IRREVOCABLE REFUNDING INSTRUCTIONS
$19,000,000
Manteca Financing Authority
Sewer Revenue Bonds
Series 2009
$22,690,000
City of Manteca
Sewer Revenue Refunding Bonds Series 2012
$35,840,000
City of Manteca
Water Revenue Refunding Bonds Series 2012
These IRREVOCABLE REFUNDING INSTRUCTIONS (these “Instructions”), dated November ___, 2022, are given by the CITY OF MANTECA (the “City”), a general law city and municipal corporation organized and existing under the laws of the State of California, on behalf of itself and the MANTECA FINANCING AUTHORITY, a joint exercise of powers agency organized and existing under the laws of the State of California (the “Authority”), to U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (as successor to U.S. Bank National Association), acting as trustee for the hereinafter described bonds (the “Prior Trustee”); WlTNESSETH:
WHEREAS, the City owns and operates a system for the supply, treatment and distribution of water within the service area of the City (the “Water System”); and WHEREAS, to refinance improvements to the Water System, the City previously executed an Indenture, dated as of December 1, 2012, between the City and the Prior Trustee, pursuant to which the City issued its Water Revenue Refunding Bonds Series 2012 in the principal amount of $35,840,000 (the “2012 Water Bonds” or the “Prior Water Obligation”) and WHEREAS, the City owns and operates a system for the collection, treatment and disposal of wastewater within the service area of the City (the “Wastewater System”); and WHEREAS, to finance and refinance improvements to the Wastewater System, the City previously executed (1) Amendment No. 1 to Installment Sale Agreement, dated as of June 1, 2009, which amended that certain Installment Sale Agreement, dated as of December 1, 2003, between the City and the Authority, and the Authority issued its Sewer Revenue Bonds Series 2009, in the principal amount of $19,000,000 (the “2009 Sewer Bonds”), and (2) an Indenture, dated as of December 1, 2012, between the City and the Prior Trustee, pursuant to which the City issued its Sewer Revenue Refunding Bonds Series 2012, in the principal amount of $22,690,000 (the “2012 Sewer Bonds” and together with the 2009 Sewer Bonds, the “Prior Wastewater Obligations”); and WHEREAS, the Prior Water Obligation and the Prior Wastewater Obligations are sometimes collectively referred to herein as the “Prior Obligations”; and NOW, THEREFORE, the City, on behalf of itself and the Authority, hereby irrevocably instructs the Prior Trustee as follows:
Section 1. Redemption Funds. Pursuant to legal documents pursuant to which the Prior Obligations were issued, the Prior Trustee has established and maintains the Redemption Fund for each series of the Prior Obligations. All cash deposited in or transferred to the Redemption Fund pursuant to these Instructions are hereby irrevocably pledged as a special trust fund for the redemption of the applicable series of Prior Obligations. The Prior Trustee shall have no lien upon or right of set off against the cash at any time on deposit in the Redemption Fund, and such amounts shall be applied only as provided herein.
Section 2. Deposit and Transfer of Amounts into Redemption Funds. (a) 2009 Sewer Bonds. On or before the date hereof, the City shall cause to be transferred to the Prior Trustee for the 2009 Sewer Bonds the amount of $_________ in immediately available funds, for deposit into the Redemption Fund for the 2009 Sewer Bonds. Concurrently, the Prior Trustee will transfer $______ from the other funds and accounts held by the Prior Trustee for the 2009 Sewer Bonds to the Redemption Fund. As a result of the foregoing the deposits and transfers, the Prior Trustee for the 2009 Sewer Bonds shall hold a total of $_____ in the Redemption Fund for the 2009 Sewer Bonds. The Prior Trustee shall hold the amounts in the Redemption Fund uninvested. (b) 2012 Sewer Bonds. On or before the date hereof, the City shall cause to be transferred to the Prior Trustee for the 2012 Sewer Bonds the amount of $_________ in immediately available funds, for deposit into the Redemption Fund for the 2012 Sewer Bonds. Concurrently, the Prior Trustee will transfer $______ from the other funds and accounts held by the Prior Trustee for the 2012 Sewer Bonds to the Redemption Fund. As a result of the foregoing the deposits and transfers, the Prior Trustee for the 2012 Sewer Bonds shall hold a total of $_____ in the Redemption Fund for the 2012 Sewer Bonds. The Prior Trustee shall hold the amounts in the Redemption Fund uninvested. (c) 2012 Water Bonds. On or before the date hereof, the City shall cause to be transferred to the Prior Trustee for the 2012 Water Bonds the amount of $_________ in immediately available funds, for deposit into the Redemption Fund for the 2012 Water Bonds. Concurrently, the Prior Trustee will transfer $______ from the other funds and accounts held by the Prior Trustee for the 2012 Water Bonds to the Redemption Fund. As a result of the foregoing the deposits and transfers, the Prior Trustee for the 2012 Water Bonds shall hold a total of $_____ in the Redemption Fund for the 2012 Water Bonds. The Prior Trustee shall hold the amounts in the Redemption Fund uninvested.
Section 3. Proceedings for Redemption of Prior Obligations. The City, on behalf of its and the Authority, hereby irrevocably elects, and directs the Prior Trustee to redeem, on December 1, 2022, the following:
(a) all of the 2009 Sewer Bonds,
(b) the 2012 Sewer Bonds maturing on and after December 1, 2023 (the 2012 Sewer Bonds maturing on December 1, 2022 shall be paid as due), and (c) all of the 2012 Water Bonds.
The Prior Trustee was previously instructed to send on November 1, 2022, a notice of optional redemption to the owners of the Prior Obligations in substantially in the forms attached to that certain City instruction letter, dated October 31, 2022. The Prior Trustee is hereby instructed to file on the date hereof, defeasance notices substantially in the forms attached hereto as Exhibit A-1, Exhibit A-2, and Exhibit A-3, on the Municipal Securities Rulemaking Board’s EMMA System.
Section 4. Application of Funds to Pay and/or Redeem the Prior Obligations. The Prior Trustee shall apply the amounts on deposit in the Redemption Fund for each series of Prior Obligations to pay and/or optionally redeem the applicable series of Prior Obligations on December 1, 2022.
Section 5. Transfer of Remaining Funds. On December 1, 2022, following the payment and redemption described above, the Prior Trustee shall withdraw any amounts remaining on deposit in the Redemption Fund for each series of Prior Obligations and transfer such amounts to the City.
Section 6. Amendment. These Instructions shall be irrevocable. These Instructions may be amended or supplemented by the City, but only if the City shall file with the Prior Trustee (a) an opinion of nationally recognized bond counsel engaged by the City stating that such amendment or supplement will not, of itself, adversely affect the exclusion from gross income of interest represented by the Prior Obligations under federal income tax law, and (b) a certification of an independent accountant or independent financial adviser engaged by the City stating that such amendment or supplement will not affect the sufficiency of funds invested and held hereunder to make the payments required by Section 4.
Section 7. Concerning the Prior Trustee. The Prior Trustee shall not be liable for any loss from any investment made by it in accordance with the terms of these Instructions.
The Prior Trustee shall not be liable for the recitals or representations contained in these Instructions and shall not be responsible for the sufficiency of the Redemption Fund to pay the principal, interest and redemption premium on the Prior Obligations.
The protections, limitations from liability and indemnities provided to the Prior Trustee under the legal documents pursuant to which the Prior Obligations were issued shall be afforded to the Prior Trustee in acting pursuant to these Instructions and such provisions are incorporated by reference herein.
Section 8. Governing Law. These Instructions shall be construed in accordance with and governed by the laws of the State of California.
IN WITNESS WHEREOF, the City has irrevocably instructed the Prior Trustee.
CITY OF MANTECA
By:
Toni Lundgren
Interim City Manager
Accepted:
U.S. Bank Trust Company, National Association,
as Prior Trustee
By:
Authorized Officer
EXHIBIT A-1
NOTICE OF DEFEASANCE
$19,000,000
Manteca Financing Authority
Sewer Revenue Bonds
Series 2009
NOTICE IS HEREBY GIVEN, with respect to the above-captioned bonds (the “Bonds”), which Bonds were issued by the Manteca Financing Authority (the “Authority”) under a Trust Agreement, dated as of December 1, 2003, as supplemented and amended by a First Supplemental Trust Agreement, dated as of June 1, 2009 (together, the “Trust Agreement”), by and between the Authority and U.S. Bank National Association, now succeeded by U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), that all of the outstanding Bonds have been defeased and discharged in accordance with the Trust Agreement pursuant to which they were issued.
A conditional notice of redemption has previously been issued with respect to the Bonds, which have been called for optional redemption on December 1, 2022.
The Bonds that have been defeased are described as follows:
Maturity Date
Outstanding
Principal
Interest Rate
CUSIP No.*
Dec. 1, 2024
$560,000
4.87%
56452N BB9
Dec. 1, 2025
640,000
5.000
56452N BC7
Dec. 1, 2026
720,000
5.000
56452N BD5
Dec. 1, 2027
810,000
5.125
56452N BE3
Dec. 1, 2028
905,000
5.250
56452N BF0
Dec. 1, 2029
955,000
5.375
56452N BG8
Dec. 1, 2033
4,375,000
5.625
56452N BH6
Dec. 1, 2036
10,035,000
5.750
56452N BJ2
* CUSIP data are provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ. None of the Authority, the City and the trustee shall be responsible for the selection or use of the CUSIP numbers listed above, nor is any representation made as to the accuracy of the CUSIP numbers listed above or as printed on any Bond; the CUSIP numbers are included solely for the convenience of the owners of the Bonds.
By: U.S. Bank Trust Company, National Association
as Trustee
EXHIBIT A-2
NOTICE OF DEFEASANCE
$22,690,000
City of Manteca
(San Joaquin County, California)
Sewer Revenue Refunding Bonds
Series 2012
NOTICE IS HEREBY GIVEN, by the City of Manteca (the “City”) with respect to the above-captioned bonds (the “Bonds”), which Bonds were issued by the City under an Indenture, dated as of December 1, 2012 (the “Indenture”), by and between the City and U.S. Bank National Association, now succeeded by U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), that all of the outstanding Bonds have been defeased and discharged.
A conditional notice of redemption has previously been issued with respect to certain of the Bonds, which have been called for optional redemption on December 1, 2022.
The Bonds that have been defeased are as follows:
Maturity Date
Outstanding
Principal
Interest Rate
CUSIP No.*
Dec. 1, 2022
$1,755,000
5.000%
564533 BT3
Dec. 1, 2023
1,895,000
5.000
564533 BU0
Dec. 1, 2024
640,000
5.000
564533 BV8
Dec. 1, 2025
670,000
2.625
564533 BW6
Dec. 1, 2026
695,000
2.750
564533 BX4
Dec. 1, 2027
715,000
2.850
564533 BY2
Dec. 1, 2033
4,895,000
4.000
564533 BZ9
* CUSIP data are provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ. The City and the trustee shall not be responsible for the selection or use of the CUSIP numbers listed above, nor is any representation made as to the accuracy of the CUSIP numbers listed above or as printed on any Bond; the CUSIP numbers are included solely for the convenience of the owners of the Bonds.
By: U.S. Bank Trust Company, National Association
as Trustee
EXHIBIT A-3
NOTICE OF CONDITIONAL OPTIONAL REDEMPTION
$35,840,000
City of Manteca
(San Joaquin County, California)
Water Revenue Refunding Bonds
Series 2012
NOTICE IS HEREBY GIVEN, by the City of Manteca (the “City”) with respect to the above-captioned bonds (the “Bonds”), which Bonds were issued by the City under an Indenture, dated as of December 1, 2012 (the “Indenture”), by and between the City and U.S. Bank National Association, now succeeded by U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), that all of the outstanding Bonds have been defeased and discharged.
A conditional notice of redemption has previously been issued with respect to the Bonds, which have been called for optional redemption on December 1, 2022.
The Bonds that have been defeased are described as follows:
Maturity Date
Outstanding
Principal
Interest Rate
CUSIP No.*
July 1, 2023
$1,630,000
5.000%
56560 AL4
July 1, 2024
1,710,000
5.000
56560 AM2
July 1, 2025
1,800,000
5.000
56560 AN0
July 1, 2026
1,885,000
5.000
56560 AP5
July 1, 2027
1,980,000
5.000
56560 AQ3
July 1, 2033
14,155,000
5.000
56560 AR1
* CUSIP data are provided by CUSIP Global Services, which is managed on behalf of the American Bankers Association by S&P Capital IQ. The City and the trustee shall not be responsible for the selection or use of the CUSIP numbers listed above, nor is any representation made as to the accuracy of the CUSIP numbers listed above or as printed on any Bond; the CUSIP numbers are included solely for the convenience of the owners of the Bonds.
By: U.S. Bank Trust Company, National Association
as Trustee
-1-
[Signature page to Irrevocable Refunding Instructions]
Exhibit B
ATTACHMENT 3
ATTACHMENT 3