About this bond issuance
The City expects to use the proceeds of the Series 2017A Bonds to finance portions of the capital improvements listed below, which are part of the City's 10-Year Capital Plan. The City may, in its discretion, use the proceeds of the Series 2017A Bonds to finance other capital improvements, and the use of proceeds is not limited to the following capital improvements:
Bike Path rehabilitation at an approximate cost of $3,150,000
Facilities reinvestment at an approximate cost of $1,633,940
Sidewalk reinvestment at an approximate cost of $2,100,000
Street and curb reinvestment above dedicated tax at an approximate cost of $1,150,000
The City expects to issue additional series of public improvement bonds to finance the balance of the costs of these capital improvements.
ObligorThe obligor is the organization that holds ultimate responsibility for the bond issuance, and will ensure that investors get repaid.
City of Burlington, Vermont
IssuerOften the obligor. However, sometimes issuers partner with an authorized conduit financing non-profit within their state or city to issue the bonds.
City of Burlington, Vermont
AuthorityBefore an issuer can raise money for a project, they must first have the legal authority to do so. This authority is sometimes preceded by a general election, and awarded after the successful passing of a bond measure.
The Series 2017A Bonds are being issued pursuant to (i) Section 63 of the Charter of the City, (ii) a City vote on November 8, 2016, and (iii) resolutions of the City Council.
SecurityThe security section is a breakdown of the funds an issuer is planning to use to repay its investors. This repayment can come from a variety of sources, including local taxes.
The Bonds are general obligations of the City to which its full faith credit and unlimited taxing powers are pledged.
Paying Agent: City of Burlington, Vermont
The City of Burlington is rated A3 by Moody's Investors Service. As of March 13, 2017, the City was put on "Positive Outlook" by Moody's. For more details, please visit http://bit.ly/burlington-credit-rating
Expected Closing/Settlement Date: April 12, 2017
Expected Optional Redemption Date: November 1, 2026
First Coupon Payment Date: November 1, 2017
Interest paid semiannually on May 1st and November 1st.
The financial and economic condition of the City as well as the market for the Bonds could be affected by a variety of factors, some of which are beyond the City's control. There can be no assurance that adverse events in the State of Vermont, the City of Burlington, or in other jurisdictions in the country will not occur which might affect the market price of and the market for the Bonds. A significant default or other financial crisis in the affairs of the State of Vermont, the City of Burlington, or another jurisdiction or any of its agencies or political subdivisions could adversely affect the market for, and market value, of outstanding debt obligations, including the Bonds. Additionally, purchase of bonds in small denominations can impact market liquidity of the bonds.
The market value of the Bonds will also be affected by changes in the level of interest rates and generally rising interest rates may cause the market value of the Bonds to decrease either during the extended order period or in the secondary market. There can be no assurance that any sale of Bonds prior to maturity will be at a price at least equal to the price paid by a purchaser at the time of initial issuance or the date of purchase of any Bonds.
The Bonds will be sold in $1,000 denominations. Bondholders purchasing Bonds issued in smaller denominations, or purchased and held in a smaller aggregate dollar amount, can be adversely affected by limited future liquidity for the Bonds, and may encounter additional and higher expenses, if the Bonds are sold in the secondary market or not held to maturity. The City has no obligation to provide for a market for purchases or resale of the Bonds.
Bond allocation process will follow the below priority of orders:
1. Chittenden County Residents
2. Vermont Residents
3. National Retail
Definition of Retail: Retail investors are individual investors or investors that serve as proxies for retail investors such as bank trust departments, investment advisors and firms representing investors with separately managed accounts.
Order Size Limits: No restrictions. Aggregated orders over $1 million subject to pro-rata allocation.
Please note that the order timeline is subject to change and acceleration.