $75,000, all the agreements shall be thereafter subject to the HCAO. This obligation arises on the effective date of the agreement that causes the 4886-4749-3705.9 Exhibit D-7
cumulative amount of agreements between the Bank and the City to be equal to or greater than $75,000 in the fiscal year.
(m) Prohibition on Political Activity with City Funds. In accordance with San Francisco Administrative Code Chapter 12.G, the Bank may not participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure (collectively, "Political Activity") in the performance of the services provided under this Agreement. The Bank agrees to comply with San Francisco Administrative Code Chapter 12.G and any implementing rules and regulations promulgated by the City's Controller. The terms and provisions of Chapter 12.G are incorporated herein by this reference. In the event the Bank violates the provisions of this section, the City may, in addition to any other rights or remedies available hereunder, (i) terminate this Agreement, and (ii) prohibit the Bank from bidding on or receiving any new City contract for a period of two (2) years. The Controller will not consider the Bank's use of profit as a violation of this section. (n) Grqfjiti Removal. Graffiti is detrimental to the health, safety and welfare of the community in that it promotes a perception in the community that the laws protecting public and private property can be disregarded with impunity. This perception fosters a sense of disrespect of the law that results in an increase in crime; degrades the community and leads to urban blight; is detrimental to property values, business opportunities and the enjoyment of life; is inconsistent with the City's property maintenance goals and aesthetic standards; and results in additional graffiti and in other properties becoming the target of graffiti unless it is quickly removed from public and private property. Graffiti results in visual pollution and is a public nuisance. Graffiti must be abated as quickly as possible to avoid detrimental impacts on the City and its residents, and to prevent the further spread of graffiti.
The Bank shall remove all graffiti from any real property owned or leased by such Bank in the City and County of San Francisco within forty eight ( 48) hours of the earlier of such Bank's (i) discovery or notification of the graffiti or (ii) receipt of notification of the graffiti from the Department of Public Works. This Section is not intended to require any Bank to breach any lease or other agreement that it may have concerning its use of the real property. The term "graffiti" means any inscription, word, figure, marking or design that is affixed, marked, etched, scratched, drawn or painted on any building, structure, fixture or other improvement, whether permanent or temporary, including by way of example only and without limitation, signs, banners, billboards and fencing surrounding construction sites, whether public or private, without the consent of the owner of the property or the owner's authorized agent, and which is visible from the public right-of-way. "Graffiti" shall not include: (A) any sign or banner that is authorized by, and in compliance with, the applicable requirements of the San Francisco Public Works Code, the San Francisco Planning Code or the San Francisco Building Code; or (B) any mural or other painting or marking on the property that is protected as a work of fine art under the California Art Preservation Act (California Civil Code Sections 987 et seq.) or as a work of visual art under the Federal Visual Artists Rights Act of 1990 (17 U.S.C. Section 101 et seq.).
Any failure of the Bank to comply with this Section of this Agreement shall constitute a material breach of this Agreement.
(o) Food Service Waste Reduction Requirements. The Bank agrees to comply fully with and be bound by all of the provisions of the Food Service Waste Reduction Ordinance, as 4886-4749-3 705.9 Exhibit D-8
set forth in San Francisco Environment Code Chapter 16, including the remedies provided, and implementing guidelines and rules. The provisions of Chapter 16 are incorporated herein by reference and made a part of this Agreement as though fully set forth. This provision is a material term of this Agreement. By entering into this Agreement, the Bank agrees that if it breaches this provision, the City will suffer actual damages that will be impractical or extremely difficult to determine; further, the Bank agrees that the sum of one hundred dollars ($100) liquidated damages for the first breach, two hundred dollars ($200) liquidated damages for the second breach in the same year, and five hundred dollars ($500) liquidated damages for subsequent breaches in the same year is reasonable estimate of the damage that the City will incur based on the violation, established in light of the circumstances existing at the time this Agreement was made. Such amount shall not be considered a penalty, but rather agreed monetary damages sustained by the City because of such Bank's failure to comply with this provision.
(p) Preservative-treated Wood Containing Arsenic. The Bank may not purchase preservative-treated wood products containing arsenic in the performance of this Agreement unless an exemption from the requirements of Chapter 13 of the San Francisco Environment Code is obtained from the Department of the Environment under Section 1304 of the Code. The term "preservative-treated wood containing arsenic" shall mean wood treated with a preservative that contains arsenic, elemental arsenic, or an arsenic copper combination, including, but not limited to, chromated copper arsenate preservative, annnoniacal copper zinc arsenate preservative, or ammoniacal copper arsenate preservative. The Bank may purchase preservative treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of the Environment. This provision does not preclude the Bank from purchasing preservative-treated wood containing arsenic for saltwater immersion. The term "saltwater immersion" shall mean a pressure-treated wood that is used for construction purposes or facilities that are partially or totally immersed in saltwater. ( q) Nondisclosure of Private Information. The Bank agrees to comply fully with and be bound by all of the provisions of Chapter 12M of the San Francisco Administrative Code (the "Nondisclosure of Private information Ordinance"), including the remedies provided. The provisions of the Nondisclosure of Private Information Ordinance are incorporated herein by reference and made a part of this Agreement as though fully set forth. Capitalized terms used in this section and not defined in this Agreement shall have the meanings assigned to such terms in the Nondisclosure of Private Information Ordinance. Consistent with the requirements of the Nondisclosure of Private Information Ordinance, the Bank agrees to all of the following:
(i) Neither the Bank nor any of its Subcontractors shall disclose Private Information obtained from the City in the performance of this Agreement to any other Subcontractor, person, or other entity, unless one of the following is true:
(I) the disclosure is authorized by this Agreement;
(2) the Bank received advance written approval from the Contracting Department to disclose the information; or
(3) the disclosure is required by law or judicial order. 4886+4749-3705.9 Exhibit D-9
(ii) Any disclosure or use of Private Information authorized by this Agreement shall be in accordance with any conditions or restrictions stated in this Agreement. Any disclosure or use of Private Information authorized by a Contracting Department shall be in accordance with any conditions or restrictions stated in the approval. (iii) Private Information shall mean any information that: (I) could be used to identify an individual, including without limitation, name, address, social security number, medical information, financial information, date and location of birth, and names of relatives; or (2) the law forbids any person from disclosing. (iv) Any failure of the Bark to comply with the Nondisclosure of Private Information Ordinance shall be a material breach of this Agreement. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Agreement, debar the Bank, or bring a false claim action against the Bank. (r) Proprietary or Corifidential Information of City. The Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential) (collectively, "Representatives"), (b) to the extent required or requested by any regulatory authority (including by any self-regulatory having jurisdiction or claiming to have jurisdiction over the Bank or its Representatives), (c) to the extent required by applicable laws, rule, judicial order or regulations or by any subpoena or similar legal process, ( d) to any other party to this Agreement, ( e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the City and its obligations, (g) with the consent of the City or (h) to the extent such Infonnation (i) is or becomes publicly available other than as a result of a breach of this Section by the Bank or its Representatives (ii) becomes available to the Bank or its Representatives on a nonconfidential basis from a source other than the City, (iii) has been or is subsequently independently conceived or developed by the Bank or its Representatives without reference to the Information or (iv) was within the Bank or its Representatives' possession prior to its disclosure by or on behalf of the City to the Bank or its Representatives' pursuant hereto. For the purposes of this Section, "Information" means all information received from the City relating to the City or its business, other than any such information that is available to the Bank on a nonconfidential basis prior to disclosure by the City; provided that, in the case of inf01mation received from the City after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. (s) Submitting False Claims; Monetary Penalties. Pursuant to San Francisco Administrative Code Section 21.35, any contractor, subcontractor or consultant who submits a 4886-4749-3705.9 Exhibit D-10
false claim shall be liable to the City for three times the amount of damages which the City sustains because of the false claim. A contractor, subcontractor or consultant who submits a false claim shall also be liable to the City for the costs, including attorneys' fees, of a civil action brought to recover any of those penalties or damages, and may be liable to the City for a civil penalty of up to $10,000 for each false claim. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant:
(i) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (ii) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (iii) conspires to defraud the City by getting a false claim allowed or paid by the City; (iv) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (v) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.
(t) Subcontracting. Except as otherwise provided in this Agreement, the Bank is prohibited from subcontracting this Agreement or any part of it unless such subcontracting is first approved by City in writing. Neither party shall, on the basis of this Agreement, contract on behalf of or in the name of the other party. An agreement made in violation of this provision shall confer no rights on any party and shall be null and void. (u) Non-Waiver of Rights. The omission by either party at any time to enforce any default or right reserved to it, or to require performance of any of the terms, covenants, or provisions hereof by the other party at the time designated, shall not be a waiver of any such default or right to which the party is entitled, nor shall it in any way affect the right of the party to enforce such provisions thereafter.
(v) City a Third Party Beneficiary. The City is hereby designated as a third party beneficiary for the purpose of enforcing all of the obligations of the Bank contained in this Exhibit A to this Agreement.
4886-4749-3705.9 Exhibit D-11
EXHIBITE
LIST OF QUALIFIED DEALERS
ACADEMY SECURITIES, INC.
ALAMO CAPITAL
BANK OF AMERICA MERRILL LYNCH
BARCLAYS CAPITAL INC.
BC ZIEGLER AND COMPANY
BLAYLOCK VAN, LLC
CABRERA CAPITAL MARKETS, LLC
CITIGROUP GLOBAL MARKETS INC.
DREXEL HAMILTON, LLC
FTN FINANCIAL CAPITAL MARKETS
GOLDMAN SACHS & CO. LLC
HUTCHINSON, SHOCKEY, ERLEY & CO.
INSPEREX (FORMERLY 280 SECURITIES LLC)
JP MORGAN SECURITIES LLC
JANNEY MONTGOMERY SCOTT LLC
JEFFERIES LLC
JP MORGAN SECURITIES LLC
LOOP CAPITAL MARKETS LLC
MESIROW FINANCIAL, INC.
MORGAN STANLEY & CO. LLC
PIPER SANDLER & CO.
RAMIREZ & CO., INC.
RAYMOND JAMES & ASSOCIATES, INC.
RBC CAPITAL MARKETS, LLC
RICE SECURITIES, LLC (D/B/ A RICE FINANCIAL PRODUCTS COMP ANY) SIEBERT WILLIAMS SHANK & CO., LLC
SMBC NIKKO SECURITIES AMERICA, INC. (SUMITOMO MITSUI BANKING CORP.)
STERN BROTHERS
STIFEL NICOLAUS & COMPANY, INC.
TD SECURITIES
U.S. BANK NATIONAL ASSOCIATION
UBS FINANCIAL SERVICES INC.
UMB BANK, N.A.
WELLS FARGO SECURITIES LLC
4886-4749-3705.9 Exhibit E-1
4921-9146-2003.4
NP DRAFT 11/22
FIRST AMENDMENT TO
REIMBURSEMENT AGREEMENT
BY AND BETWEEN
PUBLIC UTILITIES COMMISSION
OF THE CITY AND COUNTY OF SAN FRANCISCO
AND
BANK OF AMERICA, N.A.
DATED AS OF JANUARY [__], 2026
4921-9146-2003.4
FIRST AMENDMENT TO
REIMBURSEMENT AGREEMENT
This FIRST AMENDMENT to REIMBURSEMENT AGREEMENT , dated as of January [__], 2026 (this “ First Amendment ”), is by and between the PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO (the “ Commission”) and BANK OF AMERICA, N.A. (the “ Bank”). Terms used herein with initial capital letters and not otherwise defined shall have the respective meanings attributed thereto in the Agreement (as defined below).
RECITALS
WHEREAS, the Commission and the Bank have previously entered into the Reimbursement Agreement, dated as of March 1, 2023 (the “ Original Agreement ”), and a Fee Agreement, dated March 6, 2023 (the “ 2023 Fee Agreement ”), pursuant to which the Bank previously agreed to provide support for the payment of and interest on the Commission’s Commercial Paper Notes (Power Series), Series A-2 (Tax-Exempt) (the “Notes”) by issuing a letter of credit (the “2023 Letter of Credit”); and
WHEREAS, on June 5, 2018, the voters of the City and County of San Francisco (the “City”) approved Proposition A, which among other things, authorized the Commission to issue revenue bonds, including notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board of Supervisors of the City for the purpose of reconstructing, replacing, expanding, repairing or improving power facilities under the jurisdiction of the Commission; and
WHEREAS, the Commission and the Bank now desire to, among other things, (i) extend the Stated Expiration Date from March 6, 2026 to [March __, 2029], pursuant to this First Amendment, and (ii) execute an amended and restated fee agreement to document certain pricing changes, which will amend and restate in full, the 2023 Fee Agreement (the “ Amended and Restated Fee Agreement”); and
NOW, THEREFORE, in consideration of the foregoing, the premises and mutual covenants contained herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I. INTENTION OF PARTIES, AGREEMENT PROVISIONS.
The Commission and the Bank have entered into this First Amendment pursuant to Section 2.12 and Section 7.1 of the Original Agreement, and have entered into the Amended and Restated Fee Agreement to, among other things, exte nd the Stated Expiration Date and change other terms set forth in the Original Agreement to, among other things, extend the Stated Expiration Date and amend other terms set forth in the Original Agreement, to reflect the delivery of the Amended and Restated Fee Agreement to replace the 2023 F ee Agreement. The terms of the Original Agreement, as amended by this First Amendment (as so amended, the “ Agreement”), shall govern the rights and obligations of the Commission, and the Bank in connection with the transactions contemplated by the Agreement.
4921-9146-2003.4
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ARTICLE II. AMENDMENTS. The Original Agreement is hereby amended as follows:
(a) The definition of “Fee Agreement” in Section 1.1 of the Original Agreement is hereby amended by deleting it in its entirety and replacing it with the following:
“ ‘Amended and Restated Fee Agreement’ means that certain Amended and Restated Fee Agreement dated the First Amendment Effective Date, between the Commission and the Bank, as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof and thereof.” (b) The definition of “Program Size” in Section 1.1 of the Original Agreement is hereby amended by deleting it in its entirety and replacing it with the following:
“ ‘Program Size’ means $125,000,000.”
(c) The definition of “Reduction Amount” in Section 1.1 of the Original Agreement is hereby deleted.
(d) There is hereby added to Section 1.1 of the Original Agreement each of the following definitions, each of which is to be situated alphabetically:
“ ‘First Amendment’ means that certain First Amendment to the Reimbursement Agreement, dated as of January [__], 2026, between the Commission and the Bank.”
“ ‘First Amendment Effective Date’ means January [__], 2026.” (e) The “City Requirements” set forth in Exhibit D of the Original Agreement are hereby deleted in their entirety and replaced with the “City Requirements” set forth in Exhibit B hereto.
(f) Section 2.18(c) (“Reduction in Program Size”) of the Original Agreement is hereby deleted in its entirety and replaced with the following: “Reserved.”
(g) The “List of Qualified Dealers” set forth in Exhibit E of the Original Agreement is hereby deleted in its entirety and replaced with the “List of Qualified Dealers” set forth in Exhibit C hereto.
(h) Section 7.2(a) of the Original Agreement is deleted in its entirety and replaced with the following:
“if to the Commission:
4921-9146-2003.4
- 3 -
City and County of San Francisco
Public Utilities Commission
Attention: Chief Financial Officer
525 Golden Gate Avenue, 13th Floor
San Francisco, California 94102
Telephone: (415) 554-3155
Facsimile: (415) 554-3161
with copies to (as it relates to notices and invoices):
City and County of San Francisco
Public Utilities Commission
Attention: Capital Finance Director
525 Golden Gate Avenue, 4th Floor
San Francisco, California 94102
[email protected]”
ARTICLE III. CONDITIONS TO DELIVERY OF THIS FIRST AMENDMENT.
The amendments to the Original Agreement provided for in Article II hereof shall become effective on the First Amendment Effective Date; provided that each of the following conditions shall be fulfilled to the satisfaction of the Bank:
(a) Documentation:
(i) Executed counterparts of this First Amendment and the Amended and Restated Fee Agreement, each signed by the Commission and the Bank; (ii) The Commission shall have paid or made arrangements for payment of all costs and expenses incurred by the Bank in connection with this transaction, including without limitation reasonable attorney’s fees; provided, that the Commission shall pay the Bank’s attorney’s fees (which shall not exceed $10,000) no later than 30 days following its receipt of an invoice from such counsel; and
(iii) All other legal matters pertaining to the execution and delivery of this First Amendment and the Amended and Restated Fee Agreement shall be satisfactory to the Bank and the execution and delivery hereof by the Bank shall constitute conclusive evidence that all such legal matters have been completed to the satisfaction of the Bank.
(b) Amendment of the Letter of Credit. No later than the First Amendment Effective Date, the Bank shall execute and deliver to the Issuing and Paying Agent a certificate in the form of Annex E to the Letter of Credit (a form of which is attached hereto as Exhibit A) extending the Stated Expiration Date to [March __, 2029].
(c) Representations and Warranties True.
4921-9146-2003.4
- 4 -
(i) The representations and warranties of the Commission contained in Article 4 of the Original Agreement and in this First Amendment shall be true and correct with the same effect as though made on and as of the First Amendment Effective Date, except to the extent a representation or warranty relates specifically to an earlier date (in which case, such representation and warranty shall be true and correct as of such date) and except that the representations in Section 4.6 of the Original Agreement refers to the Commissi on’s 2025 financial statements (instead of the 2021 financial statements) which has been previously provided to the Bank and the word nationally shall hereinafter be deemed to have been deleted from Section 4.6.
(ii) In addition to the foregoing representations, the Commission hereby represents and warrants as follows:
(A) The execution, delivery and performance by the Commission of this First Amendment and the Amended and Restated Fee Agreement are within its powers, have been duly authorized by all necessary actions and do not contravene any law or any contractual restriction binding on the Commission;
(B) No further authorization, approval or other action by, and no notice or filing, is required for the due execution, delivery and performance by the Commission of this First Amendment and the Amended and Restated Fee Agreement that has not been received as of the First Amendment Effective Date; and
(C) The Commission has provided, or will cause to have
provided, written notice of this First Amendment to the Issuing and Paying Agent, the Dealers and the Rating Agencies.
(d) Absence of Certain Events. (i) On or prior to the First Amendment Effective Date, there shall not have occurred any material adverse change in the affairs, condition and/or operations, financial or otherwise, of the Commission since the date of the Commission’s fiscal year ended 2025 audited financial statements; (ii) on or prior to the First Amendment Effective Date, no change shall have occurred in any law, rule or regulation or in any interpretation thereof that, in the opinion of the Bank, would make it illegal for the Bank to execute and deliver this First Amendment; and (iii) no event has occurred which constitutes an Event of Default under the Original Agreement. (e) Bank Representations and Acknowledgements. (i) The Bank hereby represents that, as of the First Amendment Effective Date, it has no knowledge of any Change in Law that would result in increased costs; and (ii) the Bank here by acknowledges that the Commission is executing a First Amendment to Reimbursement Agreement, dated as of January [__], 2026, as may be amended, supplemented, modified and restated from time to time, in accordance with the provisions thereof, together with the Amended and Restated Fee Agreement, dated February 23, 2022, between the Commission and the Bank, as may be amended, suppl emented, modified and restated from time to time, and any similar document entered into with respect to an Alternate Facility supporting the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series), Series A-1 (the “Series A-1 Notes”).
4921-9146-2003.4
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ARTICLE IV. MISCELLANEOUS.
(a) The parties hereto acknowledge and confirm that, from and after the First Amendment Effective Date, any reference in the Original Agreement or in the other Basic Documents to the “Agreement” shall mean and refer to the Original Agreement as amended hereby. (b) Except as provided herein, the Original Agreement shall remain in full force and effect and unaffected hereby except, as set forth herein, from and after the First Amendment Effective Date.
(c) This First Amendment and the Original Agreement, as amended hereby, shall be subject to Section 7.14 of the Agreement. In case any one or more of the provisions contained herein should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired hereby. (d) This First Amendment may be executed in one or more counterparts, each of which taken together shall constitute one original and all of which shall constitute one and the same instrument.
(e) The parties agree that the electronic signature of a party to this First Amendment shall be as valid as an original signature of such party a nd shall be effective to bind such party to this First Amendment. The parties agree that any electronically signed document (including this First Amendment) shall be deemed (i) to be “written” or “in writing,” (ii) to have been signed and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. Su ch paper copies or “printouts,” if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. For purposes hereof, “electronic signature” means a manually-signed original signatu re that is then transmitted by electronic means; “transmitted by electronic means” means sent in the fo rm of a facsimile or sent via the internet as a “pdf’ (portable document format) or other replicating image attached to an e-mail message; and, “electronically signed document” means a document transmitted by electronic means and containing, or to which there is affixed, an electronic signature.
[Remainder of page intentionally left blank; signature pages to follow.] 4921-9146-2003.4
[Signature page to First Amendment to Reimbursement Agreement]
IN WITNESS WHEREOF , the parties have duly executed this First Amendment as of the day and year first above written.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By:
Name: Dennis J. Herrera
Title: General Manager
APPROVED AS TO FORM:
DAVID CHIU
City Attorney of the City and
County of San Francisco
By: ____________________________
Name: Katherine Thursby Ortega
Title: Deputy City Attorney
ACKNOWLEDGED:
By: ____________________________
Name: Anna Van Degna
Title: Director of Public Finance of the City
and County of San Francisco
BANK OF AMERICA, N.A.
By: __________________________________
Name: Jyoti Rathore
Title: Senior Vice President
4921-9146-2003.4
A-1
Exhibit A
FORM OF ANNEX E
TO
BANK OF AMERICA, N.A.
LETTER OF CREDIT NO. 68183906
NOTICE OF EXTENSION
January [__], 2026
U.S. Bank N.A.
Global Corporate Trust
100 Wall Street
Suite 600/Ex-NY-Wall
New York, New York 10005
Attention: Beverly A. Freeney, Vice President -Relationship Manager Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferab le Letter of Credit No. 68183906 dated March 6, 2023 (as amended, the “ Letter of Credit ”), established by us in your favor as Beneficiary. We hereby notify you that , in accordance with the terms of the Letter of Credit, the Stated Expiration Date (as defined in the Letter of Credit) has been extended to [
March __, 2029].
This letter shall be attached to the Letter of Credit and made a part thereof.
BANK OF AMERICA, N.A.
By:
Name:
Title:
4921-9146-2003.4
EXHIBIT B
CITY REQUIREMENTS
Laws Incorporated by Reference . The full text of the laws listed in this Exhibit, including enforcement and penalty provisions, are incorporated by reference into this Agreement. The full text of the San Francisco Munici pal Code provisions incorporated by reference in this Exhibit and elsewhere in the Agreement (“Mandatory City Requirements”) are available at http://www.amlegal.com/codes/client/san-francisco_ca/.
Conflict of Interest . By executing this Agreement, Bank ce rtifies that it does not know of any fact which constitutes a violation of Section 15.103 of the City’s Ch arter; Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code; Title 9, Chapter 7 of the California Government Code (Section 87100 et seq .); or Title 1, Division 4, Ch apter 1, Article 4 of the California Government Code (Section 1090 et seq.), and further agrees promptly to notify City if it becomes aware of any such fact during the term of this Agreement.
Prohibition on Use of Public Funds for Political Activity . In performing the Services, Bank shall comply with San Franci sco Administrative Code Chapte r 12G, which prohibits funds appropriated by City for this Agreement from being expended to partic ipate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure. Bank is subject to the enforcement and penalty provisions in Chapter 12G.
Limitations on Contributions . By executing this Agreement, Bank acknowledges its obligations under Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with, or is seeking a contract with, any department of City for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building, for a gran t, loan or loan guarantee, or for a development agreement, from making any campa ign contribution to (i) a City el ected official if the contract must be approved by that official, a board on which that official serves, or the board of a state agency on which an appointee of that official serv es; (ii) a candidate for that City elective office; or (iii) a committee controlled by su ch elected official or a candidate for that office, at any time from the submission of a proposal fo r the contract until the later of either the termination of negotiations for such contract or twelve (12) months afte r the date City approves the contract. The prohibition on contributions applies to each prospective party to the contract; each member of Bank’s board of directors; Bank’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person w ith an ownership interest of more than ten percent (10%) in Bank; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by Bank. Bank certifies that it has informed each such person of the limitation on contributions impos ed by Section 1.126 by the time it submitted a proposal for the contract, and has provided the na mes of the persons required to be informed to the City department with whom it is contracting.
4921-9146-2003.4
Tropical Hardwood and Virgin Redwood Ban . Pursuant to San Francisco Environment Code Section 804(b), City urges Bank not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical ha rdwood wood product, virgin re dwood or virgin redwood wood product.
MacBride Principles – Northern Ireland . The provisions of San Francisco Administrative Code Chapter12F are incorporated herein by this reference and made part of this Agreement. By signing this Agreement, Bank confirms that Bank has read and understood that City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the MacBride Principles, and urges San Francisc o companies to do busine ss with corporations that abide by the MacBride Principles.
4921-9146-2003.4
EXHIBIT C
LIST OF QUALIFIED DEALERS
BANK OF AMERICA MERRILL LYNCH
BARCLAY’S CAPITAL INC.
GOLDMAN SACHS & CO. LLC
J.P. MORGAN SECURITIES LLC
JEFFERIES LLC
LOOP CAPITAL MARKETS LLC
MORGAN STANLEY & CO. LLC
PIPER SANDLER & CO.
RAMIREZ & CO. (SAMUEL A. RAMIREZ & CO., INC.)
RBC CAPITAL MARKETS, LLC
SIEBERT WILLIAMS SHANK & CO., LLC
STIFEL NICOLAS & COMPANY, INC.
TD SECURITIES (USA) LLC
U.S. BANCORP INVESTMENTS, INC. U.S. BANK MUNICIPAL PRODUCTS GROUP (A DIVISION OF U.S. BANK NATIONAL ASSOCIATION)
WELLS FARGO BANK, N.A.
4918-2373-9507.5
NP DRAFT 11/22
AMENDED AND RESTATED FEE AGREEMENT
January [__], 2026
Public Utilities Commission of the City
and County of San Francisco
525 Golden Gate Avenue
San Francisco, CA 94102
Ladies and Gentlemen:
Reference is hereby made to that certain Reimbursement Agreement, dated as of March 1, 2023, as amended by that certain First Amendment to Reimbursement Agreement, dated as of January [__], 2026 (as may be further amended, supplemented, restated or otherwise modified from time to time, the “ Agreement”), between the Publ ic Utilities Commission of the City and County of San Francisco (the “Commission”) and Bank of America, N.A. (the “Bank”), relating to the Commission’s Commercial Paper Notes (P ower Series), Series A-2 (Tax-Exempt).
Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.
The purpose of this Amended and Restated Fee Agreement is to amend and restate in full the Fee Agreement, dated March 6, 2023, between the Bank and the Commission (the “2023 Fee Agreement”), and to confirm the agreement between the Bank and the Commission with respect to the Commitment Fees (as defined below) and certain other fees payable by the Commission to the Bank. This Amended and Restated Fee Agreem ent is the Fee Agreement referenced in the Agreement, and the terms hereof are incorporat ed by reference into the Agreement. For the avoidance of doubt, this Amended and Restated Fee Agreement replaces in its entirety that certain 2023 Fee Agreement, dated March 6, 2023, between the Bank and the Commission, and the parties hereby agree and confirm that such fee letter is no longer in forc e and effect (other than as a reference as noted in Paragraph 1 herein). In co nnection therewith, the Bank confirms that it has agreed to not charge any amendment fee as set forth in the 2023 Fee Ag reement, dated March 6, 2023.
In order to induce the Bank to enter into th e Agreement, the Commission agrees to make the following payments to the Bank at the following times:
(1) A commitment fee (the “Commitment Fee”) which shall be determined on a daily basis by multiplying (a) the Stated Amount at 5:00 p.m., Eastern time, on each day, by (b) the applicable Commitment Fee Rate (as defined below) in effect for such day, expressed as a decimal, and by (c) a fraction equal to 1/360. As used herein, “Commitment Fee Rate” means, initially,
0.31%, provided that in the event that any Rating (as defined below) is downgraded below “AA-” by S&P or below “AA-” by Fitch to a level included in the grid below, the Commitment Fee Rate shall be equal to the per annum percentage set fo rth in the grid below, expressed as a decimal, opposite the level that contains th e lowest Rating (it being unders tood that Level 1 contains the highest Ratings and Level 5 contains the lowest Ratings):
4918-2373-9507.5
- 2 -
LEVEL S&P RATING FITCH RATING COMMITMENT FEE RATE
Level 1: AA- or above AA- or above 0.31%
Level 2: A+ A+ 0.41%
Level 3: A A 0.61%
Level 4: A- A- 0.81%
Level 5: BBB+ and Below BBB+ and Below 2.31%
As used herein, the “Rating” means, with respect to S&P or Fitch, the lowest long-term, unenhanced rating assigned by such Rating Agency to any Bonds. Notwithstanding the foregoing, (a) in the event that the Rating is withdrawn, suspended or otherwise unavailable from S&P or Fitch for credit related reasons and/or (b) upon the occurrence and during the continuance of an Event of Default, the Commitment Fee Rate shall be increased in both cases by 1.50% per annum from the Commitment Fee Rate in effect imme diately prior thereto. Any change in the Commitment Fee Rate resulting from a change in the Rating shall be and become effective as of and on the date of the announcement of the change in the Rating. References to the Rating above is a reference to the rating category of S&P and Fitch as presently determined by S&P and Fitch and in the event of adoption of any new or cha nged rating system by S&P or Fitch, the Ratings from S&P or Fitch, as applicable, shall be deem ed to refer to the rating category under the new rating system which most closel y approximates the applicable ra ting category as currently in effect.
In connection with the Commitment Fees paya ble pursuant to this Section 1.1 for any fee period, the Bank hereby agrees to use its best ef forts to deliver an invoice to the Commission for such Commitment Fees at least thirty (30) days in advance of the payment due date; provided, however, that the failure to provide any such i nvoice shall not limit or otherwise affect the obligation of the Commission to pay such Commitment Fees when due.
The Commitment Fee shall be payable in immediately available funds semiannually in arrears commencing on the first Business Day of July 2026; provided, however, that in connection with the payment due on the fi rst Business Day of July 2026, the Commitment Fee shall be computed as follows: (X) at a rate equal to 0.29% pe r annum for the period from and including January 1, 2026 to but not including the First Amendment Effective Date (subject to any adjustments as set forth in the 2023 Fee Agreemen t), and (Y) at a rate equal to 0.31% per annum for the period from and including the First Amendment Effective Date through and including June 30, 2026; and, thereafter, on the first Business Day of each January and July to the Stated Expiration Date, and on the Stated Expiration Date, in all cases, covering the period from the date of the immediately preceding payment to such Business Day. The Bank’s determination of the Commitment Fee pursuant hereto shall be conclusive absent manifest error. (2) A fee of $250 plus the Bank’s customary wi re transfer and courier costs in respect of each drawing made under the Letter of Credit and honored by the Bank, which fee, wire transfer and courier cost shall be earned on the date such drawing is honored by the Bank and, unless paid to the Bank at the time each Drawing is reimbursed, shall be paid in arrears on the first Business Day of January that occurs after the date such drawing is honored by the Bank. 4918-2373-9507.5
- 3 -
(3) A transfer fee equal to $3,000 upon each transfer of the Letter of Credit in accordance with its terms. A transfer shall be deemed to have occurred whenever the Issuing and Paying Agent is replaced, subst ituted or changed as a result of sale, assignment, merger, consolidation, reorganization or an act of law. A transfer shall not be deemed to have occurred solely as a result of a change in the legal name of the Issuing and Paying Agent. (4) At the time any amendmen t, modification, waiver, supplement or restatement of or consent sought in respect of, the Agreement, the Basic Docu ments and any other documents delivered under the Agreement is sought by any person other than the Bank, a fee of $3,000 plus attorneys’ fees and expenses, which fee shall be earned and payable wh ether or not any such amendment, modification, waiver, supplement or restatement is executed or consent granted. Fees for complex amendments, modifications, waivers, supplements, restatements or consents shall be negotiated on a case-by-case basis.
All amounts paid pursuant to this Amended and Restated Fee Agreement shall be non- refundable and payable in immediately availabl e funds. Computations of the Commitment Fee shall be made on the basis of a 360-day year a nd actual days elapsed. All amounts paid pursuant to this Amended and Restated F ee Agreement shall be paid in the manner and to the account set forth in the Agreement.
This Amended and Restated Fee Agreement ma y not be amended or waived except by an instrument in writing signed by the Bank and the Commission.
The provisions of Section 7.14 of the Agreement shall be incorporated by this reference into this Amended and Restated Fee Agreement as if su ch provisions were set forth in their entirety except that references to “this Agreement” shall mean this Amended and Restated Fee Agreement and references to “hereunder” or “hereof’ sh all mean under this Amended and Restated Fee Agreement or of this Amended and Restated Fee Agreement.
This Amended and Restated Fee Agreem ent may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Amended and Restated Fee Agreement by electronic transmission shall be effective as delivery of a manually executed counterpart hereof.
This Amended and Restated Fee Agreement is delivered to the Commission on the understanding that neither this Amended and Restated Fee Agreement nor any of its terms shall be disclosed, directly or indirectly, to any financial institution other than the Issuing and Paying Agent unless such disclosure is made to such financia l institution in accordance with the terms of the California Public Records Act.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
4918-2373-9507.5
[Signature Page to Amended and Restated Fee Agreement CP Notes Series A-2 (Power Series)]
IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Fee Agreement to be duly executed and delivered by their respective officers thereunto duly authorized on the date first set forth above.
PUBLIC UTILITIES COMMISSION OF THE
CITY AND COUNTY OF SAN FRANCISCO
By:
Name: Dennis J. Herrera
Title: General Manager
BANK OF AMERICA, N.A.
By:
Name: Jyoti Rathore
Title: Senior Vice President
4926-7007-0137.1
[ORRICK TO REVIEW] On March 7, 2019, Orrick, Herrington & Sutcliffe LLP, Tax Counsel to the Commission (“Tax Counsel”), delivered its opinion that, based upon an analysis of then existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series A-1 Notes and Series A-2 Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the Series A-1 and Series A-2 Tax Certificates executed in connection with the issuance of the Series A-1 Notes and the Series A-2 Notes, will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and exempt from State of California personal income taxes. Tax Counsel’s opinion stated that the amount treated as interest on the Series A-1 Notes and the Series A-2 Notes and excluded from gross income will depend upon the taxpayer’s election under Internal Revenue Notice 94-84. Tax Counsel’s opinion also stated that interest on the Series A-1 Notes and the Series A-2 Notes is not a specific preference item for purposes of the federal alternative minimum tax. Tax Counsel expressed no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Series A-1 Notes or the Series A-2 Notes. Tax Counsel now observes that interest on the Series A-1 Notes and the Series A-2 Notes included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax. Tax Counsel is not updating its opinion of March 7, 2019. See “TAX MATTERS.” In the opinion of Tax Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Subseries A-3 Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the Subseries A-3 Tax Certificate executed in connection with the issuance of the Subseries A-3 Notes, will be excluded from gross income for federal income tax purposes under Section 103 of the Code. Tax Counsel is of the further opinion that interest on the Subseries A-3 Notes will not be a specific preference item for purposes of the federal individual alternative minimum tax. Tax Counsel observes that interest on the Subseries A-3 Notes included in adjusted financial statement income of certain corporations will not be excluded from th e federal corporate alternative minimum tax. The amount treated as interest on the Subseries A-3 Notes and excluded from gross income will depend upon the taxpayer’s election under Internal Revenue Notice 94-84. Tax Counsel is of the opinion that interest on the Series A-3 Notes will be exempt from State of California personal income taxes. Tax Counsel observes that interest on the Subs eries A-3-T Notes will not be excluded from gross income for federal income tax purposes under Section 103 of the Code. Tax Counsel expresses no opinion regarding any other tax consequences relat ed to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Series A-3 Notes. See “TAX MATTERS.” OFFERING MEMORANDUM DATED [∙], 2026
Ratings: See “RATINGS” herein.
Public Utilities Commission
of the City and County of San Francisco
Commercial Paper Notes
(Power Series)
Not To Exceed $125,000,000
Series A-1 (Tax-Exempt)
Supported by a letter of credit issued by
Bank of America, N.A.
Not To Exceed $125,000,000
Series A-2 (Tax-Exempt)
Supported by a letter of credit issued by
Bank of America, N.A.
Not To Exceed $100,000,000
Subseries A-3 (Tax-Exempt)
Subseries A-3-T (Taxable)
Supported by a letter of credit issued by
Sumitomo Mitsui Banking Corporation, acting through its New York Branch
The purpose of this Offering Memorandum is to provide certain general information in connection with the issuance and sale of t he Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A-1 (Tax-Exempt) (the “Series A-1 Notes”), the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A-2 (Tax-Exempt) (the “Series A-2 Notes”) and the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Subseries A-3 (Tax-Exempt) (the “Subseries A-3 Notes”) and the Subseries A-3-T (Taxable) (the “Subseries A-3-T Notes”) (togethe r, the “Series A-3 Notes,” and collectively with the Series A-1 Notes and Series A-2 Notes, the “Commercial Paper Notes” and, each, a “Series” or “Subseries” as applicable). The Public Utili ties Commission of the City and County of San Francisco (the “Commission”) may issue and have outstanding at any one time an aggregate principal amount of Series A-1 Notes up to $125,000,0 00, an aggregate principal amount of Series A-2 Notes up to $125,000,000 and an aggregate principal amount of Series A-3 Notes up to $100,000,000.
References herein to the Commercial Paper Notes, the Letters of Credit, the Reimbursement Agreements and the Issuing and Paying Agent Agreement (all as hereinafter defined) do not purport to be complete or definitive, do not constitute summaries thereof, and are qualified in their entirety by reference to the provisions thereof. The information and expressions of opinion in this Offering Memorandum are subject to change without notice after the date hereof and future use of this Offering Memorandum shall not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof. This Offering Memorandum is not to be construed as a contract between the Commission and the purchasers of the Commercial Paper Notes. Prospective purchasers of the Commercial Paper Notes are expected to conduct their own review and analysis before making an investment decision.
The Commission has entered into (i) the Reimbursement Agreement, dated as of December 1, 2015, as amended by the First Amendmen t to Reimbursement Agreement, dated as of March 1, 2019, as amended by the Second Amendment to Reimbursement Agreement, dated as of February 23, 2022 and as amended by the Third Amendment to Reimbursement Agreement, dated as of [∙] [∙], 2026 (collectively, the “Series A-1 Reimbursement Agreement”), each by and between the Commission and Bank of America, N.A. (the “Series A-1 Bank”), pursuant to which the Series A-1 Bank has issued an irrevocable direct pay letter of credit (the “Series A-1 Letter of Credit”) for the account of the Commi ssion in favor of U.S. Bank Trust Company National Association (as successor in interest to U.S. Bank, National Association), as issuing and paying agent (the “Issuing and Paying Agent”), supporting the payment of the principal of and interest on maturing Series A- 1 Notes, (ii) the Reimbursement Agreement, dated as of March 1, 2023, as amended by the First Amendment to Reimbursement Agreem ent, dated as of [ ∙] [ ∙], 2026 (together, the “Series A-2 Reimbursement Agreement”), by and between the Commission and Bank of America, N.A. (the “Series A-2 Bank”), pursuant to which the Series A-2 Bank has issued an irrevocable direct pay letter of credit (the “Series A-2 Letter of Credit”), for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A- 2 Notes, and (iii) the Reimbursement Agreement, dated as of February 1, 2025 (the “Series A-3 Reimbursement Agreement,” and, collectively with the Series A-1 Reimbursement Agreement and the Series A-2 Reimbursement Agreement, the “Reimbursement Agreements”), by and between the Commission and Sumitomo Mitsui Banking Corporation, acting through its New York Branch (the “Series A-3 Bank,” and, collectively with Series A-1 Bank and the Series A-2 Bank, the “Banks”), pursuant to which the Series A -3 Bank has issued an irrevocable direct pay letter of credit (the “Series A-3 Letter of Credit,” and, collectively with the Series A-1 Letter of Credit and the Series A-2 Letter of Credit, the “Letters of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A-3 Notes.
Unless terminated earlier or extended in accordance with their respective terms, the Series A-1 Letter of Credit will expire on [∙] [∙], 202[∙], the Series A-2 Letter of Credit will expire on [∙] [∙], 202[∙] and the Series A-3 Letter of Credit will expire on February 15, 2030.
TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT. IF FOR ANY REASON AN APPLICABLE BANK FAILS TO MAKE A PAYMENT
DUE UNDER THE APPLICABLE LETTER OF CREDIT, THE COMMISSION WOULD HAVE NO OBLIGATION TO MAKE ANY PAYMENTS WITH RESPECT TO THE
APPLICABLE COMMERCIAL PAPER NOTES EXCEPT FROM AVAILABLE POWER ENTERPRISE REVENUES, AND IT IS UNLIKELY THAT THE COMMISSION WOULD
HAVE SUFFICIENT FUNDS ON HAND AND AVAILABLE TO MAKE THE CORRESPONDING PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON SUCH COMMERCIAL PAPER NOTES. PROSPECTIVE INVESTORS SHOULD THEREFORE BASE THEIR INVESTMENT DECISION, INSOFAR AS IT RELATES TO THE CREDITWORTHIN ESS OF A SERIES OF COMMERCIAL PAPER NOTES, SOLELY ON THE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.
The Commercial Paper Notes are also payable from the proceeds of refunding Commercial Paper Notes, refunding bonds or other obligations which the Commission may authorize and issue from time to time for such purpose. In addition, the Commission has pledged Available Power Enterprise Revenues (as defi ned herein) to the repayment of the Commercial Paper Notes on a basis subordinate to repayment of the Commission’s outstanding Power Revenue Bonds (as defined herein). See “THE COMMISSION AN D THE POWER ENTERPRISE—Obligations Payable from Net Revenues” herein.
THE GENERAL FUND OF THE CITY AND COUNTY OF SAN FRANCISCO IS NOT LIABLE, AND NEITHER THE CREDIT NOR THE TAXING POWER OF THE CITY AND COUNTY OF SAN FRANCISCO IS PLEDGED, FOR THE PAYMENT OF THE COMMERCIAL PAPER NOTES AND THE INTEREST THEREON.
DEALERS FOR ALL SERIES
Barclays Goldman Sachs & Co. LLC RBC Capital Markets
TABLE OF CONTENTS
Page
i
4926-7007-0137.1
INTRODUCTION ....................................................................................................................................................... 1 THE COMMISSION AND THE POWER ENTERPRISE ......................................................................................... 2 The Commission ................................................................................................................ ........................... 2 The Power Enterprise .................................................................................................................................... 3 Sources of Revenue ....................................................................................................................................... 4 Capital Improvement Plan ............................................................................................................................. 4 Obligations Payable from Net Revenues ....................................................................................................... 4 Memorandum of Understanding (Mountain Tunnel Improvement Project) .................................................. 6 Power Purchase Agreements ......................................................................................................................... 6 Investment Policy .......................................................................................................................................... 6 Power Enterprise Financial Statements ......................................................................................................... 6 THE COMMERCIAL PAPER NOTES ...................................................................................................................... 7 Limited Obligation ........................................................................................................................................ 8 Pledge of Available Power Enterprise Revenues and Certain Funds and Accounts...................................... 9 SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT .............................. 11 Series A-1 Letter of Credit .......................................................................................................................... 11 Series A-1 Reimbursement Agreement Events of Default .......................................................................... 12 Series A-1 Reimbursement Agreement Remedies ...................................................................................... 14 SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT .............................. 14 Series A-2 Letter of Credit .......................................................................................................................... 15 Series A-2 Reimbursement Agreement Events of Default .......................................................................... 15 Series A-2 Reimbursement Agreement Remedies ...................................................................................... 18 SERIES A-3 LETTER OF CREDIT AND SERIES A-3 REIMBURSEMENT AGREEMENT .............................. 18 Series A-3 Letter of Credit .......................................................................................................................... 19 Series A-3 Reimbursement Agreement Events of Default .......................................................................... 19 Series A-3 Reimbursement Agreement Remedies ...................................................................................... 22 THE BANKS ............................................................................................................................................................. 22 Bank of America, N.A ................................................................................................................................. 22 Sumitomo Mitsui Banking Corporation, acting through its New York Branch .......................................... 23 RATINGS .................................................................................................................................................................. 24 ABSENCE OF LITIGATION ................................................................................................................................... 25 THE DEALERS ................................................................................................................... ..................................... 25 TAX MATTERS ....................................................................................................................................................... 25 LEGAL MATTERS ................................................................................................................. ................................. 29 ADDITIONAL INFORMATION ........................................................................................................ ..................... 29
APPENDIX A BOOK-ENTRY SYSTEM FOR COMMERCIAL PAPER NOTES APPENDIX B-1 COPY OF MARCH 2019 BOND COUNSEL OPINION
APPENDIX B-2 FORM OF SPECIAL TAX COUNSEL OPINION
APPENDIX B-3 FORM OF NOTE COUNSEL OPINION
APPENDIX C POWER ENTERPRISE FINANCIAL STATEMENTS
4926-7007-0137.1
INTRODUCTION
The purpose of this Offering Memorandum is to provide certain general information in connection with the issuance and sale of the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A-1 (Tax-Exempt) (the “Series A-1 Notes”), the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Series A-2 (Tax-Exempt) (the “Series A-2 Notes”) and the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Subseries A-3 (Tax-Exempt) (the “Subseries A-3 Notes”) and the Subseries A-3-T (Taxable) (the “Subseries A-3-T Notes,” and together with the Subseries A-3 Notes, the “Series A-3 Notes,” and such Series A-3 Notes, collectively with the Series A-1 Notes and Series A-2 Notes, the “Commercial Paper Notes” and, each, a “Series” or “Subseries” as applicable). The Public Utilities Commission of the City and County of San Francisco (the “Commission”) may issue and have outstanding at any one time an aggregate principal amount of Series A-1 Notes up to $125,000,000, an aggregate principal amount of Series A-2 Notes up to $125,000,000 and an aggregate principal amount of Series A-3 Notes up to $100,000,000.
Capitalized terms used herein and not defined shall have the respective meanings given such terms in the Second Amended and Restated Issuing and Paying Agent Agreement, dated as of February 1, 2025 (the “Issuing and Paying Agent Agreement”), by and between U.S. Bank Trust Company National Association, (as successor in interest to U.S. Bank, National Association), as issuing and paying agent (the “Issuing and Paying Agent”) and the Commission, as applicable. If not defined below or in the Issuing and Paying Agent Agreement, capitalized terms used herein shall have the meanings given such terms in the Trust Indenture, dated as of May 1, 2015, as amended by the First Supplemental Trust Indenture, dated as of May 1, 2015, as amended by the Second Supplemental Trust Indenture, dated as of December 1, 2021, as amended by the Third Supplemental Trust Indenture, dated as of October 1, 2023, and as the same may be subsequently supplemented, amended and modified from time to time (the “Power Bonds Indenture”), between the Commission and U.S. Bank Trust Company National Association, (as successor in interest to U.S. Bank, National Association), as trustee thereunder, providing for the issuance from time to time of the Commission’s Power Revenue Bonds, designated as the “Power Revenue Bonds,” and other obligations as provided therein, as the same may be supplemented, amended and modified from time to time.
The Commission has entered into (i) the Reimbursement Agreement, dated as of December 1, 2015, as amended by the First Amendment to Reimbursement Agreement, dated as of March 1, 2019, as amended by the Second Amendment to Reimbursement Agreement, dated as of February 23, 2022 and as amended by the Third Amendment to Reimbursement Agreement, dated as of [ ∙] [ ∙], 2026 (collectively, the “Series A-1 Reimbursement Agreement”), each by and between the Commission and Bank of America, N.A. (the “Series A-1 Bank”), pursuant to which the Series A-1 Bank has issued an irrevocable direct pay letter of credit (the “Series A-1 Letter of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A-1 Notes, (ii) the Reimbursement Agreement, dated as of March 1, 2023, as amended by the First Amendment to Reimbursement Agreement, dated as of [ ∙] [ ∙], 2026 (the “Series A-2 Reimbursement Agreement”), by and between the Commission and Bank of America, N.A. (the “Series A-2 Bank”), pursuant to which the Series A-2 Bank has issued an irrevocable direct pay letter of credit (the “Series A-2 Letter of Credit”), for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A-2 Notes, and (iii) the Reimbursement Agreement, dated as of February 1, 2025 (the “Series A-3 Reimbursement Agreement,” and, collectively with the Series A-1 Reimbursement Agreement and the Series A-2 Reimbursement Agreement, the “Reimbursement Agreements”), by and between the Commission and Sumitomo Mitsui Banking Corporation, acting through its New York Branch (the “Series A-3 Bank,” and, collectively with Series A-1 Bank and the Series A-2 Bank, the “Banks”), pursuant to which the Series A-3 Bank has issued an irrevocable direct pay letter of credit (the “Series A-3 Letter of Credit,” and, collectively with the Series A-1 Letter of Credit and the Series A-2 Letter of Credit, the “Letters of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Series A-3 Notes.
TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL
PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT. IF FOR ANY REASON A BANK FAILS TO
MAKE A PAYMENT DUE UNDER THE APPLICABLE LETTER OF CREDIT, THE COMMISSION
WOULD HAVE NO OBLIGATION TO MAKE ANY PAYMENTS WITH RESPECT TO THE
APPLICABLE COMMERCIAL PAPER NOTES EXCEPT FROM AVAILABLE POWER ENTERPRISE
2 4926-7007-0137.1
REVENUES, AND IT IS UNLIKELY THAT THE COMMISSION WOULD HAVE SUFFICIENT FUNDS
ON HAND AND AVAILABLE TO MAKE THE CORRESPONDING PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON SUCH COMMERCIAL PAPER NOTES. PROSPECTIVE INVESTORS SHOULD
THEREFORE BASE THEIR INVESTMENT DECISION, INSOFAR AS IT RELATES TO THE
CREDITWORTHINESS OF A SERIES OF COMMERCIAL PAPER NOTES, SOLELY ON THE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.
The Commercial Paper Notes are also payable from the proceeds of refunding Commercial Paper Notes, refunding bonds or other obligations which the Commission may authorize and issue from time to time for such purpose. In addition, the Commission has pledged Available Power Enterprise Revenues (as defined herein) to the repayment of the Commercial Paper Notes on a basis subordinate to repayment of the Commission’s outstanding Power Revenue Bonds (as defined above). See “THE COMMISSION AND THE POWER ENTERPRISE— Obligations Payable from Net Revenues” herein.
The information in this Offering Memorandum has been obtained from the Commission, the Banks and other sources believed to be reliable. References herein to the Ordinance (as defined herein), the Resolution (as defined herein), the Issuing and Paying Agent Agreement, the Commercial Paper Notes, the Letters of Credit and the Reimbursement Agreements do not purport to be complete or definitive, do not constitute summaries thereof, and are qualified in their entirety by reference to the provisions thereof. The information and expressions of opinion in this Offering Memorandum are subject to change without notice after the date hereof and future use of this Offering Memorandum shall not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof. This Offering Memorandum is not to be construed as a contract between the Commission and the purchasers of the Commercial Paper Notes. Prospective purchasers of the Commercial Paper Notes are expected to conduct their own review and analysis before making an investment decision.
The Commercial Paper Notes are exempt from registration under the Securities Act of 1933, as amended.
The Banks have not prepared or assisted in the preparation of this Offering Memorandum, including any financial information included herein or attached hereto, and the Banks have no responsibility for the form and content of this Offering Memorandum, or any information omitted herefrom, other than solely with respect to the related information describing the respective Banks under the related subheadi ngs under the heading “THE BANKS.” The Banks have not independently verified, make no representation regarding, nor accept any responsibility for the accuracy or completeness of this Offering Memorandum or any information or disclosure contained herein or omitted herefrom, other than solely with respect to the related information describing the respective Banks under the related subheadings under the heading “THE BANKS.” Accordingly, each of the respective Banks disclaim responsibility for the other information in this Offering Memorandum or otherwise made in connection with the offering of the Commercial Paper Notes.
THE COMMISSION AND THE POWER ENTERPRISE
The Commission
[To be reviewed by SFPUC]
The Commission operates and maintains dams and reservoirs, power generation and transmission facilities, water transmission facilities, water and wastewater treatment plants, water distribution facilities, wastewater collection facilities and power distribution facilities. The Commission’s facilities extend from the Hetch Hetchy watershed in the Sierra Nevada, across the Central Valley, over and around the southern end of San Francisco Bay and north along the San Francisco Peninsula to the City and County of San Francisco (the “City”).
The Commission, which consists of five members appointed by the Mayor of the City (the “Mayor”), is a department of the City responsible for the maintenance, operation and development of three utility enterprises: Hetch Hetchy Water and Power and CleanPowerSF, the Water Enterprise and the Wastewater Enterprise. For financial purposes, the Hetch Hetchy Water and Power and CleanPowerSF enterprise is comprised of three funds: (i) Hetch Hetchy Water, (ii) the Power Enterprise and (iii) CleanPowerSF.
Commented [NS1]: @Kwak, Eric @Kwong, Edward
@Fuchs, Daniel - is this really true? Why would we want to say it and then preclude the ability to rely on our own liquidit
y.
Commented [KE2R1]: I'm not sure where this originates
from and why this was included, but I imagine we would
have sufficient liquidity from available fund balance to cover such a payment if absolutely needed although it is
technically true that we would not have sufficient available fund balance (~$250M as of FY26Q1) if the full power CP program was drawn and needed payment.
Commented [NS3]: Reviewed by SFPUC capital finance;
WWE review is pending.
3 4926-7007-0137.1
Hetch Hetchy Water and Power. Hetch Hetchy Water and Power is comprised of two key components: Hetch Hetchy Water, which operates and maintains the Hetch Hetchy Project, and Hetch Hetchy Power (referred to in this Offering Memorandum as the “Power Enterprise”), which is responsible for all of the Commission’s power utility commercial transactions and in-City power operations. The Hetch Hetchy Project provides water for distribution through the Water Enterprise and hydroelectric power to municipal and other customers through the Power Enterprise.
CleanPowerSF. In May 2016, the Commission began serving customers through CleanPowerSF, a Community Choice Aggregation program. CleanPowerSF is a “Separate System” under the Power Bonds Indenture and financially independent from the Power Enterprise. References to the “Power Enterprise” in this Offering Memorandum do not include CleanPowerSF.
CleanPowerSF is a “Separate System” under the Power Bonds Indenture. Under CleanPowerSF, the Commission pools the electricity demands of many City residents and businesses that are retail electric distribution customers of PG&E, for the purpose of buying electricity on behalf of such customers. CleanPowerSF, which currently serves over 380,000 accounts, gives residential and commercial electricity consumers in San Francisco a choice of having their electricity supplied from clean renewable sources, such as solar, wind, and geothermal, at competitive rates. CleanPowerSF offers three products: the default “Green” product comprised of at least 50% California renewable portfolio standards (“RPS”)-eligible renewable energy; the “SuperGreen” product comprised of 100% RPS-eligible renewable energy; and the “SuperGreen Saver” product comprised of 100% RPS-eligible renewable energy in which eligible low-income customers receive a 20% bill discount. CleanPowerSF is an opt-out program and customers can choose to use CleanPowerSF or stay with Pacific Gas & Electric Company’s existing generation service. Since the Commission began serving customers through CleanPowerSF, the program has maintained an approximately 96% participation rate, or an approximately 4% opt-out rate.
Water Enterprise. Nearly 2.7 million people rely on water supplied by the Commission to meet their daily water needs through its Water Enterprise. The Commission serves as the retail water supplier for the City and is responsible for water deliveries to residents and institutions within the City limits, as well as to a number of retail accounts outside of the City limits. In addition, the Commission sells water to 27 wholesale customer entities in San Mateo, Alameda and Santa Clara Counties.
Wastewater Enterprise. The Wastewater Enterprise’s collection and treatment system consists of a combined sewer collection system conveying sewage and stormwater flows within the City to three water pollution control plants, also located within the City. Treated effluent flows are then discharged through deep-water outfalls into the San Francisco Bay and Pacific Ocean. The Wastewater Enterprise also currently provides sewage treatment service on Treasure Island pursuant to contract and operates an onsite sewage and stormwater reclamation and treatment facility at the Commission’s new headquarters at 525 Golden Gate Avenue.
Each of the Commission’s three utility enterprises is operated and managed as a separate financial entity and separate enterprise funds are maintained for each enterprise. In addition, CleanPowerSF maintains its own financial statements, and segregates its revenues and expenses from the Power Enterprise. No revenues from the Water Enterprise, the Wastewater Enterprise or CleanPowerSF have been pledged for payment of the Power Enterprise Commercial Paper Notes and no such revenues shall be available for the repayment thereof.
The Power Enterprise
The Power Enterprise was created in February 2005 as a separate system and accounting unit within Hetch Hetchy Water and Power. The Power Enterprise provides retail electric service to meet the municipal requirements of the City, including power to operate the San Francisco Municipal Transportation Agency’s streetcars and electric buses, Zuckerberg San Francisco General Hospital and Trauma Center, City Hall, police stations, fire stations and schools, certain Port of San Francisco facilities, street and traffic lights, municipal buildings and other City facilities, such as the San Francisco International Airport, and to certain public agencies and retail customers and provides pedestrian and streetlight operation and maintenance services, energy efficiency, and distributed generation services to City residents and businesses and other customers. The Power Enterprise also operates and maintains the natural gas and electric utilities systems on Treasure Island/Yerba Buena Island pursuant to an agreement with the Treasure Island Development Authority. Additionally, the Power Enterprise is obligated to provide power to the Modesto
4 4926-7007-0137.1
Irrigation District and the Turlock Irrigation District and to other customers consistent with prescribed contractual obligations and federal law.
A number of the facilities of the Hetch Hetchy Project are joint assets and are used for both water transmission and power generation and transmission, benefitting both Hetch Hetchy Water and the Power Enterprise. All publicly-owned utility power sales revenues are allocated to the Power Enterprise. Operating and capital costs benefitting the Power Enterprise and 55% of operating and capital costs that jointly benefit both Hetch Hetchy Water and the Power Enterprise are allocated to the Power Enterprise. Operating and capital costs benefitting Hetch Hetchy Water and 45% of operating capital costs jointly benefitting both Hetch Hetchy Water and the Power Enterprise are allocated to the Commission's Water Enterprise.
Sources of Revenue
On average, approximately [89.1]% of all Power Enterprise revenues were from charges for services and approximately [10.9]% of all Power Enterprise revenues were from other revenues, including rents, interest income and other revenues from Fiscal Years 2020-21 through 2024-25. During such period, approximately [66.0]% of charges for services revenues were from municipal sales, approximately [16.6]% of charges for services revenues were from other retail sales, and approximately [17.3]% of charges for services revenues were from wholesale sales.
Municipal sales declined starting in Fiscal Year 2019-20 due in large part to the COVID-19 pandemic, however, municipal sales began to recover in Fiscal Year 2021-22 due to the easing of the COVID-19 pandemic restrictions and the increase in the average rate for municipal sales. Retail sales have increased since Fiscal Year 2019-20, driven by customer growth in redevelopment areas and customers transferring to Power Enterprise service from other providers.
Wholesale sales are possible when there is excess Hetch Hetchy Project generation available for sale and are driven by supply variability.
Capital Improvement Plan
On February 11, 2025, the Commission adopted the 10-year capital plan for Fiscal Years 2025-26 through 2034-35 (the “2026-35 CIP”), totaling approximately $11.1 billion. Of such amount, approximately $2.71 billion has been allocated to Hetch Hetchy Water and Power, with approximately $625.8 million allocated to Hetch Hetchy Water (which is funded by the Water Enterprise) and $2.08 billion allocated to Hetch Hetchy Power (which is funded by the Power Enterprise).
The Hetch Hetchy Water and Power capital program is divided into power-infrastructure-related projects (allocable to the Power Enterprise), water-infrastructure-related projects (allocable to the Water Enterprise) and joint projects for facilities that are used for both water and power operations (allocable 55% to the Power Enterprise and 45% to the Water Enterprise). The capital plan for Fiscal Year 2025-26 was approved by the Commission as part of the budget for the Power Enterprise, with capital spending budgeted at $181.0 million. The capital plan budget for Fiscal Year 2026-27 will be presented for approval [____] in order for further budget development work to take place. [Update]
The 2026-35 CIP is projected to be funded primarily from a combination of Power Enterprise revenues (i.e. cash) and bonds and commercial paper. Specifically, the 2026-35 CIP projects that revenue funding will account for approximately $846.8 million of project funding for Hetch Hetchy Water and Power CIP projects, and total debt funding will account for approximately $1.81 billion of project funding for Hetch Hetchy Water and Power CIP projects. Of this, $1.38 billion is projected to come from Power Enterprise debt and $428.2 million from Water Enterprise debt. For Fiscal Year 2025-26, projects are expected to be primarily funded from $[28.75] million of Power Enterprise revenues, $[145.1] million of proceeds of future Power Enterprise bond or commercial paper sales and $[77.9] million of Water Enterprise bond and commercial paper proceeds.
Obligations Payable from Net Revenues
Senior Obligations. As of [January] 1, 2026, the Power Enterprise had $279,055,000] in outstanding aggregate principal amount of Power Revenue Bonds, comprised of the Commission’s: (i) Power Revenue Bonds, 2015 Series A (Green Bonds) (the “2015A Bonds”) outstanding in the aggregate principal amount of $32,025,000, Commented [HT4]: Feb 5, 2026 is anticipated approval
date.
Commented [NS5]: Hi @Hunter, Trey rey - We are
planning to go to the Commission 1/13/25 to seek approval of various interim funding facilities As part of that we need to update our CP Offering Memoradum. Grateful for your review of this brief section.
Commented [HT6R5]: This looks great. Thanks for giving
me the opportunity to review.
5 4926-7007-0137.1
(ii) Power Revenue Bonds, 2015 Series B (the “2015B Bonds”), outstanding in the aggregate principal amount of $1,095,000, (iii) Power Revenue Bonds, 2021 Series A (Green Bonds) (the “2021A Bonds”), outstanding in the aggregate principal amount of $72,895,000, (iv) Power Revenue Bonds, 2021 Series B (the “2021B Bonds,” and together with the 2021A Bonds, the “2021AB Bonds”), outstanding in the aggregate principal amount of $49,135,000, and (v) Power Revenue Bonds, 2023 Series A (the “2023A Bonds”), outstanding in the aggregate principal amount of $123,905,000]. The [2015A Bonds, the 2015B] Bonds, the 2021AB Bonds and the 2023A Bonds are collectively referred to herein as the “Outstanding Power Revenue Bonds”. The Outstanding Power Revenue Bonds have underlying ratings of “[AA-]” by Fitch Ratings, Inc. (“Fitch”) and “[AA]” by S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”).
There are currently [no] other obligations of the Commission payable from Net Revenues on a parity with the Outstanding Power Revenue Bonds.
The Commercial Paper Notes are secured by a pledge of Net Revenues subordinate to the pledge of Net Revenues securing the Outstanding Power Revenue Bonds and any future Power Revenue Bonds.
Obligations on Parity with the Commercial Paper Notes. As of [January] 1, 2026, the Power Enterprise had $[3,005,084] in outstanding aggregate principal amount of certain federal subsidy bonds (new clean renewable energy bonds and qualified energy conservation bonds) that were privately placed on a non-rated basis (the “Parity Notes”), and such Parity Notes and on parity with the Commercial Paper Notes.
In addition, the Commission has also entered into a Revolving Credit Agreement with Wells Fargo Bank, National Association (“Wells Fargo”), dated as of March 4, 2025 (the “Revolving Credit Agreement”), pursuant to which Wells Fargo has provided a three-year commitment to make loans to the Commission (i) in a principal amount not-to-exceed $100 million outstanding at any one time for the benefit of the Power Enterprise only, and (ii) in a principal amount not-to-exceed $100 million outstanding at any one time for the benefit of the Water Enterprise only.
Loans made under the Revolving Credit Agreement for the benefit of the Power Enterprise improvements and purposes are not obligations of the Water Enterprise and are payable from the Available Power Enterprise Revenues and not from revenues of the Water Enterprise. Loans made under the Revolving Credit Agreement for the benefit of Water Enterprise improvements and purposes are not obligations of the Power Enterprise and are payable from the revenues of the Water Enterprise and not from the Available Power Enterprise Revenues. The direct placement obligations relating to the Power Enterprise only (the “Parity Revolving Obligations”) issued under the Revolving Credit Agreement, are payable on parity with the Commercial Paper Notes. Under the Revolving Credit Agreement, as it relates to the Power Enterprise, upon a failure by the Commission to perform or observe its covenants, a default in other specified indebtedness of the Commission, or other specified events of default, as it relates to the Power Enterprise, Wells Fargo could terminate its commitment, as it relates to the Power Enterprise only, and declare all amounts then outstanding, as it relates to the Power Enterprise only, to be immediately due and payable. The direct placement obligations issued under the Revolving Credit Agreement are not offered pursuant to this Offering Memorandum. As of [January] 1, 2026, the Power Enterprise had [no] outstanding Parity Revolving Obligations.
The Commission may authorize additional indebtedness on parity with the Commercial Paper Notes without notice to, or the consent of, any holder of the Commercial Paper Notes.
Obligations Subordinate to the Commercial Paper Notes, Parity Notes and Parity Revolving Obligations. In 2010, the Commission constructed its administrative offices at 525 Golden Gate Avenue, one block north of City Hall, to house the administrative offices of the Commission’s three utility enterprises that are now located in various leased facilities. Total project costs were approximately $202 million, and were financed with land and property sale proceeds, fund balances, grants and the proceeds from the execution and delivery in 2009 of certificates of participation, representing interests in a City General Fund lease (currently outstanding in the aggregate principal amount of $120.21 million). Pursuant to a Memorandum of Understanding between the City and the Commission, the Commission reimburses the City General Fund for all debt service in connection with this City financing (net of Refundable Credits (as defined in the Power Bonds Indenture) received). The Commission allocates such payment obligations internally among its three utility enterprises based on percentage usage. The Power Enterprise is responsible for 9.72% of such obligations, payable from Net Revenues on a basis subordinate to the payment of the Commercial Paper Notes.
Commented [NS7]: Convention is to list Moody’s first
(NA here), S&P second, and then third
6 4926-7007-0137.1
The Commission may, with majority voter approval or, in certain instances with majority, two-thirds or three- quarters vote of the Board of Supervisors of the City (the “Board”) (depending on the nature of the Power Revenue Bonds), authorize additional Power Revenue Bonds, the payment of which will be prior to, on parity with, or subordinate to, the payment of the Commercial Paper Notes, without notice to, or consent of, any holder of the Commercial Paper Notes.
Memorandum of Understanding (Mountain Tunnel Improvement Project) During the fiscal year ended June 30, 2022, the Commission entered into a Drinking Water State Revolving Fund (SRF) Loan (the “DWSRF Loan”) with the California State Water Resources Control Board, which provides a low-interest-rate loan in the approximate amount of $238,000,000 for the Mountain Tunnel Improvement Project (the “MTIP”), a capital project of Hetch Hetchy Water & Power. A component of the MTIP, the Flow Control Facility, is a joint asset of the Water Enterprise and Power Enterprise. The Power Enterprise is responsible for repayment to the Water Enterprise of the DWSRF Loan debt service representing its allocable share of the cost of the “Flow Control Facility” component of the MTIP (the “Power Enterprise Portion”). Pursuant to a Memorandum of Understanding, dated as June 30, 2023, by and between the Water Enterprise and the Power Enterprise, the Power Enterprise Portion paid by the Water Enterprise under the DWSRF Loan is reimbursed to the Water Enterprise by the Power Enterprise and is not deemed to be a debt obligation of the Power Enterprise, and is instead treated as a component of Operation and Maintenance Expenses under the Power Bonds Indenture, in the approximate amount of $[2.7]6 million annually.
The Power Enterprise’s allocable share of the cost of the MTIP, approximately $ [65,329,193259,600], represents approximately [27.42]% of the total DWSRF Loan Amount. [Provide any updates re upcoming changes, if any] Power Purchase Agreements
In June 2009, the Power Enterprise entered into a 25-year power purchase agreement with SFCity 1, LP, to purchase electricity generated from a solar photovoltaic project located at Sunset Reservoir. The facility achieved commercial operation in November 2010. Duke Energy (“Duke Energy”) has assumed ownership of the power purchase agreement. In accordance with the terms and conditions thereof, commencing on the project’s commercial operation date, Duke Energy will sell and deliver, and the Power Enterprise shall purchase and accept, all of the output of the project.
Payments made by the Power Enterprise under its agreement with Duke Energy constitute Operation and Maintenance Expenses under the Power Bonds Indenture. In Fiscal Year 2023-24 and 2024-25, the Power Enterprise purchased approximately [6,006] megawatt-hours (“MWh”) of electricity for a total payment of $[2.04] million and approximately [6,269] MWh of electricity for a total payment of $[2.18] million, respectively. For Fiscal Year 2025- 26, the projected purchased electricity is approximately [6,164] MWh for a total payment of approximately $[2.22] million.
Investment Policy
The Commission’s funds are invested through the City’s office of the Treasurer pursuant to the City’s investment policy. The investment policy of the City is reviewed annually and is subject to change. A copy of the City’s Annual Statement of Investment Policy can be found at www.sftreasurer.org. Neither such website nor the information on such website is incorporated herein by reference.
Power Enterprise Financial Statements
The financial statements of the Power Enterprise for the Fiscal Year ended June 30, 2025, are attached to this Offering Memorandum as APPENDIX C. Additional financial and operating data relating to the Commission and the Power Enterprise may be found in the Commission’s most recent filings made pursuant to continuing disclosure undertakings of the Commission in connection with its Outstanding Power Revenue Bonds, which are filed with the Municipal Securities Rulemaking Board (“MSRB”) through the Electronic Municipal Market Access (“EMMA”) website. The Commission may provide supplemental information in its annual continuing disclosure report filings and may from time to time provide voluntary notices, in its sole discretion, to investors. See “ADDITIONAL INFORMATION.”
Commented [NS8]: @Kwak, Eric @Dunivan, Earl D -
able to confirm figures for Pardis?
Commented [EK9R8]: The numbers in the MOU were
slightly different so I revised in the OM and confirmed the other figures.
Commented [SN10R8]: Thank you Eric
7 4926-7007-0137.1
TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL
PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT. IF FOR ANY REASON THE APPLICABLE
BANK FAILS TO MAKE A PAYMENT DUE UNDER THE APPLICABLE LETTER OF CREDIT, THE
COMMISSION WOULD HAVE NO OBLIGATION TO MAKE ANY PAYMENTS WITH RESPECT TO
THE APPLICABLE COMMERCIAL PAPER NOTES EXCEPT FROM AVAILABLE POWER
ENTERPRISE REVENUES, AND IT IS UNLIKELY THAT THE COMMISSION WOULD HAVE
SUFFICIENT FUNDS ON HAND AND AVAILABLE TO MAKE THE CORRESPONDING PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON SUCH COMMERCIAL PAPER NOTES. PROSPECTIVE
INVESTORS SHOULD THEREFORE BASE THEIR INVESTMENT DECISION, INSOFAR AS IT
RELATES TO THE CREDITWORTHINESS OF A SERIES OF COMMERCIAL PAPER NOTES, SOLELY ON THE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.
THE COMMERCIAL PAPER NOTES
The Commercial Paper Notes are authorized to be issued pursuant to (i) Article V of Chapter 43 of the San Francisco Administrative Code, enacted by Ordinance No. 203-98, adopted by the Board on June 8, 1998, and signed by the Mayor on June 19, 1998, as amended by Ordinance 270-06 adopted by the Board on October 24, 2006, and signed by the Mayor on October 31, 2006 (the “Procedural Ordinance”), to establish a procedure pursuant to which the Commission may issue short-term indebtedness, including the issuance of commercial paper in anticipation of the issuance of its revenue bonds; (ii) Section 9.107(6) and 9.107(8) of the Charter; (iii) Section 8B.124 of the Charter, subject to receipt of the Proposition A Certifications (as defined herein); (iv) various ordinances adopted by the Board authorizing the issuance of Power Revenue Bonds (including commercial paper notes in anticipation thereof), Ordinance No. 269-24 (“Ordinance No. 269-24,” and together with the Procedural Ordinance, the “Ordinances”), adopted by the Board on November 19, 2024 and signed by the Mayor on November 25, 2024, and (v) various resolutions adopted by the Commission, including, Resolution No. 24-0193, adopted by the Commission on September 10, 2024 (collectively, the “Resolutions”), providing for and approving of the issuance by the Commission of not to exceed $450,000,000 aggregate principal amount of short-term indebtedness (including, but not limited to, the issuance of the Commercial Paper Notes).
Pursuant to such authorizations, in addition to the Commercial Paper Notes offered hereunder, the Commission has also entered into the Revolving Credit Agreement with Wells Fargo, pursuant to which the bank has agreed to loan, from time to time, up to $100,000,000 principal amount of direct placement obligations which are on parity with the Commercial Paper Notes. See “THE COMMISSION AND THE POWER ENTERPRISE— Obligations Payable from Net Revenues—Obligations on Parity with the Commercial Paper Notes” above for additional information. Such direct placement obligations issued under the Revolving Credit Agreement are not offered pursuant to this Offering Memorandum.
Issuance of debt under Section 8B.124 of the Charter is subject to (i) receipt of certification from an independent engineer that (x) the projects to be financed by such debt meet utility standards and (y) estimated net revenue will be sufficient to meet operating, maintenance, debt service coverage and other indenture or resolution requirements; and (ii) receipt of certification from the San Francisco Planning Department that facilities financed with such debt will comply with applicable requirements of the California Environmental Quality Act (collectively, the “Proposition A Certifications”).
The Commercial Paper Notes are issued pursuant to the terms of the Issuing and Paying Agent Agreement.
The Commercial Paper Notes will be issued from time to time to finance projects associated with the Commission’s Power Enterprise. The Commission may issue, and have outstanding at any one time, an aggregate principal amount of Series A-1 Notes up to $125,000,000, an aggregate principal amount of Series A-2 Notes up to $125,000,000 and an aggregate principal amount of Series A-3 Notes up to $100,000,000.
The Commercial Paper Notes are dated the date of their original issuance, issued in book-entry form only in denominations of $100,000, and in integral multiples of $1,000 in excess of $100,000, and bear interest at separately stated interest rates not to exceed 12% per annum.
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The Commercial Paper Notes are fully registered notes registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. Beneficial ownership interests in the Commercial Paper Notes are available in book-entry form only, and purchasers of the Commercial Paper Notes will not receive certificates representing their interests in the Commercial Paper Notes purchased. While held in book-entry form, all payments of principal of and interest on the Commercial Paper Notes will be made by wire transfer to DTC or its nominee as the sole registered owner of the Commercial Paper Notes. Payments to the beneficial owners are the responsibility of DTC and its participants. See “APPENDIX A—BOOK-ENTRY SYSTEM FOR COMMERCIAL PAPER NOTES.”
Each Commercial Paper Note will bear interest payable at maturity at an annual rate calculated, in the case of the Series A-1 Notes, the Series A-2 Notes and the Subseries A-3 Notes, on the basis of actual days elapsed and a year of 365 or 366 days, as applicable, and, in the case of the Subseries A-3-T Notes, on the basis of actual days elapsed and a year of 360 days.
Each Commercial Paper Note will mature on a Business Day not more than 270 days after its issuance date, but in no event later than the Business Day immediately preceding the Termination Date (as defined herein) of the applicable Letter of Credit.
Each Commercial Paper Note (i) will be sold at a price of not less than 100% of the principal amount thereof, and (ii) will mature on a Business Day. The Commercial Paper Notes will not be subject to redemption prior to maturity. Payments of principal of and interest on maturing Commercial Paper Notes will be made by the Issuing and Paying Agent directly to DTC.
Notwithstanding anything to the contrary in the Issuing and Paying Agent Agreement and the Commercial Paper Notes, upon an Event of Default (as such term is defined in the Issuing and Paying Agent Agreement), (i) if the applicable Bank is insolvent or has failed to honor a properly presented and conforming Drawing (as such term is defined in the Issuing and Paying Agent Agreement) under the applicable Letter of Credit, any holder of the applicable Series of Commercial Paper Notes at the time outstanding may, by notice to the Commission, declare the principal of such holder’s Commercial Paper Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable; and (ii)(A) so long as the applicable Bank is not insolvent and has not failed to honor a properly presented and conforming Drawing under the applicable Letter of Credit, such Bank, on behalf of the holders of the applicable Series of Commercial Paper Notes at the time outstanding, by notice to the Commission, may declare the principal of all outstanding Commercial Paper Notes of such Series, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable, and the Issuing and Paying Agent shall, to the extent the applicable Letter of Credit so provides, immediately make thereafter a Drawing under such Letter of Credit to pay the amount of interest and principal then due on the applicable Series of Commercial Paper Notes and (B) such Bank may, by notice to the Commission, declare the principal of the applicable Bank Notes (as such term is defined in the Issuing and Paying Agent Agreement), and the interest accrued thereon (and the Unpaid Drawings and Advances evidenced thereby), to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable, anything in Issuing and Paying Agent Agreement or in the applicable Series of Commercial Paper Notes or in the applicable Reimbursement Agreement contained to the contrary notwithstanding, provided however , this clause (ii) shall be of no effect if said Event of Default was caused by a failure of such Bank to honor a properly presented and conforming Drawing made on the applicable Letter of Credit in conformance with the terms of the Issuing and Paying Agent Agreement. See “SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT – Series A-1 Reimbursement Agreemen t Remedies,” “SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT – Series A-2 Reimbursement Agreement Remedies” and “SERIES A-3 LETTER OF CREDIT AND SERIES A-3 REIMBURSEM ENT AGREEMENT – Series A-3 Reimbursement Agreement Remedies”.
As of the date of this Offering Memorandum, the Commission had issued $ 94,582,000 [92,434,000] of the Series A-1 Notes, $[45,450,000] 46,399,000 of the Series A-2 Notes and $30,397,000[0] of the Series A-3 Notes. Commented [NS11]: @Kwak, Eric Commented [EK12R11]: Updated as of 11/24/25
Commented [SN13R11]: thank you @Kwak, Eric
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Limited Obligation
TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING COMMERCIAL
PAPER NOTES OF EACH SERIES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE APPLICABLE LETTER OF CREDIT. PROSPECTIVE INVESTORS SHOULD
THEREFORE BASE THEIR INVESTMENT DECISION, INSOFAR AS IT RELATES TO THE
CREDITWORTHINESS OF A SERIES OF COMMERCIAL PAPER NOTES, SOLELY ON THE CREDIT OF THE APPLICABLE BANK, RATHER THAN THE COMMISSION.
THE GENERAL FUND OF THE CITY AND COUNTY OF SAN FRANCISCO IS NOT LIABLE, AND
NEITHER THE CREDIT NOR THE TAXING POWER OF THE CITY AND COUNTY OF SAN FRANCISCO IS PLEDGED, FOR THE PAYMENT OF THE COMMERCIAL PAPER NOTES.
For the avoidance of doubt: (i) the Series A-1 Letter of Credit issued by the Series A-1 Bank will only support the payment of the principal amount due and payable at the stated maturity of the Series A-1 Notes and interest accrued or to accrue thereon through the maturity dates thereof; (ii) the Series A-2 Letter of Credit issued by the Series A-2 Bank will only support the payment of the principal amount due and payable at the stated maturity of the Series A-2 Notes and interest accrued or to accrue thereon through the maturity dates thereof; and (iii) the Series A-3 Letter of Credit issued by the Series A-3 Bank will only support the payment of the principal amount due and payable at the stated maturity of the Series A-3 Notes and interest accrued or to accrue thereon through the maturity dates thereof.
Pledge of Available Power Enterprise Revenues and Certain Funds and Accounts The Commercial Paper Notes and the Bank Notes and the obligations of the Commission under the Series A-1 Reimbursement Agreement, the Series A-2 Reimbursement Agreement and the Series A-3 Reimbursement Agreement are revenue obligations, are not secured by the taxing power of the Commission or the City and shall be payable as to both principal and interest from, and shall be secured solely by a pledge as hereinafter provided of, the Available Power Enterprise Revenues, and, as set forth below, certain funds and accounts created under the Issuing and Paying Agent Agreement. Capitalized terms used below and not otherwise defined shall have the meanings set forth in the Issuing and Paying Agent Agreement.
The Available Power Enterprise Revenues (on a parity with the pledge securing any Parity Notes and Parity Revolving Obligations) and the Construction Fund and the accounts therein for each series or subseries, as applicable, are pledged to the payment of the applicable Commercial Paper Notes, the applicable Bank Notes and all obligations of the Commission relating to such Commercial Paper Notes under the Issuing and Paying Agent Agreement and under the Series A-1 Reimbursement Agreement, the Series A-2 Reimbursement Agreement and the Series A-3 Reimbursement Agreement without priority or distinction of one over the other, except as expressly provided under the Issuing and Paying Agent Agreement. In addition, (i) the Series A-1 Debt Service Account is pledged to secure the payment of the interest on and principal of the Series A-1 Notes, (ii) the Series A-1 Bank Payment Account and the Series A-1 Bank Note Debt Service Account are pledged to secure the payment of the interest on and principal of the Series A-1 Bank Notes and obligations under the Series A-1 Reimbursement Agreement, (iii) the Series A-2 Debt Service Account is pledged to secure the payment of the interest on and principal of the Series A-2 Notes, (iv) the Series A-2 Bank Payment Account and the Series A-2 Bank Note Debt Service Account are pledged to secure the payment of the interest on and principal of the Series A-2 Bank Notes and obligations under the Series A-2 Reimbursement Agreement, (v) the Series A-3 Debt Service Account is pledged to secure the payment of the interest on and principal of the Series A-3 Notes, (vi) the Subseries A-3 Bank Payment Account and the Subseries A-3 Bank Note Debt Service Account are pledged to secure the payment of the interest on and principal of the Subseries A-3 Bank Notes and related obligations under the Series A-3 Reimbursement Agreement, and (vii) the Subseries A-3-T Bank Payment Account and the Subseries A-3-T Bank Note Debt Service Account are pledged to secure the payment of the interest on and principal of the Subseries A-3 Bank Notes and related obligations under the Series A-3 Reimbursement Agreement.
The Available Power Enterprise Revenues and the funds and accounts pledged under the Issuing and Paying Agent Agreement constitute a trust fund for the security and payment of the interest on and principal of the Commercial Paper Notes and the Bank Notes, as applicable, and all obligations of the Commission relating to such Commercial Paper Notes under the Issuing and Paying Agent Agreement and under the Series A-1 Reimbursement
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Agreement, the Series A-2 Reimbursement Agreement and the Series A-3 Reimbursement Agreement, as provided under the Issuing and Paying Agent Agreement, and shall be irrevocable until all of the applicable Commercial Paper Notes and the Bank Notes secured by Available Power Enterprise Revenues have been paid and retired and any related obligations of the Commission under the Series A-1 Reimbursement Agreement, the Series A-2 Reimbursement Agreement and the Series A-3 Reimbursement Agreement have been satisfied. “Available Power Enterprise Revenues” means all of the moneys in the Revenue Fund (as defined in the Power Bonds Indenture and comprised primarily of Power Enterprise Revenues and earnings thereon) remaining after the payments required by Subsections 5.5(c)-(e) of the Power Bonds Indenture, and all other amounts payable on parity with amounts paid under Subsection 5.5(f) of the Power Bonds Indenture pursuant to the terms thereof. “Net Revenues” or “Power Enterprise Revenues” has the meaning ascribed to the term “Net Revenues” in the Power Bonds Indenture, which is defined as, for any Fiscal Year (or other designated twelve-month period), Revenues in such Fiscal Year (or other designated twelve-month period), less (a) Operation and Maintenance Expenses (as defined in the Power Bonds Indenture), and (b) any Priority R&R Fund Deposit (as defined in the Power Bonds Indenture) for such Fiscal Year (or other designated twelve-month period). “Revenues” means all revenues, rates and charges received and accrued by the Commission for electric power and energy and other services, facilities and commodities sold, furnished or supplied by the Power Enterprise, together with income, earnings and profits therefrom (including interest earnings on the proceeds of any Bonds pending application thereof), as determined in accordance with GAAP. “Revenues” includes payments to the Power Enterprise on or with respect to loans from any Separate System maintained by the Commission. “Revenues” do not include (a) proceeds from the issuance of any obligations for borrowed money, (b) amounts loaned to the Power Enterprise, (c) Swap Agreement Receipts, (d) proceeds from taxes, (e) customer deposits while retained as such, (f) contributions in aid of construction, (g) gifts, (h) grants, (i) insurance or condemnation proceeds that are properly allocable to a capital account, (j) non-cash revenues or gains that may be required or permitted under GAAP, including mark-to- market gains and deferred revenues, (k) money received by the Commission as the proceeds of the sale of any portion of the properties of the Power Enterprise, (l) amounts by their terms not available for the payment of Operation and Maintenance Expenses or Principal and interest on the Bonds, (m) Refundable Credits; (n) revenues of any Separate System, (o) Water Enterprise revenues as defined in the document or agreement governing the then-outstanding senior lien obligations of the Water Enterprise for borrowed money, and (p) Wastewater Enterprise revenues as defined in the document or agreement governing the then-outstanding senior lien obligations of the Wastewater Enterprise for borrowed money.
Under the Issuing and Paying Agent Agreement, the Commission has covenanted to establish, maintain and collect rates and charges with respect to the Power Enterprise sufficient (after giving effect to the expected receipt of refinancing proceeds from the sale of Commercial Paper Notes or Power Revenue Bonds) to pay the Commercial Paper Notes, the Parity Notes (as defined in the Issuing and Paying Agent Agreement), the Bank Notes (as defined herein), all other amounts due and owing under the Series A-1 Reimbursement Agreement, the Series A-2 Reimbursement Agreement, the Series A-3 Reimbursement Agreement and all other obligations payable from the Power Enterprise.
The Commission has also covenanted not to issue any additional Parity Notes (as defined in the Issuing and Paying Agent Agreement), bonds, notes or other obligations for borrowed money payable from revenues of the Power Enterprise unless the Commission certifies that: (i) actual revenues of the Power Enterprise for the most recently completed fiscal year, or (ii) projected revenues for the next three fiscal years following the issuance of such Parity Notes, additional bonds, notes, additional Series of Commercial Paper Notes, or other indebtedness are or will be sufficient to satisfy the rate covenant described above, assuming the issuance of such Parity Notes (as defined in the Issuing and Paying Agent Agreement), bonds, notes, additional Series of Commercial Paper Notes, or other indebtedness and repayment, if any, from the proceeds thereof of maturing Commercial Paper Notes, the Bank Notes and all other amounts due and owing under the Series A-1 Reimbursement Agreement, the Series A-2 Reimbursement Agreement and the Series A-3 Reimbursement Agreement pursuant to the terms of such financing.
The Commercial Paper Notes are also payable from the proceeds of refunding Commercial Paper Notes or refunding bonds or other obligations which may be authorized and issued from time to time for such purpose.
Notwithstanding the foregoing, as set forth in the Issuing and Paying Agent Agreement, (i) proceeds of the Series A-
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1 Notes may be used to refinance Series A-2 Notes or Subseries A-3 Notes (Tax-Exempt), (ii) proceeds of the Series A-2 Notes may be used to refinance Series A-1 Notes or Subseries A-3 Notes (Tax-Exempt), (iii) proceeds of the Subseries A-3 Notes (Tax-Exempt) may be used to refinance Series A-1 Notes or Series A-2 Notes, and (iv) proceeds of the Subseries A-3-T Notes (Taxable) may be used to refinance the Series A-1 Notes, Series A-2 Notes or Subseries A-3 Notes. Notwithstanding the foregoing or anything to the contrary in the Issuing and Paying Agent Agreement, proceeds of the Series A-1 Notes, the Series A-2 Notes and the Subseries A-3 Notes may not be used to finance or refinance any portion of the Cost of Taxable Power Enterprise Projects (as such term is defined in the Issuing and Paying Agent Agreement) and administrative costs funded with proceeds of the Subseries A-3-T Notes, unless the Commission receives an opinion of bond counsel that such use of proceeds will not adversely affect the exclusion from gross income for federal tax purposes of interest on the Series A-1 Notes, the Series A-2 Notes and the Subseries A-3 Notes.
SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT Payments of principal and interest on the Series A-1 Notes will be made from drawings under the Series A-1 Letter of Credit. The following description is a summary of certain provisions of the Series A-1 Letter of Credit and the Series A-1 Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the Series A-1 Letter of Credit or the Series A-1 Reimbursement Agreement.
Investors should obtain and review copies of the Series A-1 Letter of Credit and the Series A-1 Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized terms appearing under this heading “SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT” shall have the meanings assigned to them in the Series A-1 Reimbursement Agreement.
TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING SERIES A-1
NOTES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE SERIES A-1 LETTER OF CREDIT.
Series A-1 Letter of Credit
The Series A-1 Letter of Credit is an irrevocable transferable obligation of the Series A-1 Bank and supports the payment of principal of and interest on maturing Series A-1 Notes only. The Series A-1 Letter of Credit may not be drawn on for any other purpose. The Series A-1 Letter of Credit was issued in an amount equal to the maximum principal amount of $125,000,000 of the Series A-1 Notes plus 270 days’ interest thereon at the rate of 12% per annum calculated on the basis of a year of 365 days (the “Stated Amount”). The Issuing and Paying Agent is authorized to draw on the Series A-1 Letter of Credit in an aggregate amount not to exceed the Stated Amount of the Series A-1 Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the Series A-1 Letter of Credit, in one or more Drawings (as defined in the Series A-1 Letter of Credit), payable as set forth in the Series A-1 Letter of Credit on any Business Day (as defined in the Series A-1 Letter of Credit), by presentation of the appropriate certifications, (i) for the payment at maturity of the principal of and interest on Series A-1 Notes or (ii) for the payment at maturity of the principal of and interest to maturity on Series A-1 Notes that otherwise mature on or after the date that the Issuing and Paying Agent receives a Final Drawing Notice (as defined in the Series A-1 Letter of Credit) from the Series A-1 Bank.
Upon the Series A-1 Bank honoring any Drawing, the Stated Amount and the amount available to be drawn under the Series A-1 Letter of Credit by the Issuing and Paying Agent pursuant to any subsequent Drawing shall be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount shall be increased when and to the extent, but only when and to the extent (i) (A) of transfer by the Issuing and Paying Agent to the Series A-1 Bank on the date such Drawing is honored of proceeds of Series A-1 Notes issued on such date or (B) the Issuing and Paying Agent receives written notice from the Series A-1 Bank that the Series A-1 Bank has been reimbursed by or on behalf of the Commission for any amount drawn under the Series A-1 Letter of Credit by any Drawing, and (ii) that the Issuing and Paying Agent has not received a No-Issuance Notice (as defined in the Series A-1 Letter of Credit) from the Series A-1 Bank.
The Series A-1 Letter of Credit shall expire at the close of business of the Series A-1 Bank, on the date (the earliest of such date to occur referred to as the “Termination Date”) which is the earliest of (i) [ ∙] [∙], 202[∙] (unless extended pursuant to the terms of the Series A-1 Letter of Credit), (ii) the later of the date on which the Series A-1
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Bank receives written notice from the Issuing and Paying Agent that an Alternate Facility (as defined in the Issuing and Paying Agent Agreement) has been substituted for the Series A-1 Letter of Credit in accordance with the Issuing and Paying Agent Agreement and the effective date of any such Alternate Facility (after the Series A-1 Bank honors any properly presented and conforming Drawing on such date), (iii) the date on which the Series A-1 Bank receives written notice from the Issuing and Paying Agent that there are no longer any Series A-1 Notes Outstanding within the meaning of the Issuing and Paying Agent Agreement and that the Issuing and Paying Agent elects to terminate the Series A-1 Letter of Credit, (iv) the earlier of (a) the fifteenth (15th) calendar day after the date on which the Issuing and Paying Agent receives the Final Drawing Notice and (b) the date on which the drawing resulting from the delivery of the Final Drawing Notice is honored, and (v) the earlier of (a) the third (3rd) Business Day (as defined in the Series A-1 Letter of Credit) after the date on which the Commission receives an Acceleration Notice (as defined herein), and (b) the date on which the Drawing resulting from the delivery of the Acceleration Notice is honored under the Series A-1 Letter of Credit.
Pursuant to the Issuing and Paying Agent Agreement, no Series A-1 Notes may be outstanding at the time of any substitution of an Alternate Facility for the Series A-1 Letter of Credit.
Series A-1 Reimbursement Agreement Events of Default
If any of the following events occurs, each such event will be an “Event of Default” under the Series A-1 Reimbursement Agreement:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation (as defined in the Series A-1 Reimbursement Agreement), or (ii) any Obligation (as defined in the Series A-1 Reimbursement Agreement) (other than a Reimbursement Obligation) under the Series A-1 Reimbursement Agreement or under the Fee Agreement (as defined in the Series A-1 Reimbursement Agreement) and, in such case, such failure continues for five (5) Business Days (as defined in the Series A-1 Reimbursement Agreement);
(b) any representation or warranty made by or on behalf of the Commission in the Series A-1 Reimbursement Agreement or in any other Basic Document (as defined in the Series A-1 Reimbursement Agreement) or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered; (c) the Commission defaults in the due performance or observance of certain covenants set forth in the Series A-1 Reimbursement Agreement;
(d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the Series A-1 Reimbursement Agreement or any other Basic Document and such default remains unremedied for a period of thirty (30) days after the occurrence thereof; (e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its debts generally as they become due, (iii) makes an assignment for the benefit of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property (as defined in the Series A-1 Reimbursement Agreement), (v) institutes any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) takes any corporate action in furtherance of any matter described in clauses (i) through (v) above, or (vii) fails to contest in good faith any appointment or proceeding described in paragraph (f) under the “SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT—Series A-1 Reimbursement Agreement Events of Default”;
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(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City or any substantial part of its Property, or a proceeding described in clause (v) of paragraph (e) under the “SERIES A-1 LETTER OF CREDIT AND SERIES A-1 REIMBURSEMENT AGREEMENT —Series A-1 Reimbursement Agreement Events of Default,” above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged, undismissed and unstayed for a period of thirty (30) days; (g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (as defined in the Series A-1 Reimbursement Agreement) of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction;
(h) any material provision of the Series A-1 Reimbursement Agreement, the Charter or any other Basic Document at any time for any reason ceases to be valid and binding on the Commission as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction or shall be declared in a final non appealable judgment by any court with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission, or the Commission publicly contests the validity or enforceability of any obligation to pay Power Enterprise Debt (as defined in the Series A-1 Reimbursement Agreement), including, without limitation, the Power Bonds Indenture, or any Authorized Representative publicly repudiates or otherwise denies in writing that it has any further liability or obligation under or with respect to any provision of the Series A-1 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Power Enterprise Debt, including, without limitation, the Power Bonds Indenture; (i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Power Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Power Enterprise Debt was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Power Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Power Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Power Enterprise Debt; (k) the Commission (i) defaults on the payment of the principal of or interest on any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Power Enterprise Debt) was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Power Enterprise Debt); (l) any final, nonappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 are entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded and unstayed for a period of sixty (60) days;
(m) (i) the Commission shall default in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any other Basic Document (as defined respectively therein) has occurred;
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(n) a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service is rendered to the effect that interest on the Series A-1 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A-1 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Fitch or S&P (i) downgrades its long-term rating of any Senior Debt (as defined in the Series A-1 Reimbursement Agreement) of the Commission to below “BBB+” (or its equivalent), or “BBB+” (or its equivalent), respectively, or (ii) suspends or withdraws its rating of the same; or (p) the passage of any Law (as defined in the Series A-1 Reimbursement Agreement) has occurred which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under the Series A-1 Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the Series A-1 Reimbursement Agreement or any of the other Basic Documents.
Series A-1 Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the Series A-1 Reimbursement Agreement, the Series A-1 Bank may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the Series A-1 Reimbursement Agreement or by law provided:
(a) declare all Obligations to be immediately due and payable, whereupon the same are immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “LETTERS OF CREDIT AND REIMBURSEMENT AGREEMENTS— Series A-1 Reimbursement Agreement Events of Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by the Series A-1 Bank in writing); or (b) issue a No Issuance Notice (the effect of which will be as provided in the Series A-1 Reimbursement Agreement), reduce the Stated Amount of the Series A-1 Letter of Credit to the amount of the then outstanding Series A-1 Notes supported by the Series A-1 Letter of Credit plus a corresponding amount of interest coverage and/or terminate the Stated Amount as the then outstanding Series A-1 Notes are paid; or
(c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the Series A-1 Letter of Credit to occur on the fifteenth (15) calendar day after the date of receipt thereof by the Issuing and Paying Agent); or
(d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.
Upon the occurrence of an “event of default” under the Issuing and Paying Agent Agreement, the Series A-1 Bank may by notice to the Commission and the Issuing and Paying Agent (such notice, the “Acceleration Notice”), declare the principal of all outstanding Series A-1 Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable and instruct the Issuing and Paying Agent to submit a Drawing under the Series A-1 Letter of Credit to pay such immediately due and payable amount.
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SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT Payments of principal and interest on the Series A-2 Notes will be made from drawings under the Series A-2 Letter of Credit. The following description is a summary of certain provisions of the Series A-2 Letter of Credit and the Series A-2 Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the Series A-2 Letter of Credit or the Series A-2 Reimbursement Agreement.
Investors should obtain and review copies of the Series A-2 Letter of Credit and the Series A-2 Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized terms appearing under this heading “SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT” shall have the meanings assigned to them in the Series A-2 Reimbursement Agreement.
TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING SERIES A-2
NOTES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE SERIES A-2 LETTER OF CREDIT.
Series A-2 Letter of Credit
The Series A-2 Letter of Credit is an irrevocable transferable obligation of the Series A-2 Bank and supports the payment of principal of and interest on maturing Series A-2 Notes only. The Series A-2 Letter of Credit may not be drawn on for any other purpose. The Series A-2 Letter of Credit was issued in an amount equal to the maximum principal amount of $125,000,000 of the Series A-2 Notes plus 270 days’ interest thereon at the rate of 12% per annum computed on the basis of a 365-day year (the “Stated Amount”). The Issuing and Paying Agent is authorized to draw on the Series A-2 Letter of Credit in an aggregate amount not to exceed the Stated Amount of the Series A-2 Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the Series A-2 Letter of Credit, in one or more Drawings (as defined in the Series A-2 Letter of Credit), payable as set forth in the Series A-2 Letter of Credit on any Business Day (as defined in the Series A-2 Letter of Credit), by presentation of the appropriate certifications, (i) for the payment at maturity of the principal of and interest on Series A-2 Notes or (ii) for the payment at maturity of the principal of and interest to maturity on Series A-2 Notes that otherwise mature on or after the date that the Issuing and Paying Agent receives a Final Drawing Notice (as defined in the Series A-2 Letter of Credit) from the Series A-2 Bank.
Upon the Series A-2 Bank honoring any Drawing, the Stated Amount and the amount available to be drawn under the Series A-2 Letter of Credit by the Issuing and Paying Agent pursuant to any subsequent Drawing shall be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount shall be increased when and to the extent, but only when and to the extent (i) (A) of transfer by the Issuing and Paying Agent to the Series A-2 Bank on the date such Drawing is honored of proceeds of Series A-2 Notes issued on such date or (B) the Issuing and Paying Agent receives written notice from the Series A-2 Bank that the Series A-2 Bank has been reimbursed by or on behalf of the Commission for any amount drawn under the Series A-2 Letter of Credit by any Drawing, and (ii) that the Issuing and Paying Agent has not received a No-Issuance Notice (as defined in the Series A-2 Letter of Credit) from the Series A-2 Bank.
The Series A-2 Letter of Credit shall expire at the close of business of the Series A-2 Bank, on the date (the earliest of such date to occur referred to as the “Termination Date”) which is the earliest of (i) [ ∙] [∙], 202[∙] (unless extended pursuant to the terms of the Series A-2 Letter of Credit), (ii) the later of the date on which the Series A-2 Bank receives written notice from the Issuing and Paying Agent that an Alternate Facility (as defined in the Issuing and Paying Agent Agreement) has been substituted for the Series A-2 Letter of Credit in accordance with the Issuing and Paying Agent Agreement and the effective date of any such Alternate Facility (after the Series A-2 Bank honors any properly presented and conforming Drawing on such date), (iii) the date on which the Series A-2 Bank receives written notice from the Issuing and Paying Agent that there are no longer any Series A-2 Notes Outstanding within the meaning of the Issuing and Paying Agent Agreement and that the Issuing and Paying Agent elects to terminate the Series A-2 Letter of Credit, (iv) the earlier of (a) the fifteenth (15th) calendar day after the date on which the Issuing and Paying Agent receives the Final Drawing Notice and (b) the date on which the drawing resulting from the delivery of the Final Drawing Notice is honored, and (v) the earlier of (a) the third (3rd) Business Day (as defined in the Series A-2 Letter of Credit) after the date on which the Commission receives an Acceleration Notice (as defined herein), and (b) the date on which the Drawing resulting from the delivery of the Acceleration Notice is honored under the Series A-2 Letter of Credit.
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Pursuant to the Issuing and Paying Agent Agreement, no Series A-2 Notes may be outstanding at the time of any substitution of an Alternate Facility for the Series A-2 Letter of Credit.
Series A-2 Reimbursement Agreement Events of Default
If any of the following events occurs, each such event will be an “Event of Default” under the Series A-2 Reimbursement Agreement:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation (as defined in the Series A-2 Reimbursement Agreement), or (ii) any Obligation (as defined in the Series A-2 Reimbursement Agreement) (other than a Reimbursement Obligation) under the Series A-2 Reimbursement Agreement or under the Fee Agreement (as defined in the Series A-2 Reimbursement Agreement) and, in such case, such failure continues for five (5) Business Days (as defined in the Series A- 2 Reimbursement Agreement);
(b) any representation or warranty made by or on behalf of the Commission in the Series A-2 Reimbursement Agreement or in any other Basic Document (as defined in the Series A-2 Reimbursement Agreement) or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered; (c) the Commission defaults in the due performance or observance of certain covenants set forth in the Series A-2 Reimbursement Agreement;
(d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the Series A-2 Reimbursement Agreement or any other Basic Document and such default remains unremedied for a period of thirty (30) days after the occurrence thereof; (e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its debts generally as they become due, (iii) makes an assignment for the benefit of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property (as defined in the Series A-2 Reimbursement Agreement), (v) institutes any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) takes any corporate action in furtherance of any matter described in clauses (i) through (v) above, or (vii) fails to contest in good faith any appointment or proceeding described in paragraph (f) under the “SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT—Series A-2 Reimbursement Agreement Events of Default”;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in clause (v) of paragraph (e) under the “SERIES A-2 LETTER OF CREDIT AND SERIES A-2 REIMBURSEMENT AGREEMENT —Series A-2 Reimbursement Agreement Events of Default,” above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged, undismissed and unstayed for a period of thirty (30) days; (g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (as defined in the Series A-2 Reimbursement Agreement) of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction;
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(h) any material provision of the Series A-2 Reimbursement Agreement, the Charter or any other Basic Document at any time for any reason ceases to be valid and binding on the Commission as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction or shall be declared in a final non appealable judgment by any court with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission, or the Commission publicly contests the validity or enforceability of any obligation to pay Power Enterprise Debt (as defined in the Series A-2 Reimbursement Agreement), including, without limitation, the Power Bonds Indenture, or any Authorized Representative publicly repudiates or otherwise denies in writing that it has any further liability or obligation under or with respect to any provision of the Series A-2 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Power Enterprise Debt, including, without limitation, the Power Bonds Indenture; (i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Power Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Power Enterprise Debt was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Power Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Power Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Power Enterprise Debt; (k) the Commission (i) defaults on the payment of the principal of or interest on any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Power Enterprise Debt) was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Power Enterprise Debt); (l) any final, nonappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 are entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded and unstayed for a period of sixty (60) days;
(m) (i) the Commission shall default in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any other Basic Document (as defined respectively therein) has occurred;
(n) a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service is rendered to the effect that interest on the Series A-2 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A-2 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Fitch or S&P (i) downgrades its long-term rating of any Senior Debt (as defined in the Series A-2 Reimbursement Agreement) of the Commission to below “BBB+” (or its equivalent), or “BBB+” (or its equivalent), respectively, or (ii) suspends or withdraws its rating of the same; or
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(p) the passage of any Law (as defined in the Series A-2 Reimbursement Agreement) has occurred which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under the Series A-2 Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the Series A-2 Reimbursement Agreement or any of the other Basic Documents.
Series A-2 Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the Series A-2 Reimbursement Agreement, the Series A- 2 Bank may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the Series A-2 Reimbursement Agreement or by law provided:
(a) declare all Obligations to be immediately due and payable, whereupon the same are immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “LETTERS OF CREDIT AND REIMBURSEMENT AGREEMENTS— Series A-2 Reimbursement Agreement Events of Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by the Series A-2 Bank in writing); or (b) issue a No Issuance Notice (the effect of which will be as provided in the Series A-2 Reimbursement Agreement), reduce the Stated Amount of the Series A-2 Letter of Credit to the amount of the then outstanding Series A-2 Notes supported by the Series A-2 Letter of Credit plus a corresponding amount of interest coverage and/or terminate the Stated Amount as the then outstanding Series A-2 Notes are paid; or
(c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the Series A-2 Letter of Credit to occur on the fifteenth (15) calendar day after the date of receipt thereof by the Issuing and Paying Agent); or
(d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.
Upon the occurrence of an “event of default” under the Issuing and Paying Agent Agreement, the Series A- 2 Bank may by notice to the Commission and the Issuing and Paying Agent (such notice, the “Acceleration Notice”), declare the principal of all outstanding Series A-2 Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable and instruct the Issuing and Paying Agent to submit a Drawing under the Series A-2 Letter of Credit to pay such immediately due and payable amount.
SERIES A-3 LETTER OF CREDIT AND SERIES A-3 REIMBURSEMENT AGREEMENT The following description is a summary of certain provisions of the Series A-3 Letter of Credit and the Series A-3 Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the Series A-3 Letter of Credit or the Series A-3 Reimbursement Agreement. Investors should obtain and review copies of the Series A-3 Letter of Credit and the Series A-3 Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized terms appearing under this heading shall have the meanings assigned to them in the Series A-3 Reimbursement Agreement or the Series A-3 Letter of Credit.
Payments of principal and interest on the Series A-3 Notes will be made from drawings under the Series A-3 Letter of Credit. The following description is a summary of certain provisions of the Series A-3 Letter of Credit and the Series A-3 Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the Series A-3 Letter of Credit or the Series A-3 Reimbursement Agreement.
Investors should obtain and review copies of the Series A-3 Letter of Credit and the Series A-3 Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized terms appearing under this
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heading “SERIES A-3 LETTER OF CREDIT AND SERIES A-3 REIMBURSEMENT AGREEMENT” shall have the meanings assigned to them in the Series A-3 Reimbursement Agreement.
TIMELY PAYMENT OF PRINCIPAL OF AND/OR INTEREST ON MATURING SERIES A-3
NOTES IS DEPENDENT UPON THE AVAILABILITY OF PROCEEDS OF DRAWS UNDER THE SERIES A-3 LETTER OF CREDIT.
Series A-3 Letter of Credit
The Series A-3 Letter of Credit is an irrevocable transferable obligation of the Series A-3 Bank and supports the payment of principal of and interest on maturing Series A-3 Notes only. The Series A-3 Letter of Credit may not be drawn on for any other purpose or for any other series of Commercial Paper Notes. The Series A-3 Letter of Credit was issued in an amount equal to the maximum principal amount of $100,000,000 of the Series A-3 Notes plus 270 days’ interest thereon at the rate of 12% per annum computed on the basis of a 360-day year (the “Stated Amount”).
The Issuing and Paying Agent is authorized to draw on the Series A-3 Letter of Credit in an aggregate amount not to exceed the Stated Amount of the Series A-3 Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the Series A-3 Letter of Credit, in one or more Drawings (as defined in the Series A-3 Letter of Credit), payable as set forth in the Series A-3 Letter of Credit on any Business Day (as defined in the Series A-3 Letter of Credit), by presentation of the appropriate certifications, (i) for the payment at maturity of the principal of and interest on Series A-3 Notes or (ii) for the payment at maturity of the principal of and interest to maturity on Series A-3 Notes that otherwise mature on or after the date that the Issuing and Paying Agent receives a Final Drawing Notice (as defined in the Series A-3 Letter of Credit) from the Series A-3 Bank.
Upon the Series A-3 Bank honoring any Drawing, the Stated Amount and the amount available to be drawn under the Series A-3 Letter of Credit by the Issuing and Paying Agent pursuant to any subsequent Drawing shall be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount shall be increased when and to the extent, but only when and to the extent (i) (A) of transfer by the Issuing and Paying Agent to the Series A-3 Bank on the date such Drawing is honored of proceeds of Series A-3 Notes issued on such date or (B) the Issuing and Paying Agent receives written notice from the Series A-3 Bank that the Series A-3 Bank has been reimbursed by or on behalf of the Commission for any amount drawn under the Series A-3 Letter of Credit by any Drawing, and (ii) that the Issuing and Paying Agent has not received a No-Issuance Notice (as defined in the Series A-3 Letter of Credit) from the Series A-3 Bank.
The Series A-3 Letter of Credit shall expire at the close of business of the Series A-3 Bank, on the date (the earliest of such date to occur referred to as the “Termination Date”) which is the earliest of (i) February 15, 2030 (unless extended pursuant to the terms of the Series A-3 Letter of Credit and the Series A-3 Reimbursement Agreement), (ii) the later of the date on which the Series A-3 Bank receives written notice from the Issuing and Paying Agent that an Alternate Facility (as defined in the Issuing and Paying Agent Agreement) has been substituted for the Series A-3 Letter of Credit in accordance with the Issuing and Paying Agent Agreement and the effective date of any such Alternate Facility (after the Series A-3 Bank honors any properly presented and conforming Drawing on such date), (iii) the date on which the Series A-3 Bank receives written notice from the Issuing and Paying Agent that there are no longer any Series A-3 Notes Outstanding within the meaning of the Issuing and Paying Agent Agreement and that the Issuing and Paying Agent elects to terminate the Series A-3 Letter of Credit, (iv) the earlier of (a) the fifteenth (15th) calendar day after the date on which the Issuing and Paying Agent receives the Final Drawing Notice and (b) the date on which the drawing resulting from the delivery of the Final Drawing Notice is honored, and (v) the earlier of (a) the third (3rd) Business Day (as defined in the Series A-3 Letter of Credit) after the date on which the Commission receives an Acceleration Notice (as defined herein), and (b) the date on which the Drawing resulting from the delivery of the Acceleration Notice is honored under the Series A-3 Letter of Credit.
Pursuant to the Issuing and Paying Agent Agreement, no Series A-3 Notes may be outstanding at the time of any substitution of an Alternate Facility for the Series A-3 Letter of Credit.
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Series A-3 Reimbursement Agreement Events of Default
If any of the following events occurs, each such event will be an “Event of Default” under the Series A-3 Reimbursement Agreement:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation (as defined in the Series A-3 Reimbursement Agreement), or (ii) any Obligation (as defined in the Series A-3 Reimbursement Agreement) (other than a Reimbursement Obligation) under the Series A-3 Reimbursement Agreement or under the Fee Agreement (as defined in the Series A-3 Reimbursement Agreement) and, in such case, such failure continues for five (5) Business Days (as defined in the Series A- 3 Reimbursement Agreement);
(b) any representation or warranty made by or on behalf of the Commission in the Series A-3 Reimbursement Agreement or in any other Basic Document (as defined in the Series A-3 Reimbursement Agreement) or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered; (c) the Commission defaults in the due performance or observance of certain covenants set forth in the Series A-3 Reimbursement Agreement;
(d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the Series A-3 Reimbursement Agreement (other than as specified in any other Event of Default thereunder) or any other Basic Document and such default remains unremedied for a period of thirty (30) days after the occurrence thereof;
(e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its debts generally as they become due, (iii) makes an assignment for the benefit of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property (as defined in the Series A-3 Reimbursement Agreement), (v) institutes any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) takes any corporate action in furtherance of any matter described in clauses (i) through (v) above, or (vii) fails to contest in good faith any appointment or proceeding described in paragraph (f) under the “SERIES A-3 LETTER OF CREDIT AND SERIES A-3 REIMBURSEMENT AGREEMENT—Series A-3 Reimbursement Agreement Events of Default”;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in clause (v) of paragraph (e) under the “SERIES A-3 LETTER OF CREDIT AND SERIES A-3 REIMBURSEMENT AGREEMENT —Series A-3 Reimbursement Agreement Events of Default,” above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged, undismissed and unstayed for a period of thirty (30) days; (g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (as defined in the Series A-3 Reimbursement Agreement) of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction;
(h) any material provision of the Series A-3 Reimbursement Agreement, the Charter, the Power Bonds Indenture or any other Basic Document or any operative document related to the Power
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Enterprise Debt at any time for any reason ceases to be valid and binding on the Commission for any reason (including, without limitation, as a result of any legislative or administrative action by a Governmental Authority with competent jurisdiction) or shall be declared by any court or other Governmental Authority with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission, or the Commission publicly contests the validity or enforceability of any obligation to pay Power Enterprise Debt (as defined in the Series A-3 Reimbursement Agreement), including, without limitation, the Power Bonds Indenture, or any Authorized Representative publicly repudiates or otherwise denies in writing that it has any further liability or obligation under or with respect to any provision of the Series A-3 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Power Enterprise Debt, including, without limitation, the Power Bonds Indenture;
(i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Power Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Power Enterprise Debt was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Power Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) or cause any such Power Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Power Enterprise Debt; (k) the Commission (i) defaults on the payment of the principal of or interest on any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Power Enterprise Debt) was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Debt (other than Power Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) or cause any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Power Enterprise Debt); (l) any final, nonappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 are entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded and unstayed for a period of thirty (30) days;
(m) (i) the Commission shall default in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any other Basic Document (as defined respectively therein) has occurred;
(n) a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service is rendered to the effect that interest on the Series A-3 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A-3 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Moody’s, Fitch or S&P (i) downgrades its long-term rating of any Senior Debt (as defined in the Series A-3 Reimbursement Agreement) of the Commission to below “Baa2” (or its
22 4926-7007-0137.1
equivalent),“BBB” (or its equivalent), or “BBB” (or its equivalent), respectively, or (ii) suspends or withdraws its rating of the same; or
(p) the passage of any Law (as defined in the Series A-3 Reimbursement Agreement) has occurred which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under the Series A-3 Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the Series A-3 Reimbursement Agreement or any of the other Basic Documents.
Series A-3 Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the Series A-3 Reimbursement Agreement, the Series A- 3 Bank may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the Series A-3 Reimbursement Agreement or by law provided:
(a) declare (i) the principal of and interest on the Bank Note to be immediately due and payable prior to the maturity thereof and (ii) all Obligations to be immediately due and payable, whereupon the same are immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “LETTERS OF CREDIT AND REIMBURSEMENT AGREEMENTS— Series A-3 Reimbursement Agreement Events of Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by the Series A-3 Bank in writing); or (b) issue a No Issuance Notice (the effect of which will be as provided in the Series A-3 Reimbursement Agreement), reduce the Stated Amount of the Series A-3 Letter of Credit to the amount of the then outstanding Series A-3 Notes supported by the Series A-3 Letter of Credit plus a corresponding amount of interest coverage and/or terminate the Stated Amount as the then outstanding Series A-3 Notes are paid and terminate the Series A-3 Letter of Credit when no Series A-3 Notes remain outstanding; or (c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the Series A-3 Letter of Credit to occur on the fifteenth (15) calendar day after the date of receipt thereof by the Issuing and Paying Agent); or
(d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.
Upon the occurrence and during the continuance of an Event of Default, all amounts owing to the Bank hereunder shall bear interest at the Default Rate (as defined in the Series A-3 Reimbursement Agreement), payable on demand. Upon the occurrence of an “event of default” under the Issuing and Paying Agent Agreement, the Series A- 3 Bank may by notice to the Commission and the Issuing and Paying Agent (such notice, the “Acceleration Notice”), declare the principal of all outstanding Series A-3 Notes, and the interest accrued thereon, to be due and payable immediately, whereupon the same shall become and shall be immediately due and payable and instruct the Issuing and Paying Agent to submit a Drawing under the Series A-3 Letter of Credit to pay such immediately due and payable amount.
THE BANKS
The following information has been furnished by the Banks for use in this Offering Memorandum. Such information has not been independently confirmed or verified by the Commission. No representation is made as to the accuracy or adequacy of such information subsequent to the date hereof. No representation is made herein by the Commission or the Dealers that the information contained and incorporated herein by reference is correct. The Commission has assumed no obligation to update such information in the future, or to advise of any adverse change in the financial condition of the Banks. Investors are advised to obtain and carefully review any financial reports and
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other information published after the date hereof about the Banks prior to making a decision to purchase the applicable Commercial Paper Notes.
Bank of America, N.A.
[To be updated prior to posting]
Bank of America, N.A. (“Bank of America”) is a national banking association organized under the laws of the United States, with its principal executive offices located in Charlotte, North Carolina. Bank of America is a wholly-owned indirect subsidiary of Bank of America Corporation (the “Corporation”) and is engaged in a general consumer banking, commercial banking and trust business, offering a wide range of commercial, corporate, international, financial market, retail and fiduciary banking services. As of September 30, 2024, Bank of America had consolidated assets of $2.566 trillion, consolidated deposits of $2.018 trillion and stockholder’s equity of $243.688 billion based on regulatory accounting principles.
The Corporation is a bank holding company and a financial holding company, with its principal executive offices located in Charlotte, North Carolina. Additional information regarding the Corporation is set forth in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, together with its subsequent periodic and current reports filed with the Securities and Exchange Commission (the “SEC”).
The SEC maintains a website at www.sec.gov which contains the filings that the Corporation files with the SEC such as reports, proxy statements and other documentation. The reports, proxy statements and other information the Corporation files with the SEC are also available at its website, www.bankofamerica.com.
The information concerning the Corporation and Bank of America is furnished solely to provide limited introductory information and does not purport to be comprehensive. Such information is qualified in its entirety by the detailed information appearing in the referenced documents and financial statements referenced therein.
Bank of America will provide copies of the most recent Bank of America Corporation Annual Report on Form 10-K, any subsequent reports on Form 10-Q, and any required reports on Form 8-K (in each case, as filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended), and the publicly available portions of the most recent quarterly Call Report of Bank of America delivered to the Comptroller of the Currency, without charge, to each person to whom this document is delivered, on the written request of such person. Written requests should be directed to:
Bank of America Corporation
Office of the Corporate Secretary/Shareholder Relations One Bank of America Center
100 North Tryon Street, NC1-007-56-06
Charlotte, North Carolina 28255
PAYMENTS OF PRINCIPAL AND INTEREST ON SERIES A-1 NOTES AND THE SERIES A-2 NOTES WILL BE MADE FROM DRAWINGS UNDER THE SERIES A-1 LETTER OF CREDIT AND THE SERIES A-2 LETTER OF CREDIT, RESPECTIVELY. ALTHOUGH THE SERIES A-1 LETTER OF CREDIT AND THE SERIES A-2 LETTER OF CREDIT ARE EACH A BINDING OBLIGATION OF BANK OF AMERICA, THE SERIES A-1 NOTES AND THE SERIES A-2 NOTES ARE NOT DEPOSITS OR OBLIGATIONS OF THE
CORPORATION OR ANY OF ITS AFFILIATED BANKS AND ARE NOT GUARANTEED BY ANY OF THESE ENTITIES. THE SERIES A-1 NOTES AND THE SERIES A-2 NOTES ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY AND ARE SUBJECT
TO CERTAIN INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
The delivery of this information shall not create any implication that there has been no change in the affairs of the Corporation or Bank of America since the date of the most recent filings referenced herein, or that the information contained or referred to under this caption is correct as of any time subsequent to the referenced date.
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Sumitomo Mitsui Banking Corporation, acting through its New York Branch [To be updated prior to posting]
Sumitomo Mitsui Banking Corporation (Kabushiki Kaisha Mitsui Sumitomo Ginko) (“SMBC”) is a joint stock corporation with limited liability (Kabushiki Kaisha) under the laws of Japan. The registered head office of SMBC is located at 1-1-2, Marunouchi, Chiyoda-ku, Tokyo, 100-0005, Japan.
SMBC was established in April 2001 through the merger of two leading banks, The Sakura Bank, Limited and The Sumitomo Bank, Limited. In December 2002, Sumitomo Mitsui Financial Group, Inc. (“SMFG”) was established through a statutory share transfer ( kabushiki-iten) as a holding company under which SMBC became a wholly-owned subsidiary.
SMBC is one of the world’s leading commercial banks and provides an extensive range of banking services to its customers in Japan and overseas. In Japan, SMBC accepts deposits, makes loans and extends guarantees to corporations, individuals, governments and governmental entities. It also offers financing solutions such as syndicated lending, structured finance and project finance. SMBC also underwrites and deals in bonds issued by or under the guarantee of the Japanese government and local government authorities, and acts in various administrative and advisory capacities for certain types of corporate and government bonds. Internationally, SMBC operates through a network of branches, representative offices, subsidiaries and affiliates to provide many financing products, including syndicated lending and project finance.
The New York Branch of SMBC is licensed by the New York State Department of Financial Services to conduct branch banking business at 277 Park Avenue, New York, New York, and is subject to examination by the New York State Department of Financial Services and the Federal Reserve Bank of New York.
Financial and Other Information
Audited consolidated financial statements for SMFG and its consolidated subsidiaries, as well as other corporate data, financial information and analyses, are available in English on SMFG’s website at www.smfg.co.jp/english. The information on SMFG’s website does not form part of this Offering Memorandum and is not incorporated herein by reference. SMBC does not accept any responsibility for any information contained in this Offering Memorandum other than the information relating to SMBC, acting through its New York Branch.
The delivery of this Offering Memorandum shall not create any implication that there has been no change in the affairs of SMBC since the date hereof, or that the information contained or referred to herein is correct as of any time subsequent to its date.
RATINGS
[Ratings to be confirmed] Fitch has assigned a rating of “F1+” to the Series A-1 Notes. S&P has assigned a rating of “A-1” to the Series A-1 Notes. Each of such ratings is based on the understanding that the Series A-1 Letter of Credit has been issued by the Series A-1 Bank. Fitch has assigned a rating of “F1+” to the Series A-2 Notes. S&P has assigned a rating of “A-1” to the Series A-2 Notes. Each of such ratings is based on the understanding that the Series A-2 Letter of Credit has been issued by the Series A-2 Bank. Fitch has assigned a rating of “F1” to the Series A-3 Notes. S&P has assigned a rating of “A-1” to the Series A-3 Notes. Each of such ratings is based on the understanding that the Series A-3 Letter of Credit has been issued by the Series A-3 Bank.
Such ratings reflect only the views of such organizations and an explanation of the significance of such ratings may be obtained only from the agencies at the following addresses: Fitch Ratings, Inc., 33 Whitehall Street, New York, New York 10004 and S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC, 55 Water Street, New York, New York 10041. The Commission furnished to such rating agencies certain information and materials regarding the Commercial Paper Notes and the Power Enterprise. In addition, the Bank furnished certain information to such rating agencies regarding the Bank and its applicable Letter of Credit and applicable Reimbursement Agreement. There is no assurance such ratings will continue for any given period or that they will
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not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant and, therefore, any prospective purchaser should confirm the ratings prior to purchasing the Commercial Paper Notes. Any such change in or withdrawal of such ratings could have an adverse effect on the market for or market price of the Commercial Paper Notes. The above ratings are not recommendations to buy, sell or hold the Commercial Paper Notes. The Commission has not undertaken to provide notice to the holders of the Commercial Paper Notes of any change in the ratings on the Commercial Paper Notes.
The ratings on the Commercial Paper Notes may be adversely affected by a downgrade of the credit ratings of the Bank. The Commission undertakes no responsibility to oppose any such change or withdrawal. Although the Commission has covenanted to maintain a credit or liquidity facility for the Commercial Paper Notes, it is not obligated to replace the Bank in the event of a downgrade of the Bank’s rating. The Commission has not covenanted to provide notice to holders of the Commercial Paper Notes of any downgrade of the credit ratings of the Bank.
ABSENCE OF LITIGATION
[CAT to confirm] There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body pending or, to the best of the knowledge of the Commission after reasonable investigation, threatened in any way (i) seeking to restrain or enjoin the issuance, sale or delivery of any of the Commercial Paper Notes or (ii) challenging the validity of the Commercial Paper Notes.
THE DEALERS
The Commission has appointed Barclays Capital Inc., Goldman Sachs & Co. LLC and RBC Capital Markets, LLC, each as a non-exclusive dealer with respect to the offering and sale of the Commercial Paper Notes.
Each Dealer and its respective affiliates together comprise a full-service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, advisory, investment management, principal investment, hedging, financing and brokerage activities. Each Dealer and its respective affiliates may have, from time to time, performed and may in the future perform, various investment banking services for Commission for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, each Dealer and its respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities and financial instruments which may include bank loans and/or credit default swaps) for its own account and for the accounts of its customers and may at any time hold long and short positions in such securities and instruments. Such investment securities activities may involve securities and instruments of the Commission. Each Dealer and its respective affiliates may also communicate independent investment recommendations, market color or trading ideas and publish independent research views in respect of such offerings of the Commission.
TAX MATTERS
Series A-1 Notes and Series A-2 Notes
[Orrick to review]
On March 7, 2019, Orrick, Herrington & Sutcliffe LLP, Tax Counsel to the Commission (“Tax Counsel”), delivered its opinion that, based upon an analysis of then existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Series A-1 Notes and Series A-2 Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the tax certificate of the Commission, dated March 7, 2019 (as it has been or may be amended or supplemented from time to time, the “Series A-1 and Series A-2 Tax Certificates”), will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and exempt from State of California personal income taxes. Tax Counsel’s opinion stated that interest on the Series A-1 Notes and Series A-2 Notes is not a specific preference item for purposes of the federal alternative minimum tax. Tax Counsel expressed no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Series A-1 Notes or the Series A-2 Notes. Tax Counsel now observes
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that interest on the Series A-1 Notes and Series A-2 Notes included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax. A complete copy of the opinion of Tax Counsel, which speaks only as of its date, is set forth in Appendix B-1 hereto. Such opinion has not been updated since the date of its issuance and Tax Counsel is not rendering an opinion on the current tax status of the Series A-1 Notes or the Series A-2 Notes.
Notice 94-84, 1994-2 C.B. 559, states that the Internal Revenue Service (the “IRS”) is studying whether the amount of the payment at maturity on short-term debt obligations (i.e., debt obligations with a stated fixed rate of interest which mature not more than one year from the date of issue) that is excluded from gross income for federal income tax purposes is (i) the stated interest payable at maturity or (ii) the difference between the issue price of the short-term debt obligations and the aggregate amount to be paid at maturity of the short-term debt obligations (the “original issue discount”). For this purpose, the issue price of the short-term debt obligations is the first price at which a substantial amount of the short-term debt obligations is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of Dealer, placement agents or wholesalers). Until the IRS provides further guidance with respect to tax-exempt short-term debt obligations, taxpayers may treat either the stated interest payable at maturity or the original issue discount as interest that is excluded from gross income for federal income tax purposes. However, taxpayers must treat the amount to be paid at maturity on all tax-exempt short-term debt obligations in a consistent manner. Prospective purchasers of Series A-1 Notes and Series A-2 Notes should consult their own tax advisors with respect to the tax consequences of ownership of Series A-1 Notes and Series A-2 Notes if the prospective purchaser elects original issue discount treatment.
Series A-1 Notes or Series A-2 Notes purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) (“Premium Series A-1 or Series A-2 Notes”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of notes, like the Premium Series A-1 or Series A-2 Notes, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a beneficial owner’s basis in a Premium Series A-1 or Series A-2 Note, will be reduced by the amount of amortizable bond premium properly allocable to such beneficial owner. Beneficial owners of Premium Series A-1 or Series A-2 Notes should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.
The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Series A-1 Notes and Series A-2 Notes.
The Commission has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Series A-1 Notes and Series A-2 Notes will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Series A-1 Notes and Series A-2 Notes being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series A-1 Notes and Series A-2 Notes. The opinion of Tax Counsel, which speaks only as of its date, assumed the accuracy of these representations and compliance with these covenants.
Tax Counsel will not undertake, and has not undertaken, to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Tax Counsel’s attention after March 7, 2019, may adversely affect or have adversely affected the value of, or the tax status of interest on, the Series A-1 Notes and Series A-2 Notes. Accordingly, the opinion of Tax Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.
Although Tax Counsel rendered an opinion on March 7, 2019, that interest on the Series A-1 Notes and Series A-2 Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the Series A-1 and Series A-2 Tax Certificates, will be excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Series A-1 Notes and Series A-2 Notes may otherwise affect a beneficial owner’s federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the beneficial owner or the beneficial owner’s other items of income or deduction. Tax Counsel expressed no opinion regarding any such other tax consequences.
Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions, including any proposals, clarifications or decisions occurring after March 7, 2019, may cause interest on the Series A-1
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Notes and Series A-2 Notes to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Series A-1 Notes and Series A-2 Notes. Prospective purchasers of the Series A-1 Notes and Series A-2 Notes should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, including those occurring after March 7, 2019, as to which Tax Counsel expressed no opinion.
The opinion of Tax Counsel delivered on March 7, 2019, was based on then current legal authority, covered certain matters not directly addressed by such authorities, and represented Tax Counsel’s judgment as to the proper treatment of the Series A-1 Notes and Series A-2 Notes for federal income tax purposes. It is not binding on the IRS or the courts. Furthermore, Tax Counsel did not give, cannot give and will not give any opinion or assurance about the activities of the Commission after the date of such opinion, or about the effect of changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS occurring after the date of its opinion. The Commission has covenanted, however, to comply with the requirements of the Code.
Tax Counsel’s engagement with respect to the Series A-1 Notes and Series A-2 Notes ended on March 7, 2019, and, unless separately engaged, Tax Counsel is not obligated to defend the Commission or the beneficial owners regarding the tax-exempt status of the Series A-1 Notes and Series A-2 Notes in the event of an audit examination by the IRS. Under current procedures, the beneficial owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax- exempt notes is difficult, obtaining an independent review of IRS positions with which the Commission legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Series A-1 Notes and Series A-2 Notes for audit, or the course or result of such audit, or an audit of notes presenting similar tax issues may affect the market price for, or the marketability of, the Series A-1 Notes and Series A-2 Notes, and may cause the Commission or the beneficial owners to incur significant expense.
Payments on the Series A-1 Notes and Series A-2 Notes generally will be subject to U.S. information reporting and possibly to “backup withholding.” Under Section 3406 of the Code and applicable U.S. Treasury Regulations issued thereunder, a non-corporate beneficial owner of Series A-1 Notes and Series A-2 Notes may be subject to backup withholding with respect to “reportable payments,” which include interest paid on the Series A-1 Notes and Series A-2 Notes and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the Series A-1 Notes and Series A-2 Notes. The payor will be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. taxpayer identification number (“TIN”) to the payor in the manner required, (ii) the IRS notifies the payor that the TIN furnished by the payee is incorrect, (iii) there has been a “notified payee underreporting” described in Section 3406(c) of the Code or (iv) the payee fails to certify under penalty of perjury that the payee is not subject to withholding under Section 3406(a)(1)(C) of the Code. Amounts withheld under the backup withholding rules may be refunded or credited against a beneficial owner’s federal income tax liability, if any, provided that the required information is timely furnished to the IRS. Certain beneficial owners (including among others, corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.
Subseries A-3 Notes
In the opinion of Tax Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Subseries A-3 Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the tax certificate of the Commission, dated February 18, 2025 (as it may be amended or supplemented from time to time, the “Subseries A-3 Tax Certificate”), will be excluded from gross income for federal income tax purposes under Section 103 of the Code and will be exempt from State of California personal income taxes. Tax Counsel is of the further opinion that interest on the Subseries A-3 Notes will not be a specific preference item for purposes of the federal individual alternative minimum tax. Tax Counsel observes that interest on the Subseries A-3 Notes included in adjusted financial statement income of certain corporations will not be excluded from the federal corporate alternative minimum tax. Tax Counsel expresses no opinion regarding any other tax consequences related
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to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Subseries A-3 Notes. A complete copy of the proposed form of opinion of Tax Counsel is set forth in Appendix B-2.
Notice 94-84, 1994-2 C.B. 559, states that the IRS is studying whether the amount of the payment at maturity on short-term debt obligations (i.e., debt obligations with a stated fixed rate of interest which mature not more than one year from the date of issue) that is excluded from gross income for federal income tax purposes is (i) the stated interest payable at maturity or (ii) the difference between the issue price of the short-term debt obligations and the aggregate amount to be paid at maturity of the short-term debt obligations (the “original issue discount”). For this purpose, the issue price of the short-term debt obligations is the first price at which a substantial amount of the short- term debt obligations is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of Dealer, placement agents or wholesalers). Until the IRS provides further guidance with respect to tax-exempt short-term debt obligations, taxpayers may treat either the stated interest payable at maturity or the original issue discount as interest that is excluded from gross income for federal income tax purposes. However, taxpayers must treat the amount to be paid at maturity on all tax-exempt short-term debt obligations in a consistent manner.
Prospective purchasers of Subseries A-3 Notes should consult their own tax advisors with respect to the tax consequences of ownership of Subseries A-3 Notes if the prospective purchaser elects original issue discount treatment.
Subseries A-3 Notes purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) (“Premium Subseries A-3 Notes”) will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of notes, like the Premium Subseries A-3 Notes, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a beneficial owner’s basis in a Premium Subseries A-3 Note, will be reduced by the amount of amortizable bond premium properly allocable to such beneficial owner. Beneficial owners of Premium Subseries A-3 Notes should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.
The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Subseries A-3 Notes. The Commission has made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Subseries A-3 Notes will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Subseries A-3 Notes being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Subseries A-3 Notes. The opinion of Tax Counsel assumes the accuracy of these representations and compliance with these covenants. Tax Counsel will not undertake, and has not undertaken, to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring), or any other matters coming to Tax Counsel’s attention after the date of issuance of the Subseries A-3 Notes may adversely affect the value of, or the tax status of interest on, the Subseries A-3 Notes. Accordingly, the opinion of Tax Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.
Although Tax Counsel is of the opinion that interest on the Subseries A-3 Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the Subseries A-3 Tax Certificate, will be excluded from gross income for federal income tax purposes and will be exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Subseries A-3 Notes may otherwise affect a beneficial owner’s federal, state or local tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the beneficial owner or the beneficial owner’s other items of income or deduction. Tax Counsel expresses no opinion regarding any such other tax consequences.
Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Subseries A-3 Notes to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Subseries A-3 Notes. Prospective purchasers of the Subseries A-3 Notes should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations
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or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Tax Counsel expresses no opinion.
The opinion of Tax Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Tax Counsel’s judgment as to the proper treatment of the Subseries A-3 Notes for federal income tax purposes. It is not binding on the IRS or the courts. Furthermore, Tax Counsel cannot give and has not given any opinion or assurance about the future activities of the Commission, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Commission has covenanted, however, to comply with the requirements of the Code.
Tax Counsel’s engagement with respect to the Subseries A-3 Notes ends with the delivery of its opinion, and, unless separately engaged, Tax Counsel is not obligated to defend the Commission or the beneficial owners regarding the tax-exempt status of the Subseries A-3 Notes in the event of an audit examination by the IRS. Under current procedures, beneficial owners would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt notes is difficult, obtaining an independent review of IRS positions with which the Commission legitimately disagrees, may not be practicable.
Any action of the IRS, including but not limited to selection of the Subseries A-3 Notes for audit, or the course or result of such audit, or an audit of notes presenting similar tax issues may affect the market price for, or the marketability of, the Subseries A-3 Notes, and may cause the Commission or the beneficial owners to incur significant expense.
Payments on the Subseries A-3 Notes generally will be subject to U.S. information reporting and possibly to “backup withholding.” Under Section 3406 of the Code and applicable U.S. Treasury Regulations issued thereunder, a non-corporate beneficial owner of Subseries A-3 Notes may be subject to backup withholding with respect to “reportable payments,” which include interest paid on the Subseries A-3 Notes and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the Subseries A-3 Notes. The payor will be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. TIN to the payor in the manner required, (ii) the IRS notifies the payor that the TIN furnished by the payee is incorrect, (iii) there has been a “notified payee underreporting” described in Section 3406(c) of the Code or (iv) the payee fails to certify under penalty of perjury that the payee is not subject to withholding under Section 3406(a)(1)(C) of the Code. Amounts withheld under the backup withholding rules may be refunded or credited against a beneficial owner’s federal income tax liability, if any, provided that the required information is timely furnished to the IRS. Certain beneficial owners (including among others, corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.
Subseries A-3-T Notes
State of California Income Tax Considerations. In the opinion of Tax Counsel, interest on the Subseries A-3-T Notes is exempt from State of California personal income taxes.
Certain United States Federal Tax Considerations. Interest on the Subseries A-3-T Notes is not excluded from gross income for federal income tax purposes.
Prospective investors that are not individuals or regular C corporations who are U.S. persons purchasing the Subseries A-3-T Notes for investment should consult their own tax advisors as to any tax consequences to them from the purchase, ownership and disposition of the Subseries A-3-T Notes.
LEGAL MATTERS
Tax Counsel rendered the legal opinions described in “TAX MATTERS” above, copies of which are set forth in Appendices B-1 and B-2 hereto. Tax Counsel’s opinions speak only as of their dates. Tax Counsel is not passing upon and undertakes no responsibility for the accuracy, completeness or fairness of the information contained in this Offering Memorandum. Kutak Rock LLP, has served as Note Counsel to the Commission in connection with the Series A-3 Notes, and has rendered its opinion in connection therewith, a form of which is set forth in Appendix B-3 hereto.
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ADDITIONAL INFORMATION
The descriptions of and references to the Issuing and Paying Agent Agreement, the Letters of Credit and the Reimbursement Agreements contained herein do not purport to be complete, and such references to and descriptions of such documents and all other documents and other items described herein are qualified in their entirety by reference to each such document and item. Capitalized terms used herein not otherwise defined shall have the meanings ascribed thereto in the related Issuing and Paying Agent Agreement.
The Commercial Paper Notes are exempt from the continuing disclosure requirements of Securities Exchange Commission Rule 15c2-12, and the Commission has not undertaken to provide any secondary market information regarding the Commercial Paper Notes. The Commission files official statements and continuing disclosure reports and notices with respect to its Power Revenue Bonds with the Municipal Securities Rulemaking Board (the “MSRB”).
Such filings may be accessed through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. Neither such website nor the information contained therein (including such filings) are incorporated by reference herein.
The information and expressions of opinion in this Offering Memorandum are subject to change without notice, and neither the delivery thereof nor the delivery of this Offering Memorandum shall, under any circumstances, create any implication that there has been no change in the affairs of the Commission or such information or expressions of opinion since the date hereof.
Copies of the Resolutions, the Ordinances and the Issuing and Paying Agent Agreement, and redacted forms of the Letters of Credit and the Reimbursement Agreements, may be obtained from the Dealers, and may also be obtained from the Commission at the following address:
City and County of San Francisco
Public Utilities Commission
Attention: Capital Finance Director
525 Golden Gate Ave., 4th Floor
San Francisco, California 94102
Tel: (415) 551-2973
Fax. (415) 487-5258
Email: [email protected]
No dealer or other person has been authorized by the Commission to give any information or to make any representations other than those contained in this Offering Memorandum, and if given or made, such other information or representations must not be relied upon as having been authorized by the Commission.
The Dealers have provided the following sentence for inclusion in this Offering Memorandum. The Dealers have reviewed the information in this Offering Memorandum in accordance with, and as part of, their responsibility to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Dealers do not guarantee the accuracy or completeness of such information.
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APPENDIX A
BOOK-ENTRY SYSTEM FOR COMMERCIAL PAPER NOTES
General
One master Commercial Paper Note in the aggregate principal amount not exceeding the $125,000,000 available to secure the Commercial Paper Notes (Power Series) Series A-1 (Tax-Exempt), have been registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, NY.
One master Commercial Paper Note in the aggregate principal amount not exceeding the $125,000,000 available to secure the Commercial Paper Notes (Power Series) Series A-2 (Tax-Exempt), have been registered in the name of Cede & Co., as nominee of DTC.
Two master Commercial Paper Notes in the collective, aggregate principal amount not exceeding the $100,000,000 evidencing the Commercial Paper Notes (Water Series, Proposition E), Subseries A-3 (Tax-Exempt) and Subseries A-3-T (Taxable), respectively, have been registered in the name of Cede & Co., as nominee of DTC.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Commission believes to be reliable, but the Commission takes no responsibility for the accuracy thereof.
Book-Entry System
DTC will act as securities depository for the Commercial Paper Notes. The Commercial Paper Notes 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.
DTC, the world’s largest securities 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 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of 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 is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. 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 a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchases of the Commercial Paper Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Commercial Paper Notes on DTC’s records. The ownership interest of each actual purchaser of each Commercial Paper Note (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their 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 Commercial Paper Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial
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Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Commercial Paper Notes, except in the event that use of the book-entry system for the Commercial Paper Notes is discontinued.
To facilitate subsequent transfers, all Commercial Paper Notes 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 the Commercial Paper Notes 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 Commercial Paper Notes; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Commercial Paper Notes 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 the Commercial Paper Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Commercial Paper Notes. For example, Beneficial Owners of Commercial Paper Notes may wish to ascertain that the nominee holding the Commercial Paper Notes 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.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Commercial Paper Notes unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Commission as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Commercial Paper Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Payments of principal of and interest on the Commercial Paper Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Commission or the Issuing and Paying Agent, 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, the Issuing and Paying Agent, or the Commission, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of and interest on the Commercial Paper Notes to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Commission or the Issuing and Paying Agent, 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.
NEITHER THE COMMISSION NOR THE ISSUING AND PAYING AGENT WILL HAVE ANY
RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR
BENEFICIAL OWNERS WITH RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS.
Neither the Commission nor the Issuing and Paying Agent can give any assurances that DTC, DTC Participants, Indirect Participants or others will distribute payments of principal of and interest on the Commercial Paper Notes paid to DTC or its nominee, as the registered Owner, or any redemption or other notice, to the Beneficial Owners or that they will do so on a timely basis or that DTC will serve and act in a manner described in this Offering Memorandum.
Discontinuation of the Book-Entry Only System
DTC may discontinue providing its services as depository with respect to the Commercial Paper Notes at any time by giving reasonable notice to the Commission or the Issuing and Paying Agent. Under such circumstances, in
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the event that a successor depository is not obtained, Commercial Paper Note certificates will be printed and delivered as described in the Issuing and Paying Agent Agreement.
The Commission may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, Commercial Paper Note certificates will be printed and delivered as described in the Issuing and Paying Agent Agreement.
SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE COMMERCIAL PAPER NOTES,
AS NOMINEE OF DTC, REFERENCES HEREIN TO THE OWNERS OR HOLDERS OF THE COMMERCIAL PAPER NOTES (OTHER THAN UNDER THE CAPTION “TAX MATTERS” HEREIN) SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE COMMERCIAL PAPER NOTES.
NEITHER THE COMMISSION, THE ISSUING AND PAYING AGENT, NOR THE DEALERS WILL
HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC DIRECT PARTICIPANTS, INDIRECT
PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DTC DIRECT PARTICIPANT, OR INDIRECT PARTICIPANT; (II) THE DELIVERY OF ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE
OWNERS OF THE COMMERCIAL PAPER NOTES UNDER THE ISSUING AND PAYING AGENT AGREEMENT; (III) THE PAYMENT BY DTC OR ANY DTC DIRECT PARTICIPANT OR INDIRECT
PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR INTEREST DUE WITH RESPECT TO THE COMMERCIAL PAPER NOTES; (IV) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED OWNER OF COMMERCIAL PAPER NOTES; OR (V) ANY OTHER MATTER.
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APPENDIX B-1
COPY OF MARCH 2019 BOND COUNSEL OPINION
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APPENDIX B-2
FORM OF SPECIAL TAX COUNSEL OPINION
February 18, 2025
Public Utilities Commission of the
City and County of San Francisco
San Francisco, California
Public Utilities Commission of the
City and County of San Francisco
Commercial Paper Notes (Power Series)
Subseries A-3 (Tax Exempt) and Subseries A-3-T (Taxable) (Special Tax Opinion)
Ladies and Gentlemen:
We have acted as special tax counsel to the Public Utilities Commission of the City and County of San Francisco (the “Issuer”) in connection with authorization of issuances of up to $100,000,000 aggregate principal amount (at any time Outstanding) of commercial paper notes designated the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Power Series) Subseries A-3 (Tax-Exempt) (the “Subseries A-3 Notes”) and Subseries A-3-T (Taxable) (the “Subseries A-3-T Notes” and, together with the Subseries A-3 Notes, the “Series A-3 Notes”), to be issued pursuant to the Second Amended and Restated Issuing and Paying Agent Agreement, dated as of February 1, 2025 (the “Issuing and Paying Agent Agreement”), by and between the Issuer and U.S. Bank Trust Company, National Association, as issuing and paying agent (the “Issuing and Paying Agent”). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Issuing and Paying Agent Agreement.
In such connection, we have reviewed the Issuing and Paying Agent Agreement, the Tax Certificate of the Issuer, dated the date hereof (the “Tax Certificate”), an opinion of counsel to the Issuer, certificates of the Issuer, the Issuing and Paying Agent and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein. In rendering the opinions expressed herein, we expressly have assumed the correctness of the opinion of Kutak Rock LLP, note counsel to the Issuer that, among other matters, the Series A-3 Notes will be valid and binding agreements of the Issuer when issued in accordance with the Issuing and Paying Agent Agreement. We call attention to the fact that the interest on the Subseries A-3 Notes may not be excluded from gross income for federal income tax purposes and interest on the Series A-3 Notes may not be exempt from State of California personal income taxes if the Series A-3 Notes are not valid and binding obligations of the Issuer.
The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof and before or after the Series A-3 Notes are issued.
We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. Accordingly, this letter speaks only as of its date and is not intended to, and may not, be relied upon or otherwise used in connection with any such actions, events or matters. We disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures provided to us and the due and legal execution and delivery of each such document by each party thereto and that each such document constitutes a valid and binding agreement of such party. We have assumed, without undertaking to verify, the accuracy (as of the date hereof and as of each date of issuance from time to time of the Series A-3 Notes) of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Issuing and Paying Agent Agreement and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure
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that future actions, omissions or events will not cause interest on the Subseries A-3 Notes to be included in gross income for federal income tax purposes, possibly retroactive to the date on which the first Subseries A-3 Notes were issued. We call attention to the fact that the rights and obligations under the Series A-3 Notes, the Issuing and Paying Agent Agreement and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, receivership, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against cities and counties in the State of California. We express no opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the property described in or as subject to the lien of the Issuing and Paying Agent Agreement or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such property. Our services did not include financial or other non-legal advice. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Offering Memorandum or other offering material relating to the Series A-3 Notes and express no view with respect thereto.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the opinion that interest on the Subseries A-3 Notes, when issued in accordance with the Issuing and Paying Agent Agreement and the Tax Certificate, will be excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”). The amount treated as interest on the Subseries A-3 Notes and excluded from gross income will depend upon the taxpayer’s election under Internal Revenue Service Notice 94-84. Interest on the Subseries A-3 Notes will not be a specific preference item for purposes of the federal individual alternative minimum tax. We observe that interest on the Subseries A-3 Notes included in adjusted financial statement income of certain corporations will not be excluded from the federal corporate alternative minimum tax. We observe that interest on the Subseries A-3-T Notes will not be excluded from gross income for federal income tax purposes under Section 103 of the Code. Interest on the Series A-3 Notes will be exempt from State of California personal income taxes. We express no opinion regarding other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Series A-3 Notes.
Faithfully yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
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APPENDIX B-3
FORM OF NOTE COUNSEL OPINION
February 18, 2025
Public Utilities Commission of the
City and County of San Francisco
San Francisco, California
Sumitomo Mitsui Banking Corporation,
acting through its New York Branch
New York, New York
Re: $100,000,000 Public Utilities Commission of the City and County of San Francisco, Commercial Paper Notes (Power Series) Subseries A-3 (Tax-Exempt) and Subseries A-3-T (Taxable) Ladies and Gentlemen:
We have acted as counsel to the Public Utilities Commission of the City and County of San Francisco (the “Commission”) with respect to the delivery of the letter of credit related to the Commission’s Commercial Paper Notes (Power Series) Subseries A-3 (Tax-Exempt) and Subseries A-3-T (Taxable) (together, the “Commercial Paper Notes”) provided by Sumitomo Mitsui Banking Corporation, acting through its New York Branch (the “Bank”). The Commercial Paper Notes have been authorized for issuance pursuant to the Charter of the City and County of San Francisco (the “City”), Article V of Chapter 43 of Part I of the San Francisco Administrative Code, enacted by Ordinance No. 203-98 adopted by the Board of Supervisors of the City (the “Board”) on June 8, 1998 and signed by the Mayor of the City on June 19, 1998, as amended by Ordinance 270-06 adopted by the Board on October 24, 2006 and signed by the Mayor of the City on October 31, 2006 (as amended, the “Procedural Ordinance”) to establish a procedure for the Commission to issue commercial paper, and various other ordinances and a resolution of the Board and various resolutions of the Commission (such other ordinances and resolution of the Board and resolutions of the Commission, collectively with the Procedural Ordinance, the “Issuance Authorizations”), and a Second Amended and Restated Issuing and Paying Agent Agreement, dated as of February 1, 2025 (the “Issuing and Paying Agent Agreement”), by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association, in such capacity, the “Issuing and Paying Agent”).
The payment of principal of and interest on the Commercial Paper Notes is supported by an irrevocable direct-pay letter of credit (the “Letter of Credit”), issued pursuant to the terms of a Reimbursement Agreement, dated as of February 1, 2025 (the “Reimbursement Agreement”), between the Commission and the Bank. This opinion is being delivered pursuant to Section 3.1(a)(ii) of the Reimbursement Agreement as a condition of the issuance of the Letter of Credit, and the Issuing and Paying Agent Agreement. Capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Reimbursement Agreement.
Pursuant to the Issuing and Paying Agent Agreement and the Reimbursement Agreement, the Commission has delivered to the Bank the Bank Note, dated February 18, 2025 (the “Bank Note”), evidencing the obligation of the Commission to repay to the Bank any Reimbursement Obligations pursuant to the terms and conditions set forth in the Reimbursement Agreement.
In connection with the opinions set forth below, we have examined the Charter of the City and County of San Francisco; the Commercial Paper Notes; the Issuing and Paying Agent Agreement, the Issuance Authorizations; the Reimbursement Agreement; the Fee Agreement, dated February 18, 2025 (the “Fee Agreement”), between the Commission and the Bank; the Bank Note; the Dealer Agreements, each dated as of March 1, 2023, as amended by the First Amendment to Dealer Agreement, dated as of February 18, 2025, each by and between the Commission and
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the respective bank named therein (collectively, the “Dealer Agreements”), and such other documents, instruments and materials as we deemed necessary to render this opinion.
The opinions and conclusions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions or conclusions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the Commission. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the aforementioned documents. We have further assumed compliance with all covenants and agreements contained in such documents. In addition, we call attention to the fact that the rights and obligations under the documents referred to herein, and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against cities and counties in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the foregoing documents.
Based upon the foregoing, we are of the opinion that:
(a) The Commission is duly organized and validly existing as a commission of the City pursuant to the Charter with full legal power and authority to execute and deliver and perform its obligations under the Reimbursement Agreement, the Fee Agreement, the Dealer Agreements, the Bank Note, the Issuing and Paying Agent Agreement and the other Basic Documents (as such term is defined in the Reimbursement Agreement), as applicable, and to issue the Commercial Paper Notes and the Bank Note. (b) The Letter of Credit is authorized under, and is being delivered pursuant to, the Issuing and Paying Agent Agreement.
(c) The Reimbursement Agreement, the Fee Agreement, the Dealer Agreements, the Issuing and Paying Agent Agreement, the Commercial Paper Notes, the Bank Note and the other Basic Documents are valid and binding agreements of the Commission enforceable against the Commission in accordance with their respective terms, subject to bankruptcy, insolvency, moratorium or other laws affecting creditors’ rights, to general principles of equity and to limitations on remedies against public agencies.
No attorney-client relationship has existed or exists between our firm and the Bank. This opinion is issued to and for the sole benefit of the above addressees and their permitted successors and assigns and is issued for the sole purpose of the transaction specifically referred to herein. No person other than the above addressees and their permitted successors and assigns may rely upon this opinion without our express prior written consent. This opinion may not be utilized by the addressees for any other purpose whatsoever and may not be quoted by the addressees without our express prior written consent; provided that this letter may be included in a transcript of the proceedings.
Our engagement with respect to the transaction referred to herein terminates upon the date of this letter. We assume no obligation to review or supplement this opinion subsequent to its date, whether by reason of a change in the current laws, by legislative or regulatory action, by judicial decision or for any other reason.
Very truly yours,
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APPENDIX C
POWER ENTERPRISE FINANCIAL STATEMENTS
[Attached]