HomeMy WebLinkAbout23-075 Note Allonge (Amendment) for LIBOR modification for Shepards Path Conduit Debt
4646 Dakota Street SE
Prior Lake, MN 55372
RESOLUTION 23-75
AUTHORIZATION OF THE NOTE ALLONGE FOR LIBOR INCORPORATING THE
MODIFICATIONS RECOMMENDED HEREIN
Motion By: Braid Second By: Lake
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
pursuant to a resolution of the City Council of the City of Prior Lake, Minnesota
(the “City”), duly adopted on May 23, 2016, the City previously issued its
Senior Housing Revenue Refunding Note, Series 2016A (McKenna Crossing
Senior Housing Project) (the “Note”), on July 28, 2016, to Bremer Bank,
National Association, a national banking association (the “Lender”), pursuant
to Minnesota Statutes, Chapter 462C, as amended (the “Act”), in the original
aggregate principal amount of $5,155,000.00 for the purpose of providing
funds pursuant to a Loan Agreement dated July 28, 2016 (the “Loan
Agreement”), by and between the City and Shepherd’s Path Senior Housing,
Inc., a Minnesota nonprofit corporation (the “Borrower”), to refinance a project
consisting of the acquisition, construction and equipping of an approximately
154-unit elderly housing development consisting of approximately 82
congregate care units, approximately 54 assisted living units and
approximately 18 memory care units located adjacent to the Shepherd of the
Lake Evangelical Lutheran Church, located at 13760 McKenna Road in the
City (the “Project”); and
the City pledged and assigned to the Lender all of the City’s rights, title, and
interest in the Loan Agreement (except for certain reserved rights) pursuant to
a Pledge Agreement dated as of July 28, 2016, between the City and the
Lender; and
under the terms of the Loan Agreement, the Borrower has agreed to repay the
Note in specified amounts and at specified times sufficient to pay in full when
due the principal of, premium, if any, and interest on the Note; and
the Note is currently owned by the Lender; and
the City has been advised by the Lender that (a) the interest rate on the Note
is currently a variable rate that is to be adjusted on the 15th day of each
calendar month to a rate based upon the 30-Day LIBOR Rate (as defined in
the Note), plus a spread, and (b) the 30-Day LIBOR Rate is being phased out
effective June 30, 2023, and will no longer be available after that date; and
the Borrower and the Lender have agreed to replace the 30-Day LIBOR Rate
in the Note with the Fallback Rate (SOFR) (the “Modification”), as further
described in an Allonge to Note between the City, the Borrower, and the
Lender (the “Allonge”), a substantially final form of which has been provided to
the City; and
2
WHEREAS,
the Lender has advised the City that the Fallback Rate (SOFR), as modified by
the proposed spread for the Note, is a rate comparable to the 30-Day LIBOR
Rate, as modified by the existing spread applicable to the Note;
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The City approves the Modification and authorizes the execution of the Allonge.
3. The Allonge is hereby in all respects approved, subject to modifications that do not alter the
substance of the transactions and that are approved by Taft Stettinius & Hollister LLP as
bond counsel to the City; provided that delivery of the Allonge shall be conclusive evidence
of approval.
4. The Mayor and the City Manager are hereby authorized to execute and deliver the Allonge
and any other related documents on behalf of the City.
5. This Resolution shall be in full force and effect from and after its passage.
Passed and adopted by the Prior Lake City Council this 15th day of May 2023.
VOTE Briggs Braid Burkart Churchill Lake
Aye ☒ ☒ ☒ ☒ ☒
Nay ☐ ☐ ☐ ☐ ☐
Abstain ☐ ☐ ☐ ☐ ☐
Absent ☐ ☐ ☐ ☐ ☐
______________________________
Jason Wedel, City Manager