Cleveland Clinic Health System Obligated Group - FMSbonds.com
Cleveland Clinic Health System Obligated Group - FMSbonds.com Cleveland Clinic Health System Obligated Group - FMSbonds.com
of the total reserves held under its self-insurance program or otherwise available, or (ii) litigation, proceedings orinvestigations in which an adverse determination would not have a materially adverse effect on the financialcondition or results of operations of the Obligated Issuers, taken as a whole. The Cleveland Clinic has also advisedthat no litigation, proceedings or investigations are pending or, to its knowledge, threatened against any ObligatedIssuer, that in any manner questions the right of such Obligated Issuer to enter into the transactions described in thisOffering Circular.THE BOND TRUSTEEThe Huntington National Bank (“Huntington”), which is acting as the Bond Trustee, is a national bankingassociation duly organized and existing under the laws of the United States and is duly authorized to exercisecorporate trust powers in the State. Huntington’s principal corporate trust office is located at 7 Easton Oval,EA4E63, Columbus, Ohio 43219. The Cleveland Clinic maintains banking relationships with Huntington in theordinary course of business. Huntington will also act as Paying Agent for the Series 2008A Bonds, bond trustee forthe Variable Rate Bonds, bond trustee for the County Bonds and as the Master Trustee under the Master TrustIndenture.FINANCIAL ADVISORPonder & Co. has served as financial advisor to the Cleveland Clinic and the other Obligated Issuers forpurposes of assisting with the development and implementation of a bond structure in connection with the issuanceof the Series 2008A Bonds. Ponder & Co. is not obligated to undertake, and has not undertaken, an independentverification of nor does Ponder & Co. assume responsibility for the accuracy, completeness, or fairness of theinformation contained in this Official Statement. Ponder & Co. is an independent advisory firm and is not engagedin the business of underwriting or distributing securities.LEGAL MATTERSLegal matters incident to the issuance of the Series 2008A Bonds and with regard to the tax-exempt statusof the interest thereon (see “TAX MATTERS”) are subject to the legal opinion of Squire, Sanders & DempseyL.L.P., Bond Counsel to the Commission. A signed copy of that opinion, dated and speaking only as of the date ofthe original delivery of the Series 2008A Bonds, will be delivered to the Underwriter and the Commission.The proposed text of the legal opinion is set forth in Appendix D hereto. The legal opinion to be deliveredmay vary from that text if necessary to reflect facts and law on the date of delivery. The legal opinion of BondCounsel will speak only as of its date, and subsequent distribution of it by recirculation of the Offering Circular orotherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any ofthe matters referred to in the opinion subsequent to its date.While Bond Counsel has participated in the preparation of portions of this Offering Circular, it has not beenengaged to confirm or verify, and expresses and will express no opinion as to, the accuracy, completeness or fairnessof any statements in this Offering Circular, or in any other reports, financial information, offering or disclosuredocuments or other information pertaining to the Cleveland Clinic or the Series 2008A Bonds that may be preparedor made available by the Cleveland Clinic, the Underwriter, or otherwise to the holders of the Series 2008A Bondsor others.In addition to rendering the legal opinion, Bond Counsel will assist in the preparation of and advise theCommission and the Cleveland Clinic concerning documents for the bond transcript.Certain legal matters will be passed upon for the Cleveland Clinic and the other Obligated Issuers inopinions rendered by David W. Rowan, Esq., Chief Legal Officer of the Cleveland Clinic and by their specialcounsel, Jones Day. Jones Day has also served as disclosure counsel to the Cleveland Clinic in connection with thepreparation of this Offering Circular. Certain legal matters concerning Florida Clinic will be passed upon by Squire,Sanders & Dempsey L.L.P., in its capacity as Bond Counsel to the Commission for the Series 2008A Bonds.Certain legal matters will be passed upon for the Underwriter by its counsel, McCall, Parkhurst & Horton L.L.P.58
Frederick R. Nance, Regional Managing Partner of Squire, Sanders & Dempsey L.L.P., is a member of theBoard of Trustees of the Cleveland Clinic. Stephen Brogan, Esq., Managing Partner of Jones Day, is a member ofthe Board of Trustees of the Cleveland Clinic. Patrick F. McCartan, Esq., a senior partner with Jones Day, is anEmeritus Trustee of the Cleveland Clinic and is a member of the Board of Trustees’ Executive Committee. MichaelHorvitz, of counsel with Jones Day, is also a member of the Board of Trustees of the Cleveland Clinic.RATINGSMoody’s and Standard & Poor’s have assigned their municipal bond ratings of “Aa2” and “AA-”,respectively, to the Series 2008A Bonds. Such ratings reflect only the views of such organizations, and anexplanation of the significance of such ratings may be obtained only from the rating agencies furnishing the same.There is no assurance that such ratings will remain in effect for any given period of time or that such ratings will notbe revised downward or upward or withdrawn entirely by any of such rating agencies if, in the judgment of suchrating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have anadverse effect on the market price or marketability of the Series 2008A Bonds.UNDERWRITINGAll of the Series 2008A Bonds will be purchased by the Underwriter under a Contract of Purchase betweenJ.P. Morgan Securities, Inc. and the Commission at a purchase price of $449,469,919, reflecting an underwriter’sdiscount of $2,216,466, plus original issue premium of $3,812,918, less original issue discount of $4,466,532. TheContract of Purchase provides that the Underwriter will purchase all of the Series 2008A Bonds if any arepurchased. Pursuant to Letter of Representations and Indemnification delivered concurrently with the issuance ofthe Series 2008A Bonds, the Cleveland Clinic will indemnify the Underwriter and the Commission against losses,claims and liabilities arising out of materially incorrect or incomplete statements of information contained in thisOffering Circular pertaining to the Cleveland Clinic, the Cleveland Clinic Health System, or the Obligated Group.The Underwriter may offer and sell the Series 2008A Bonds to certain dealers (including depositing theSeries 2008A Bonds into investment trusts) and to others at a price lower than that offered to the public.INDEPENDENT AUDITORSThe consolidated financial statements of the Cleveland Clinic and controlled affiliates as of December 31,2007 and 2006 and for the years then ended appearing in APPENDIX B to this Offering Circular have been auditedby Ernst & Young LLP, independent auditors, as stated in their report thereon also appearing in APPENDIX B.INTERIM FINANCIAL INFORMATIONThe unaudited consolidated financial statements of the Cleveland Clinic and controlled affiliates as of June30, 2008 and for the three and six months ended June 30, 2008 are available from Digital Assurance CertificationLLC, a post-bond issuance, compliance, and monitoring system for municipal bond issuers (“DAC”) (website:www.dacbond.com). The unaudited consolidated financial statements were prepared by management of the HealthSystem in accordance with GAAP. Operating results for the three and six months ended June 30, 2008 are notnecessarily indicative of the results to be expected for the year ending December 31, 2008. The financialinformation that is available from DAC is incorporated herein by reference and should be read in conjunction withthe consolidated financial statements, related notes, and other financial information included in this OfferingCircular, including the Appendices.ELIGIBILITY UNDER STATE LAW FOR INVESTMENT ANDAS SECURITY FOR THE DEPOSIT OF PUBLIC MONEYSUnder the Act, and to the extent investments of the following are subject to the laws of the State of Ohio,the Series 2008A Bonds will be lawful investments for banks, societies for savings, building and loan associations,savings and loan associations, deposit guarantee associations, trust companies, trustees, fiduciaries, insurancecompanies, including domestic for life and domestic not for life, trustees or other officers having charge of sinking59
- Page 11 and 12: (ii) acquisition of magnetic resona
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- Page 71 and 72: TABLE OF CONTENTSPageINTRODUCTION .
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- Page 91 and 92: E. UTILIZATIONThe following tables
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of the total reserves held under its self-insurance program or otherwise available, or (ii) litigation, proceedings orinvestigations in which an adverse determination would not have a materially adverse effect on the financialcondition or results of operations of the <strong>Obligated</strong> Issuers, taken as a whole. The <strong>Cleveland</strong> <strong>Clinic</strong> has also advisedthat no litigation, proceedings or investigations are pending or, to its knowledge, threatened against any <strong>Obligated</strong>Issuer, that in any manner questions the right of such <strong>Obligated</strong> Issuer to enter into the transactions described in thisOffering Circular.THE BOND TRUSTEEThe Huntington National Bank (“Huntington”), which is acting as the Bond Trustee, is a national bankingassociation duly organized and existing under the laws of the United States and is duly authorized to exercisecorporate trust powers in the State. Huntington’s principal corporate trust office is located at 7 Easton Oval,EA4E63, Columbus, Ohio 43219. The <strong>Cleveland</strong> <strong>Clinic</strong> maintains banking relationships with Huntington in theordinary course of business. Huntington will also act as Paying Agent for the Series 2008A Bonds, bond trustee forthe Variable Rate Bonds, bond trustee for the County Bonds and as the Master Trustee under the Master TrustIndenture.FINANCIAL ADVISORPonder & Co. has served as financial advisor to the <strong>Cleveland</strong> <strong>Clinic</strong> and the other <strong>Obligated</strong> Issuers forpurposes of assisting with the development and implementation of a bond structure in connection with the issuanceof the Series 2008A Bonds. Ponder & Co. is not obligated to undertake, and has not undertaken, an independentverification of nor does Ponder & Co. assume responsibility for the accuracy, <strong>com</strong>pleteness, or fairness of theinformation contained in this Official Statement. Ponder & Co. is an independent advisory firm and is not engagedin the business of underwriting or distributing securities.LEGAL MATTERSLegal matters incident to the issuance of the Series 2008A Bonds and with regard to the tax-exempt statusof the interest thereon (see “TAX MATTERS”) are subject to the legal opinion of Squire, Sanders & DempseyL.L.P., Bond Counsel to the Commission. A signed copy of that opinion, dated and speaking only as of the date ofthe original delivery of the Series 2008A Bonds, will be delivered to the Underwriter and the Commission.The proposed text of the legal opinion is set forth in Appendix D hereto. The legal opinion to be deliveredmay vary from that text if necessary to reflect facts and law on the date of delivery. The legal opinion of BondCounsel will speak only as of its date, and subsequent distribution of it by recirculation of the Offering Circular orotherwise shall create no implication that Bond Counsel has reviewed or expresses any opinion concerning any ofthe matters referred to in the opinion subsequent to its date.While Bond Counsel has participated in the preparation of portions of this Offering Circular, it has not beenengaged to confirm or verify, and expresses and will express no opinion as to, the accuracy, <strong>com</strong>pleteness or fairnessof any statements in this Offering Circular, or in any other reports, financial information, offering or disclosuredocuments or other information pertaining to the <strong>Cleveland</strong> <strong>Clinic</strong> or the Series 2008A Bonds that may be preparedor made available by the <strong>Cleveland</strong> <strong>Clinic</strong>, the Underwriter, or otherwise to the holders of the Series 2008A Bondsor others.In addition to rendering the legal opinion, Bond Counsel will assist in the preparation of and advise theCommission and the <strong>Cleveland</strong> <strong>Clinic</strong> concerning documents for the bond transcript.Certain legal matters will be passed upon for the <strong>Cleveland</strong> <strong>Clinic</strong> and the other <strong>Obligated</strong> Issuers inopinions rendered by David W. Rowan, Esq., Chief Legal Officer of the <strong>Cleveland</strong> <strong>Clinic</strong> and by their specialcounsel, Jones Day. Jones Day has also served as disclosure counsel to the <strong>Cleveland</strong> <strong>Clinic</strong> in connection with thepreparation of this Offering Circular. Certain legal matters concerning Florida <strong>Clinic</strong> will be passed upon by Squire,Sanders & Dempsey L.L.P., in its capacity as Bond Counsel to the Commission for the Series 2008A Bonds.Certain legal matters will be passed upon for the Underwriter by its counsel, McCall, Parkhurst & Horton L.L.P.58