A by-law of the City of Ottawa to authorize the borrowing upon 30 year sinking fund debentures in the principal amount of $102,000,000.00 towards the cost of a certain capital work of the City of Ottawa.
Whereas subsection 401(1) of the Municipal Act, 2001, as amended (the “Act”) provides that a municipality may incur a debt for municipal purposes, whether by borrowing money or in any other way, and may issue debentures and prescribed financial instruments and enter prescribed financial agreements for or in relation to the debt;
and whereas subsection 408(2.1) of the Act provides that a municipality may issue a debenture or other financial instrument for long-term borrowing only to provide financing for a capital work;
and whereas in respect of the capital work of the City of Ottawa set out in Column 1 of Schedule “A” (the “Capital Work”), a determination was made by the City of Ottawa that it is a capital project that is beneficial to the environment, in accordance with the City of Ottawa Green Debenture Framework found on the City of Ottawa’s website under Investor Relations/ Green Bond Framework (the “Green Debenture Framework”). The Capital Work was authorized on the basis of debentures being issued therefor by the By-laws enumerated in Column 2 of Schedule “A”, and for which an additional cost amount and an additional debenture authority was approved by one of such By-laws. The Council of the City of Ottawa has authorized the Capital Work, such additional cost amount and such additional debenture authority in the amount shown in Column 3 of Schedule “A”. Before authorizing the Capital Work, such additional cost amount and such additional debenture authority the Council of the City of Ottawa had its City Treasurer calculate an updated limit in respect of its most recent annual debt and financial obligation limit received from the Ministry of Municipal Affairs in accordance with the applicable regulation. Prior to the Council of the City of Ottawa authorizing the Capital Work, such additional cost amount and such additional debenture authority, the City Treasurer determined that the estimated annual amount payable in respect of the Capital Work, such additional cost amount and such additional debenture authority would not cause the City of Ottawa to exceed its updated limit and that the approval of the Capital Work, such additional cost amount and such additional debenture authority by the Ontario Municipal Board or by any successor tribunal pursuant to the applicable regulation was not required;
and whereas on April 11, 2007 the City of Ottawa adopted a Debt and Financing Policy which was subsequently amended (the “Policy”) and which establishes the administrative framework and guidelines for issuing short and long-term debt;
and whereas, the City Treasurer has, as authorized under Section 11, Schedule “B” of By-law No. 2016-369, and pursuant to the Policy, authorized a debenture issue by entering into a letter agreement dated November 2, 2017 with the Principals described therein for the issue and sale of sinking fund debentures in the principal amount of $102,000,000.00 on the credit of the City of Ottawa (the “Letter Agreement”) for the Capital Work, payable at the time and bearing interest as hereinafter set forth;
Therefore the Council of the City of Ottawa enacts as follows:
For the Capital Work, the borrowing upon the credit of the City of Ottawa of the principal amount of $102,000,000.00 and the issue of sinking fund debentures therefor within the term of years set out in Column 6 of Schedule “A”, in minimum denominations of $1,000.00, as hereinafter set forth, are hereby authorized.
The Mayor and the City Treasurer of the City of Ottawa are hereby authorized to cause any number of sinking fund debentures in the principal amount of $102,000,000.00, as described in section 1 above, (the “Debentures”) payable as to principal on November 10, 2047 with semi-annual instalments of interest thereon on each of May 10 and November 10 to be issued for such amounts of money as may be required for the Capital Work in global and definitive forms, not exceeding in total the said principal amount of $102,000,000.00. The Debentures shall bear the City of Ottawa’s municipal seal and the signatures of the Mayor and of the City Treasurer of the City of Ottawa, all in accordance with the provisions of the Act. The municipal seal of the City of Ottawa and the signatures referred to in this section may be printed, lithographed, engraved or otherwise mechanically reproduced. The Debentures are sufficiently signed if they bear the required signatures and each person signing has the authority to do so on the date he or she signs. The Debentures shall initially be issued in global fully registered form as 3 certificates, each in the principal amount of $34,000,000.00 (in the aggregate principal amount of $102,000,000.00), each substantially in the form attached as Schedule “B” hereto and forming part of this By-law (the “Global Debentures”). The Global Debentures shall initially be issued in the name of CDS & CO. as nominee of CDS Clearing and Depository Services Inc. (“CDS”), and each shall provide for payment of principal and interest electronically in final and irrevocable same-day funds in accordance with the applicable requirements of CDS, so long as the Global Debentures are held by CDS.
- The Debentures shall all be dated the 10th day of November, 2017, and as to both principal and interest shall be expressed and be payable in lawful money of Canada. The Debentures shall be issued for a term of 30 years bearing interest at the rate of 25% per annum and shall be payable on the 10th day of November, 2047. In each year during such period, the amount of $3,315,000.00 shall be payable for interest on the Debentures in semi-annual instalments of $1,657,500.00 on each of May 10 and November 10. The amount of $2,323,319.36 shall be deposited on or before November 10 (commencing on November 10, 2018) by the City Treasurer of the City of Ottawa, or an authorized official of the City of Ottawa, into a sinking fund (the “Sinking Fund”), which amount, with interest compounded annually, will be sufficient to pay at maturity (November 10, 2047) the principal of the Debentures as required by the provisions of this By-law and the Act.
(2) Payments in respect of contributions to the Sinking Fund as well as principal of and interest on the Debentures shall be made only on a day on which banking institutions in Toronto, Ontario and Ottawa, Ontario, are not authorized or obligated by law or executive order to be closed (a “Business Day”) and if any date for payment is not a Business Day, payment shall be made on the next following Business Day and no further interest shall be paid in respect of the delay in such payment.
Interest shall be payable to the date of maturity of the Debentures and on default shall be payable both before and after default and judgment. Any amounts payable by the City of Ottawa as interest on overdue principal or interest in respect of the Debentures shall be paid out of current revenue. Whenever it is necessary to compute any amount of interest in respect of the Debentures for a period of less than one full year, other than with respect to regular interest payments, such interest shall be calculated on the basis of the actual number of days in the period and a year of 365 days or 366 days, if applicable.
In limited circumstances (as agreed to by both the City of Ottawa and CDS) the Global Debentures shall be exchangeable for certificated Debentures in definitive fully registered form in authorized denominations upon surrender of the Global Debentures to the City Treasurer of the City of Ottawa. Any of the Debentures issued as definitive Debentures may, with the approval of the Mayor be countersigned in writing by officials so designated by the Mayor. The definitive Debentures shall aggregate the same principal amount as the principal outstanding balance of the Global Debentures as of the record date for such exchange in accordance with the provisions of the Global Debentures, shall bear the same interest rate and maturity date, shall bear all unmatured interest obligations and shall have the same benefits and be subject to the same terms and conditions as the Global Debentures (except insofar as they specifically relate to the Global Debentures). In issuing definitive Debentures no change shall be made in the amount which would otherwise be payable in each year under the Global Debentures. The definitive Debentures shall be in fully registered form, payable as to principal and outstanding interest in lawful money of Canada at maturity upon presentation and surrender thereof at any specified branch in Canada of the City of Ottawa’s bank designated in the definitive Debentures. Prior to maturity the definitive Debentures shall be payable as to interest by cheque sent by mail to the registered addresses of the registered holders or, if authorized in writing, by electronic transfer.
In respect of the Debentures there shall be raised, as part of the general municipal levy the amount of $3,315,000.00 for interest on the Debentures in semi- annual instalments of $1,657,500.00 on each of May 10 and November 10. There shall also be raised in each year during the said period as part of the general municipal levy, the amount of $2,323,319.36 for deposit into the Sinking Fund on or before November 10 (commencing on November 10, 2018) for the payment at maturity (November 10, 2047) of the principal of the Debentures. In each such year, for the Capital Work, the said two amounts (the amount for interest and the amount for the contribution to the Sinking Fund) shall be raised as part of the general municipal levy, to the extent that such amounts have not been provided for by any other available source including other taxes or fees or charges imposed on persons or property by a by-law of any municipality.
The Debentures may contain any provision for their registration thereof authorized by any statute relating to municipal debentures in force at the time of the issue thereof.
The City of Ottawa shall maintain a registry in respect of the Debentures in which shall be recorded the names and the addresses of the registered holders and particulars of the Debentures held by them respectively and in which particulars of the cancellations, exchanges, substitutions and transfers of Debentures may be recorded and the City of Ottawa is authorized to use electronic, magnetic or other media for records of or related to the Debentures or for copies of them.
The City of Ottawa shall not be bound to see to the execution of any trust affecting the ownership of any Debenture or be affected by notice of any equity that may be subsisting in respect thereof. The City of Ottawa shall deem and treat registered holders of the Debentures, including the Global Debentures, as the absolute owners thereof for all purposes whatsoever notwithstanding any notice to the contrary and all payments to or to the order of registered holders shall be valid and effectual to discharge the liability of the City of Ottawa on the Debentures to the extent of the amount or amounts so paid. Where a Debenture is registered in more than one name, the principal of and interest from time to time payable on such Debenture shall be paid to or to the order of all the joint registered holders thereof, failing written instructions to the contrary from all such joint registered holders, and such payment shall constitute a valid discharge to the City of Ottawa. In the case of the death of one or more joint registered holders, despite the foregoing provisions of this section, the principal of and interest on any Debentures registered in their names may be paid to the survivor or survivors of such holders and such payment shall constitute a valid discharge to the City of Ottawa.
The Debentures are transferable or exchangeable at the office of the City Treasurer of the City of Ottawa upon presentation for such purpose accompanied by an instrument of transfer or exchange in a form approved by the City of Ottawa and which form is in accordance with the prevailing Canadian transfer legislation and practices, executed by the registered holder thereof or such holder’s duly authorized attorney or legal personal representative, whereupon and upon registration of such transfer or exchange and cancellation of the Debenture or Debentures presented, the Mayor and the City Treasurer shall issue and deliver a new Debenture or Debentures of an equal aggregate principal amount in any authorized denomination or denominations as directed by the transferor, in the case of a transfer or as directed by the registered holder in the case of an exchange.
The Mayor and the City Treasurer shall issue and deliver new Debentures in exchange or substitution for Debentures outstanding on the registry with the same maturity date and of like form which have become mutilated, defaced, lost, subject to a mysterious or unexplainable disappearance, stolen, destroyed or dematerialized, provided that the applicant therefor shall have: (a) paid such costs as may have been incurred in connection therewith; (b) (in the case when a Debenture is mutilated, defaced, lost, mysteriously or unexplainably missing, stolen, destroyed or dematerialized) furnished the City of Ottawa with such evidence (including evidence as to the certificate number of the Debenture in question) and indemnity in respect thereof satisfactory to the City of Ottawa in its discretion; and (c) surrendered to the City of Ottawa any mutilated or defaced Debenture in respect of which new Debentures are to be issued in substitution.
The Debentures issued upon any registration of transfer or exchange or in substitution for any Debentures or part thereof shall carry all the rights to interest if any, accrued and unpaid which were carried by such Debentures or part thereof and shall be so dated and shall bear the same maturity date and, subject to the provisions of this By- law, shall be subject to the same terms and conditions as the Debentures in respect of which the transfer, exchange or substitution is effected.
The cost of all transfers and exchanges, including the printing of authorized denominations of the new Debentures, shall be borne by the City of Ottawa. When any of the Debentures are surrendered for transfer or exchange the City Treasurer of the City of Ottawa shall: (a) in the case of an exchange, cancel and destroy the Debentures surrendered for exchange; (b) in the case of an exchange, certify the cancellation and destruction in the registry; (c) enter in the registry particulars of the new Debenture or Debentures issued in exchange and (d) in the case of a transfer, enter in the registry the name of the registered holder as directed by the transferor.
Subject to an agreement that the City of Ottawa may enter into to the contrary, reasonable fees may be imposed by the City of Ottawa for the substitution of a new Debenture or new Debentures for any of the Debentures that are mutilated, defaced, lost, mysteriously or unexplainably missing, stolen, destroyed or dematerialized and for the replacement of any of the interest cheques that are mutilated, defaced, lost, mysteriously or unexplainably missing, stolen or destroyed. When new Debentures are issued in substitution in these circumstances the City of Ottawa shall: (a) treat as cancelled and destroyed the Debentures in respect of which new Debentures will be issued in substitution; (b) certify the deemed cancellation and destruction in the registry; (c) enter in the registry particulars of the new Debentures issued in substitution; and (d) make a notation of any indemnities provided.
Except as otherwise expressly provided herein, any notice required to be given to a registered holder of one or more of the Debentures will be sufficiently given if a copy of such notice is mailed or otherwise delivered to the registered address of such registered holder.
- In accordance with the Letter Agreement, the Policy and the other relevant authorities, the Mayor and the City Treasurer are hereby authorized to cause the Debentures to be issued, one or more of the City Treasurer and the Clerk are hereby authorized to generally do all things and to execute all other documents and papers in the name of the City of Ottawa in order to carry out the sale of the Debentures through CDS’s book entry only system and the City Treasurer is authorized to affix the City of Ottawa’s municipal seal to any of such documents and papers.
- The money received by the City of Ottawa from the sale of the Debentures, including any premium, and any earnings derived from the investment of that money, after providing for the expenses related to their issue, if any, shall be initially invested in accordance with the Green Debenture Framework pending the application to the Capital Work or to another Eligible Project in accordance with the Green Debenture Framework, and to no other purpose except as permitted by the Green Debenture Framework and the Act.
The City of Ottawa has reserved the right to issue additional sinking fund debentures of the same maturity, interest rate and terms and conditions.
Subject to the City of Ottawa’s investment policies and goals and the applicable legislation, the City of Ottawa may, if not in default under the Debentures, at any time purchase any of the Debentures in the open market or by tender or by private contract at any price and on such terms and conditions (including, without limitation, the manner by which any tender offer may be communicated or accepted and the persons to whom it may be addressed) as the City of Ottawa may in its discretion determine.
This By-law comes into force on the day it is passed.
Enacted and passed this 8th day of November, 2017.
CITY CLERK MAYOR