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Home My WebLink About6.a. Approval of Amenments to Loan Agreement and Indenture - Koch RefiningCITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: DECEMBER 1, 1992 AGENDA ITEK: APPROVAL OF AMENDMENTS TO AGENDA SECTION: LOAN AGREEMENT AND INDENTURE - KOCH REFINING NEW BUSINESS PREPARED BY: SUSAN M. WALSH ADMINISTRATIVE ASSISTANT AGENDA NO. ADD ON--� `ATTACEdENTS: LETTER, RESOLUTION APPROVED BY: Attorney Mary Dyrseth of the law firm of Briggs and Morgan has requested to be at the Council meeting this evening to seek your approval of amendments to an Indenture and Loan Agreement initially entered into between the City and Koch Refining Company when the City authorized the issuance of $26,950,000 Pollution Control Revenue Refunding Bonds in 1984. Attached is a letter I received from Ms. Dyrseth this date which provides background on this item. In summary, amendments to the financing documents will allow Koch Refining to purchase and remarket the bonds. City Administrator Jilk advised me that the City will not be responsible for any costs involved with this transaction. Koch Refining will pay all costs including attorney fees billed by Briggs and Morgan. RECON ENDED ACTION: MOTION TO ADOPT A RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF FIRST SUPPLEMENTAL INDENTURE AND FIRST AMEND- MENT TO LOAN AGREEMENT IN CONNECTION WITH POLLUTION CONTROL REVENUE REFUNDING BONDS, (KOCH REFINING COMPANY PROJECT) SERIES 1984 COUNCIL ACTION: FROM BRIGGS MORGAN SP (MON)11.30.'92 13-34 LAW OFFICES I3IRIGGS AND 114ORGAN P807ESSIONAL ASS00XAW;O3q 2200 FIRST NATIONAL BAN8 33UIIMLWO SAINT DJLYJL, MXNNESOTA 5=1 TELEPHONE 4612) 223.3000 FAcszmzzjt 1612) 2110 - a450 wv-rr=w5 ;DIUNCT DIAzL 1sUXB1e32 November 30, 1992 (612) 223-6625 VIA FACSIMILE NO.7 PAGE 2 MZNNEAPOLIs o7P'I''xc� 2400 Ins CMM32 MINYzM1 I4, MI)MRSOTA 55409 TAIaMIONis (8144 0" 0400 PACSIXUX 18124 304-6115p Ms. Susan M. Walsh City Clerk 2875 145th Street West Rosemount, MN 55068 Re. City of Rosemount - $26,950,004 Pollution Control Revenue Refunding Bonds (Koch Refiningtompany Project) Series 1984 Dear Sue: Last week I sent you a resolution for consideration by the City Council approving, among other things, a First Supplemental Indenture and First Amendment to Loan Agreement in connection with the above referenced matter. The purpose of this letter is to briefly describe this transaction. In 1984, the City issued its $26,950,000 Pollution Control Revenue Refunding Bonds, Series 1984, in order to provide funds to refinance certain pollution control facilities for Koch Refining Company. The bonds were issued pursuant to an Indenture of Trust with First Trust National Association (the "Trustee"). Koch Refining Company entered into a Loan Agreement with the City under which it agreed to pay the principal and interest on the bonds, and to provide a letter of credit to secure the payment of the bonds. The Company would like to make certain amendments to the Indenture and Loan Agreement which will allow the (1) termination and withdrawal of the letter of credit, (2) change the index use to determine the floating rate on the bonds, (3) change the composition of the interest rate committee, and (4) clarify certain provisions in the Indenture. In order to amend the documents, the - Company must obtain the consent of the City, the Trustee, and the holders of the outstanding bonds. 3 BRIGGS MORGAN SP (MON711.30.'92 13=34 NO.7 PAGE 3 i BRIGGS drrxb MORGAN Ms. Susan M. Walsh November 30, 1992 Page Two If the City, Trustee and holders of the outstanding bonds consent to the amendments, upon withdrawal of the letter of credit, the bonds will be subject to mandatory purchase from the holders. The Company will then purchase the bonds from the existing holders, and remarket the bonds, secured by a guaranty from its parent corporation, Koch Industries, Inc. In summary, the Company has requested the City's consent to certain amendments to the financing documents which will allow it to purchase and remarket the bonds, secured with the guaranty of Foch Industries, Inc:, rather than the existing letter of credit. The amendments will not alter the fact that the bonds are special obligations of the City, payable- solely from payments the City receives under the Loan Agreement. The bonds- are not a debt of the City and neither the full faith and credit or taxing powers of the City are pledged to the payment of the bonds. If you have any questions, please give me a call. . _ . U Uri cc: Mr. Michael Miles CITY%OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 1992 - 133 RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF FIRST SUPPLEMENTAL INDENTURE AND FIRST AMENDMENT TO LOAN AGREEMENT IN CONNECTION WITH POLLUTION CONTROL REVENUE REFUNDING BONDS, (KOCH REFINING COMPANY PROJECT) SERIES 1984 WHEREAS, the City of Rosemount, Minnesota (the ,City") has heretofore issued its $26,950,000 Pollution Control Revenue Refunding Bonds (Koch Refining Company Project), Series 1984 (the "Bonds"), to refinance certain outstanding bonds which financed certain air and water pollution control facilities; and WHEREAS, the Bonds were issued pursuant to an Indenture of Trust dated as of December 13, 1984, executed by and between the City and First Trust National Association (formerly First Trust Company of Saint Paul) dated as of December 13, 1984 (the "Indenture"); and WHEREAS, pursuant to a Loan Agreement dated as of December 13, 1984, by and between the City and Koch Refining Company, a Delaware corporation (the "Company"), the Company agreed to make payments sufficient to pay the principal and interest on the Bonds and the purchase price of the Bonds; and WHEREAS, as additional security for the payment of principal and interest on the Bonds, the Company delivered an irrevocable letter of credit (the "Credit") issued by The Bank of Nova Scotia; and WHEREAS, the Company desires to amend the Indenture and Loan Agreement to, among other things, (i) terminate and withdraw the Credit, (ii) change the index used to determine the floating interest rate on the Bonds, (iii) change the composition of the Interest Rate Committee (as defined in the Indenture), and (iv) clarify certain provisions in the Indenture relating to the calculation of interest payments; and WHEREAS, the amendment of the Indenture and Loan Agreement require, among other things, the consent of the Holders of all of the Outstanding Bonds to these amendments. NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Rosemount as follows: 1. The forms of the First Amendment to Loan Agreement and First Supplemental Indenture are approved substantially in the 229163 forms submitted. The First Abendment to Loan Agreement and First Supplemental Indenture, in'substantially the forms submitted, and any other documents or certificaresdirectednecessary to beaexecuted inhthe transaction described therein, the Ma or and the Clerk. name of and on behalf of the City by Y 2. The City.hereby consents to the preparation and distribution of a Preliminary Remarketing Memorandum and final Remarketing Memorandum to brokers, dealers and other potential purchasers; provided that it is understood that athe cci lehas d relied upon the Company to assure the accuracy P ness of the information set forth in the Preliminary Remarketing Memorandum and Remarketing Memorandum and that therefore the City has not participated, and will not participate significantly, in the preparation of the Preliminary Remarketing Memorandum or the Remarketing Memorandum, that it has not made, and will not make, any independent investigation of the information contained therein, except under the heading "The Issuer", and it assumes no responsibility for the accuracy or completeness of such information. 3. The approval hereby given to the documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney prior to the execution of the documents. The execution of any instrument by the appropriate officer or officers of the City seem-authorizents d shall be conclusive evidence of the approval accordance with the terms hereof. In the absence of the Mayor or Clerk, any of the documents authorized by this resolution to be executed may be executed by the Acting Mayor or Clerk, respectively. Adopted this 1st day of December, 1992. Harry Willcox, Acting.11ayor Attest: Susan M. Walsh, City Clerk Motion by: Klassen Seconded by: Staats Voted in favor: Willcox, Staats, Klassen Voted against: None 229163 MEETING SCHEDULE NOVEMBER - DECEMBER, 1992 Tuesday, Nov. 24 5:00 P.M. Planning Commission 8:00 p.m. Special Council Mtg.-193 Budget Thursday & Friday Thanksgiving Holidays, City Hall Closed November 26, 27 Friday, Nov. 27 6:30 p.m. Christmas Tree Lighting Sat. Nov. 28-Dec.2 National League of Cities Conference Tuesday, Dec. 1 5:30 p.m. Port Authority Meeting 7:30 p.m. City Council Meeting Wednesday, Dec. 2 7:00 p.m. MVTA at CAC Bldg., Ap. Vly. Thursday, Dec. 3 7:30 p.m. Parks & Rec Committee Workshop Saturday, Dec. 5 6:00 p.m. City Christmas Party Monday, December 7 6:30 p.m. Utilities Commission Meeting Tuesday, December 8 `5:00 P.M. Planning Commission Thursday, December 10 8:00 P.M. City Council Special Meeting Budget Hearing Monday, December 14 7:00 p.m. Special -Council -Meeting, Comp. Guide Plan Tuesday, December 15 5:30 p.m. Port Authority Meeting 7:30 p.m. City Council Meeting Wednesday, December 16 7:00 p.m. Town Meeting Thursday, December 17 8:00 p.m. Continuation Date of Budget Hearing if Necessary Monday, December 21 7.30 p.m. Parks & Rec Committee Tuesday, December 22 5:00 P.M. Planning Commission Friday, December 25 Christmas City Hall Closed Friday, January 1 New Years City Hall Closed Tuesday, January 5 5:30 7:30 p.m. Port Authority Meeting Regular City Council Meeting p.m. City Council Meetings ist & 3rd Tuesday, at 7:30 p.m. Port Authority 1st & 3rd Tuesday, at 5:30 p.m. MVTA (Mtn Vly Tran. Auth) 4th Wed., Burnsville, 7:00 p.m.(amicdW for Nov) Parks & Recreation Comm. 3rd Monday, at 7:30 p.m. Planning Commission 2nd & 4th Tuesday, at 5:00 P.M. Utilities Commission 1st Monday after 1st Tues., 6:30