The Authority previously issued its $12,000,000 Variable Rate Demand Multifamily Housing Revenue Bonds (Valley View Senior Villas Project), Series A of 1990, of which $9,100,000 are currently outstanding (the “Bonds”) pursuant to an Indenture of Trust (the “Indenture”) between the Authority and Seattle-First National Bank, the predecessor to U.S. Bank Trust National Association (the “Trustee”), for the purpose of financing the multifamily residential rental project located in the City of Garden Grove known as “Valley View Senior Villas” (the “Project”) currently owned by Garden Grove Senior Housing, L.P., a California limited partnership (the “Owner”). 

The payment of principal and interest on the Bonds is currently secured by a letter of credit (the “Comerica Letter of Credit”) issued by Comerica Bank-California, a California banking corporation.  The Owner desires to cause a letter of credit (the “Union Bank Letter of Credit”) to be issued by MUFG Union Bank, N.A., a national banking association (“Union Bank”) in substitution for the Comerica Letter of Credit, all in accordance with the requirements of the Indenture.  

In connection with the issuance of the Bonds, the Authority, the Trustee and Wells Fargo Bank, N.A. entered into an Intercreditor Agreement dated as of July 15, 1990.  The Intercreditor Agreement has been amended twice, including in connection with the substitution of the Comerica Letter of Credit for the prior letter of credit issued by Wells Fargo Bank, N.A.  The Intercreditor Agreement, as amended, must now be further amended to provide for the substitution of the Union Bank Letter of Credit for the Comerica Letter of Credit; such amendment will be in substantially the form of the Third Amendment presented at this meeting (see Attachment).

The resolution presented for approval by the Authority at this meeting authorizes the Executive Director, Finance Director and Secretary to sign the Third Amendment and to take other actions necessary and appropriate to accomplish the substitution of the Union Bank Letter of Credit for the Comerica Letter of Credit and in furtherance of the administration of the Bonds generally.  The substitution of the Union Bank Letter of Credit for the Comerica Letter of Credit will be subject to receipt by the Trustee of confirmation that such substitution will not adversely affect the rating on the bonds and an opinion of Stradling Yocca Carlson & Rauth, Bond Counsel, that such substitution will not adversely affect the tax exempt status of the Bonds.

Fees and costs incurred in connection with the substitution of the Union Bank Letter of Credit for the Comerica Letter of Credit will be paid by the Owner.

Staff recommends that the Authority Board :

• Adopt the attached Resolution of the Garden Grove Housing Authority authorizing the execution of a Third Amendment to Intercreditor Agreement relating to the Substitution of a Letter of Credit for the Authority’s $12,000,000 Variable Rate Demand Multifamily Housing Revenue Bonds (Valley View Senior Villas Project), Series A of 1990 (The “Bonds”), and approving related actions.

KINGSLEY OKEREKE, Assistant Executive Director/Finance Director