OFFICIAL STATEMENT NEW ISSUE - BOOK-ENTRY ONLY NOT RATED

Transcription

1 OFFICIAL STATEMENT NEW ISSUE - BOOK-ENTRY ONLY NOT RATED In the opinion of Butler, Snow, O Mara, Stevens & Cannada, PLLC, Ridgeland, Mississippi ("Bond Counsel"), under existing laws, regulations, rulings and judicial decisions, interest on the Series 2010 Bonds (as hereinafter defined) is excludable from gross income for federal income tax purposes pursuant to Section 103 of the Code (as hereinafter defined), is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and is not taken into account in determining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 2010 Bonds is exempt from income taxation in the State of Mississippi. See "TAX MATTERS" herein and "APPENDIX E FORM OF BOND COUNSEL OPINION" attached hereto. $10,395,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION REFUNDING BONDS, SERIES 2010 (TUNICA COUNTY UTILITY DISTRICT LIMITED TAX REFUNDING PROJECT) Dated: Date of Delivery Due: As Shown on the Inside Front Cover The Mississippi Development Bank Special Obligation Refunding Bonds, Series 2010 (Tunica County Utility District Limited Tax Refunding Project) (the "Series 2010 Bonds") will be dated the date of delivery thereof, will bear interest from that date to the dates of their respective maturities in the amounts and at the rates set forth on the inside cover of this Official Statement and issued as fully registered bonds in denominations equal to $25,000 and any integral multiple of $5,000 in excess thereof. The Series 2010 Bonds, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Series 2010 Bonds. Purchases may be made only in book-entry form through the DTC Participants (as defined herein) and no physical delivery of the Series 2010 Bonds will be made to the Beneficial Owners (as defined herein), except as described herein. So long as Cede & Co. is the registered owner of the Series 2010 Bonds, as nominee of DTC, references herein to Bondholders (as defined herein) or registered owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners of the Series 2010 Bonds. See "BOOK-ENTRY ONLY SYSTEM" herein. Payments of principal, premium, if any, and interest will be made to Cede & Co., as long as Cede & Co. is the registered owner of the Bonds. Disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants, as more fully described herein. The principal of, premium, if any, and interest on the Series 2010 Bonds will be paid by Hancock Bank, Gulfport, Mississippi, as trustee (the "Trustee") under the Indenture (as defined herein), to Cede & Co., as long as Cede & Co. is the registered owner of the Series 2010 Bonds. Disbursement of such payments to the DTC Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants, as more fully described herein. Interest will be payable by the Trustee on June 1 and December 1 in each year, beginning June 1, 2011, to the registered owners of record as of the applicable record dates, as herein described, which payments shall, as long as the book-entry only system described herein is in place, be made to Cede & Co. The Series 2010 Bonds are being issued by the Mississippi Development Bank (the "Bank") under an Indenture of Trust, dated the date of delivery of the Series 2010 Bonds (the "Indenture"), by and between the Bank and the Trustee, to provide funds for a loan (the "Loan") from the Bank to the Tunica County Utility District (formerly known as the Robinsonville Commerce Utility District) (the "District") and Tunica County, Mississippi (the "County"), to provide for (i) the current refunding of the outstanding principal of the Bank s $16,575,000 Mississippi Development Bank Special Obligation Taxable Water and Sewer Bonds, Series 1998 (Robinsonville-Commerce Utility District Project) (the "Series 1998 Bonds"), dated as of December 1, 1998a; (ii) funding a debt service reserve fund for the Series 2010 Bonds; and (iii) paying the costs of issuance of the Series 2010 Bonds and the Note (as defined herein) (collectively, the "Project"). The Series 2010 Bonds are subject to mandatory redemption prior to maturity as more fully described herein. The Series 2010 Bonds are not subject to optional redemption prior to maturity. The Series 2010 Bonds are being offered as "qualified tax exempt obligations" within the meaning of Sections 265(b)(3)(C) and (G) of the Internal Revenue Code of 1986, as amended and supplemented from time to time. The Series 2010 Bonds are payable solely out of the revenues and funds of the Bank pledged therefor under the Indenture, as more fully described herein. The Series 2010 Bonds do not constitute a debt, liability or loan of the credit of the State of Mississippi (the "State") or any political subdivision thereof under the constitution and laws of the State or a pledge of the faith, credit and taxing power of the State or any political subdivision thereof. The sources of payment of, and security for, the Series 2010 Bonds are more fully described herein. The Bank has no taxing power. Proceeds of the Series 2010 Bonds shall be loaned by the Bank to the District and the County under the terms of a Loan Agreement, dated the date of delivery of the Series 2010 Bonds (the "Loan Agreement"), among the Bank, the District and the County. The Series 2010 Bonds shall be secured by the assignment to the Trustee of a Promissory Note (Tunica County Utility District Limited Tax Refunding Project) of the District (the "Note") as provided in the Indenture. The Note will be a special obligation of the District payable solely from the Special Tax Revenues (as defined herein). The principal of, premium, if any, and interest on the Note and certain other amounts that all represent Basic Payments (as defined herein) under the Loan Agreement shall be payable by the District solely from the Special Tax Revenues. The Series 2010 Bonds are offered subject to the final approval of the legality thereof by Butler, Snow, O Mara, Stevens & Cannada, PLLC, Ridgeland, Mississippi, Bond Counsel. Certain legal matters will be passed upon for the Bank by Balch & Bingham, LLP, Jackson, Mississippi, for the District and the County by the Dulaney Law Firm, LLP, Tunica, Mississippi and for the Underwriter by Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, Mississippi. Government Consultants, Inc., Jackson, Mississippi, serves as the financial advisor to the Bank in connection with the sale and issuance of the Series 2010 Bonds. It is expected that delivery of the Series 2010 Bonds in definitive form will be made in Jackson, Mississippi, on or about December 28, Dated December 21, 2010.

2 $10,395,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION REFUNDING BONDS, SERIES 2010 (TUNICA COUNTY UTILITY DISTRICT LIMITED TAX REFUNDING PROJECT) MATURITY SCHEDULE $10,395, % Term Bonds due December 1, 2018, Yield 4.500%, Priced at %, CUSIP RH69 1 The CUSIP number listed above is being provided solely for the convenience of the holders of the Series 2010 Bonds only, and the Bank and the Underwriter does not make any representation with respect to such CUSIP number or undertake any responsibility for its accuracy. The CUSIP number is subject to being changed after the issuance of the Series 2010 Bonds as a result of various subsequent actions, including but not limited to a refunding in whole or in part of the Series 2010 Bonds.

3 THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFERING OF ANY SECURITY OTHER THAN THE ORIGINAL OFFERING OF THE SERIES 2010 BONDS IDENTIFIED ON THE COVER HEREOF. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THAT CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, AND THERE SHALL NOT BE ANY SALE OF THE SERIES 2010 BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION AND EXPRESSION OF OPINIONS HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR THE SALE OF ANY OF THE SERIES 2010 BONDS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. INFORMATION HEREIN HAS BEEN OBTAINED FROM THE BANK, THE DISTRICT, THE COUNTY, THE COMPANY (AS DEFINED HEREIN) AND OTHER SOURCES BELIEVED TO BE RELIABLE, BUT THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION IS NOT GUARANTEED BY THE UNDERWRITER. UPON ISSUANCE, THE SERIES 2010 BONDS WILL NOT BE REGISTERED BY THE BANK UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND WILL NOT BE LISTED ON ANY STOCK OR OTHER SECURITIES EXCHANGE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL, STATE OR OTHER GOVERNMENTAL ENTITY OR AGENCY, OTHER THAN THE BANK AND THE DISTRICT (TO THE EXTENT DESCRIBED HEREIN), WILL HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEMENT OR APPROVED THE SERIES 2010 BONDS FOR SALE. THIS OFFICIAL STATEMENT IS NOT TO BE CONSTRUED AS A CONTRACT OR AGREEMENT BETWEEN THE BANK AND THE PURCHASERS OR HOLDERS OF THE SERIES 2010 BONDS. ALL ESTIMATES AND ASSUMPTIONS CONTAINED HEREIN ARE BELIEVED TO BE REASONABLE, BUT NO REPRESENTATION IS MADE THAT SUCH ESTIMATES OR ASSUMPTIONS ARE CORRECT OR WILL BE REALIZED. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2010 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THIS OFFICIAL STATEMENT CONTAINS FORECASTS, PROJECTIONS AND ESTIMATES THAT ARE BASED ON EXPECTATIONS AND ASSUMPTIONS WHICH EXISTED AT THE TIME SUCH FORECASTS, PROJECTIONS AND ESTIMATES WERE PREPARED. IN LIGHT OF THE IMPORTANT FACTORS THAT MAY MATERIALLY AFFECT ECONOMIC CONDITIONS IN THE STATE, THE COUNTY AND THE DISTRICT, THE INCLUSION IN THIS OFFICIAL STATEMENT OF SUCH FORECASTS, PROJECTIONS AND ESTIMATES SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE BANK, THE COUNTY, THE DISTRICT OR THE UNDERWRITER THAT SUCH FORECASTS, PROJECTIONS AND ESTIMATES WILL OCCUR. SUCH FORECASTS, PROJECTIONS AND ESTIMATES ARE NOT INTENDED AS REPRESENTATIONS OF FACT OR GUARANTEES OF RESULTS. IF AND WHEN INCLUDED IN THIS OFFICIAL STATEMENT, THE WORDS "EXPECTS," "FORECASTS," "PROJECTS," "INTENDS," "ANTICIPATES, "ESTIMATES" AND ANALOGOUS EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS AND ANY SUCH STATEMENTS INHERENTLY ARE SUBJECT TO A VARIETY OF RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. SUCH RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN POLITICAL, SOCIAL AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, LITIGATION AND VARIOUS OTHER EVENTS, CONDITIONS AND

4 CIRCUMSTANCES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE BANK, THE COUNTY AND THE DISTRICT. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS OFFICIAL STATEMENT. THE BANK DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO RELEASE PUBLICLY ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN TO REFLECT ANY CHANGE IN THE BANK'S EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. THE UNDERWRITER HAS PROVIDED THE FOLLOWING SENTENCE FOR INCLUSION IN THIS OFFICIAL STATEMENT: THE UNDERWRITER HAS REVIEWED THE INFORMATION IN THIS OFFICIAL STATEMENT IN ACCORDANCE WITH, AND AS PART OF, ITS RESPONSIBILITIES TO INVESTORS UNDER THE FEDERAL SECURITIES LAWS AS APPLIED TO THE FACTS AND CIRCUMSTANCES OF THIS TRANSACTION, BUT THE UNDERWRITER DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.

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6 TABLE OF CONTENTS INTRODUCTION... 1 The Bank... 1 Sources of Payment and Security for the Series 2010 Bonds... 1 Purpose of the Series 2010 Bonds... 3 Authority for Issuance... 3 Description of the Series 2010 Bonds... 3 Tax Exemption... 4 Professionals Involved in the Offering... 4 Offering and Delivery of the Series 2010 Bonds... 4 Risks to the Bondholders... 4 Other Information... 4 Format of Official Statement... 5 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2010 BONDS... 5 The Loan Agreement and the Note... 5 Provisions for Payment of the Note Payments... 6 Debt Service Reserve Fund... 7 BOOK-ENTRY ONLY SYSTEM... 7 THE DISTRICT History, Organization, Purpose and Powers Management and Operations The District's Service Area Procedure for Special Assessments Procedure for Property Assessments in the County Procedure for Special Tax Levy Procedure for Tax Collections Special Assessment Taxpayer of the District; True Value and Assessed Value of Property Subject to Special Assessments in the District Other Indebtedness of the District Operating Revenues of the District Major Taxpayers in the District THE COMPANY Introduction Harrah's Tunica Caesars Entertainment Corporation RISKS TO THE OWNERS OF THE SERIES 2010 BONDS DESCRIPTION OF THE SERIES 2010 BONDS General Description Redemption Redemption at the Election or Direction of the Bank Selection of Series 2010 Bonds to be Redeemed Redemption Payments Notice of Redemption SOURCES AND USES OF FUNDS DEBT SERVICE REQUIREMENTS THE MISSISSIPPI DEVELOPMENT BANK General Organization and Membership of the Bank Prior Bonds of Bank i

7 REVENUES, FUNDS AND ACCOUNTS UNDER THE INDENTURE Creation of Funds and Accounts Deposit of Net Proceeds of the Series 2010 Bonds, Revenues and Other Receipts OPERATION OF FUNDS AND ACCOUNTS UNDER THE INDENTURE General Fund Debt Service Reserve Fund Special Reserve Fund Rebate Fund Amounts Remaining in Funds Investment of Funds EVENTS OF DEFAULT UNDER THE INDENTURE; REMEDIES Events of Default Under the Indenture Remedies Under the Indenture THE LOAN AGREEMENT AND THE NOTE General Provisions for Payment of the Note The Loan Basic Payments Under the Loan Agreement Pledge of Special Tax Revenues Under the Loan Agreement Additional Charges Under the Loan Agreement District's Obligations Unconditional Assignment of Bank's Rights Covenant for the Benefit of the Trustee and the Bondholders Tax Covenants Prepayment of the Note and Termination of the Loan Agreement Direction of Investments Events of Default THE SERIES 2010 BONDS AS LEGAL INVESTMENTS LITIGATION TAX MATTERS Treatment of Original Issue Discount LEGAL MATTERS CONTINUING DISCLOSURE FINANCIAL ADVISOR UNDERWRITING VALIDATION MISCELLANEOUS APPENDIX A District's Audited Financial Statements for Fiscal Years and Budgets for Fiscal Years 2010 and 2011 APPENDIX B Certain Economic and Demographic Information About the County APPENDIX C Form of Indenture APPENDIX D Form of Loan Agreement APPENDIX E Form of Bond Counsel Opinion APPENDIX F Form of Continuing Disclosure Agreement ii

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9 OFFICIAL STATEMENT $10,395,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION REFUNDING BONDS, SERIES 2010 (TUNICA COUNTY UTILITY DISTRICT LIMITED TAX REFUNDING PROJECT) INTRODUCTION The purpose of this Official Statement, including its Appendices, is to set forth certain information concerning the issuance and sale by the Mississippi Development Bank (the "Bank") of its Mississippi Development Bank Special Obligation Refunding Bonds, Series 2010 (Tunica County Utility District Limited Tax Refunding Project) (the "Series 2010 Bonds") issued in the aggregate principal amount of $10,395,000. This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and all appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Series 2010 Bonds to potential investors is made only by means of the entire Official Statement. The Bank The Bank was established in 1986 as a separate body corporate and politic of the State of Mississippi (the "State") for the public purposes set forth under the provisions of Section et seq., Mississippi Code of 1972, as amended and supplemented from time to time (the "Bank Act"). The Bank is not an agency of the State, is separate from the State in its corporate and sovereign capacity and has no taxing power. The Bank is governed by a nine member Board of Directors (the "Board of Directors"). See "THE MISSISSIPPI DEVELOPMENT BANK" herein. Pursuant to the Bank Act, the purpose of the Bank is to assist "local governmental units," as defined in the Bank Act to be any county, municipality, utility district, regional solid waste authority, county cooperative service district, political subdivision, or other governmental unit created under State law, through programs of providing loans to such local governmental units under loan agreements between such local governmental units and the Bank. The Tunica County Utility District (formerly known at the Robinsonville-Commerce Utility District) (the "District") is such a local governmental unit. Sources of Payment and Security for the Series 2010 Bonds The Series 2010 Bonds will be issued under and secured by an Indenture of Trust, dated the day of delivery of the Series 2010 Bonds (the "Indenture"), between the Bank and Hancock Bank, Gulfport, Mississippi, as Trustee (the "Trustee"). The principal of, redemption premium, if any, and interest on any and all of the Series 2010 Bonds, together with any refunding bonds (the "Refunding Bonds") that may be authorized and issued by the Bank under the Indenture on a parity with the Series 2010 Bonds (collectively, the "Bonds"), are payable from those revenues and funds of the Bank which, together with the Loan Agreement (as described herein) and the Note delivered by the District to the Bank (as described herein), are pledged pursuant to the Indenture for the benefit of the owners of the Bonds without priority. The faith, credit and taxing power of the State are not pledged to the payment of the principal of, premium, if any, and interest on any of the Bonds. The Bonds are not a debt, liability, loan of the credit or pledge of the faith and credit of the State or of any political subdivision thereof, including the County and the District. The Bank has no taxing power and has only those powers and sources of revenue set forth in the Bank Act. The Series 2010 Bonds are issued and secured separately from any other obligations issued by the Bank. The Series 2010 Bonds are secured by the pledge of the Trust Estate established under the Indenture (the "Trust Estate"), defined to be (i) all cash and securities in the funds and accounts established by the Indenture (except the Rebate Fund, as described herein) (the "Funds" and "Accounts") and the investment earnings thereon and all proceeds thereof, (ii) the Loan Agreement (the "Loan

10 Agreement"), by and between the Bank, Tunica County, Mississippi (the "County") and the District and the $10,395,000 Promissory Note (Tunica County Utility District Limited Tax Refunding Project) issued by the District to the Bank (the "Note") and payments due thereunder and the earnings thereon and the proceeds thereof, and (iii) the Special Tax Revenues. The Special Tax Revenues are the Special Assessment Revenues and the Special Tax Levy Revenues (as described below). All Bonds will be secured equally and ratably by all of the foregoing. The sources of payment for the Series 2010 Bonds are further described under the caption "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2010 BONDS," and "APPENDIX C - FORM OF INDENTURE OF TRUST". Pursuant to the terms of the Loan Agreement, the principal of and interest on the Note and other amounts due under the Loan Agreement shall be payable solely from the Special Tax Revenues. Under the Loan Agreement, Special Tax Revenues are defined to mean the Special Assessment Revenues and the Special Tax Levy Revenues. Special Assessment Revenues mean the revenues derived from special assessments authorized by resolutions of the District dated October 15, 1998 and November 13, 1998 and levied yearly each September by the District to provide for the payment of the District s bonds and/or refunding of such bonds pursuant to Sections 12, 14, 15 and 16 of the District Act (as defined herein). Special Tax Levy Revenues mean the avails of the Special Tax Levy that is a special ad valorem tax not to exceed five mills per annum levied by the County, at the request of the District in accordance with Section 14(2) of the District Act, on all taxable property within the geographical limits of the District in an amount sufficient to provide, together with any other moneys available for such purpose, for the payment of the Note. The District encompasses all areas of the County except the Town of Tunica, Mississippi (the "Town), the area within one mile of the Town and the area certificated to the KWP Utility System, such area of the District being equal to approximately 95% of the County s square footage. As of 2010, the District has an assessed valuation of $235,000,000, approximately 94% of the County s $250,000,000 assessed valuation. For more information about the County, see "APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ABOUT THE COUNTY." The sources of payment for the Note are further described under the section "THE LOAN AGREEMENT AND THE NOTE" and "APPENDIX D - FORM OF LOAN AGREEMENT." The Bank issued the $16,575,000 Mississippi Development Bank Special Obligation Taxable Water and Sewer Bonds, Series 1998 (Robinsonville-Commerce Utility District Project), dated December 1, 1998 and currently outstanding in the principal amount of $10,085,000 (the "Series 1998 Bonds"). The Series 1998 Bonds were issued pursuant to the Bank Act and Chapter 958, Local and Private Laws of Mississippi, Regular Session 1996, as amended by Chapter 917, Local and Private Laws of Mississippi, Regular Session 1997, as amended by Chapter 986, Local and Private Laws of Mississippi, Regular Session 1998, and as amended by Chapter 1028, Local and Private Laws of Mississippi, Regular Session 1999 (collectively, the "District Act"). A portion of the proceeds of the Series 2010 Bonds will be used, together with certain other moneys, for the current refunding and redemption of the outstanding Series 1998 Bonds. The Series 1998 Bonds were issued on December 17, 1998 to provide funds for (a) the construction, acquisition, reconstruction, improvement, betterment and extension of the District's water and sewer facilities and the acquisition of land therefor (the "Series 1998 Project), (b) paying costs of issuance of the Series 1998 Bonds, (c) funding a debt service reserve fund and (d) paying capitalized interest on the Series 1998 Bonds. As of the date of this Official Statement, the Series 1998 Bonds are the only outstanding bonds of the District that are payable from Special Assessment Revenues. When the Series 2010 Bonds and the Note are issued, the Note will be secured by the same special assessments and the same special ad valorem tax levies (if any) that secured the Series 1998 Bonds, except that the amount of such special assessments and special ad valorem tax levies (if any) will be adjusted to produce sufficient Special Tax Revenues to pay the principal of and interest on the Series 2010 Bonds. The only taxpayer in the District at present that is subject to the special assessments levied by the District is BL Development Corp. (the "Company"), a Minnesota Corporation. The Company is a wholly-owned subsidiary of Grand Casinos, Inc. Grand Casinos, Inc. is a wholly-owned subsidiary of Caesars Entertainment Operating Company, Inc. (formerly Harrah's Operating Company, Inc.), which in 2

11 turn is a wholly-owned subsidiary of Caesars Entertainment Corporation (formerly Harrah's Entertainment, Inc.) ("Caesars"). Except through (1) special assessments levied by the District on certain property in the District for the payment of the Series 2010 Bonds and (2) any special ad valorem taxes levied by the County at the request of the District for the payment of the Note, the Company has no obligation to make any payments on the Series 2010 Bonds or the Note. The special ad valorem taxes that may be levied by the County at the request of the District cover the entire geographic area of the District which is comprised of approximately 95% of the County's square footage. For further discussion of the District, see heading "THE DISTRICT" herein. For further discussion of the Company and Caesars, see the heading "THE COMPANY" herein. For further information about the County, see "APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ABOUT THE COUNTY." The Indenture provides that in order to further secure the payment of principal of and interest on the Series 2010 Bonds, the Bank will establish thereunder a debt service reserve fund (the "Debt Service Reserve Fund") and maintain therein an amount (the "Debt Service Reserve Requirement") equal to the lesser of the following: (i) the maximum amount of principal and interest becoming due in the current or any future bond year (meaning each one year period beginning on December 2 of one year and ending on December 1 of the following year) on all Series 2010 Bonds then outstanding; (ii) 125% of average annual debt service on the Series 2010 Bonds; and (iii) 10% of the stated principal amount of the Series 2010 Bonds. On the date of the delivery of the Series 2010 Bonds, a portion of the moneys on deposit in the debt service reserve fund for the Series 1998 Bonds shall be deposited to the credit of the Debt Service Reserve Fund to fund the Debt Service Reserve Requirement. See the caption "SECURITY AND SOURCES OF PAYMENT FOR THE Series 2010 Bonds - Debt Service Reserve Fund" for further discussion of the Debt Service Reserve Fund. Purpose of the Series 2010 Bonds The Series 2010 Bonds are being issued to provide funds to loan to the District under the Loan Agreement secured by the Note to provide for (i) the current refunding of the outstanding principal of the Series 1998 Bonds; (ii) funding the Debt Service Reserve Fund; and (iii) paying the costs of issuance of the Series 2010 Bonds and the Note (collectively, the "Project"). Authority for Issuance The Series 2010 Bonds are issued pursuant to the provisions of the Bank Act, Section et seq. of the Mississippi Code of 1972, as amended and supplemented from time to time, Section et seq. of the Mississippi Code of 1972, as amended and supplemented from time to time, and the District Act (collectively, the "Act") and the Indenture. Description of the Series 2010 Bonds Payments. Interest on the Series 2010 Bonds is payable on June 1 and December 1 of each year, commencing June 1, Payments of the principal of, premium, if any, and interest on the Series 2010 Bonds will be made directly to DTC by the Trustee. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of the DTC Participants and the Indirect Participants. See "BOOK-ENTRY ONLY SYSTEM" in this Official Statement. Redemption. The Series 2010 Bonds are not subject to optional redemption prior to maturity but are subject to mandatory redemption, all as described herein under the heading "DESCRIPTION OF THE SERIES 2010 BONDS -- Redemption." Registration, Transfers, and Exchanges. The Series 2010 Bonds will be issued only as fully registered bonds, in denominations of $25,000 or any integral multiple of $5,000 in excess thereof. The Series 2010 Bonds, when issued, will be registered in the name of Cede & Co., as nominee for DTC. DTC will act as securities depository for the Series 2010 Bonds. In the event that the Book-Entry Only System, as described herein under the heading "BOOK-ENTRY ONLY SYSTEM -- General," is 3

12 discontinued, the provisions for registration of the Series 2010 Bonds under "BOOK-ENTRY ONLY SYSTEM -- Discontinuance of Book Entry Only System" would apply. For a more complete description of the Series 2010 Bonds and the basic documentation pursuant to which the Series 2010 Bonds are being issued, see the captions "DESCRIPTION OF THE SERIES 2010 BONDS," "REVENUES, FUNDS AND ACCOUNTS UNDER THE INDENTURE," and "OPERATION OF FUNDS AND ACCOUNTS UNDER THE INDENTURE," in this Official Statement. Tax Exemption In the opinion of Bond Counsel, under existing laws, regulations, rulings, and judicial decisions, interest on the Series 2010 Bonds is excludable from gross income for federal tax purposes, with such exclusion conditioned upon continuing compliance with certain tax covenants of the Bank and the District, and under existing laws, regulations, rulings, and judicial decisions, interest on the Series 2010 Bonds is exempt from income taxation in the State. Interest on the Series 2010 Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes and is not included in adjusted current earnings in calculating corporate alternative minimum taxable income. For a more complete description of such opinion and certain other tax consequences incident to the ownership of the Series 2010 Bonds, see the captions "TAX MATTERS" in this Official Statement. See "APPENDIX E - FORM OF BOND COUNSEL OPINION" for the proposed form of bond counsel opinion. Professionals Involved in the Offering Hancock Bank, Gulfport, Mississippi, will act as Trustee under the Indenture for the Series 2010 Bonds. Government Consultants, Inc., Jackson, Mississippi, is employed as financial advisor (the "Financial Advisor") to the Bank with respect to the Series 2010 Bonds. Certain legal matters will be passed upon for the Bank by Balch & Bingham, LLP, Jackson, Mississippi, for the District and the County by the Dulaney Law Firm, LLP, Tunica, Mississippi and for the Underwriter by Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Jackson, Mississippi. Certain proceedings in connection with the issuance of the Series 2010 Bonds are subject to the approval of Butler, Snow, O'Mara, Stevens & Cannada, PLLC, Ridgeland, Mississippi, ("Bond Counsel"). See the caption "LEGAL MATTERS" and "MISCELLANEOUS" in this Official Statement. Offering and Delivery of the Series 2010 Bonds The Series 2010 Bonds are being offered when, as and if issued and received by the Underwriter, and are subject to the final approval of Bond Counsel. The Series 2010 Bonds are expected to be available in definitive form for delivery on or about December 28, Risks to the Bondholders There are certain risks involved in the ownership of the Series 2010 Bonds that should be considered by prospective purchasers. The ability of the Bank to pay principal of, redemption premium, if any, and interest on the Series 2010 Bonds depends primarily upon the receipt by the Bank of note payments (the "Note Payments") from the District, which is obligated to make such payments to the Bank, together with investment earnings on certain amounts in the Funds and Accounts established under the Indenture. There can be no representation or assurance that the District will realize sufficient revenues to make the required Note Payments. See the caption, "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2010 BONDS." Failure of the Bank, the District and/or the County to comply with certain tax covenants may adversely affect the exempt status of the interest on all of the Series 2010 Bonds. See the caption "RISKS TO THE OWNERS OF THE SERIES 2010 BONDS" in this Official Statement. Other Information This Official Statement speaks only as of its date, and certain information contained herein is subject to change. 4

13 Copies of other documents and information are available upon request from Duncan-Williams, Inc., 6750 Poplar Avenue, Suite 300, Memphis, Tennessee 38138, (901) Format of Official Statement There follows in this Official Statement a description of the security and sources of payment for the Series 2010 Bonds, the Bank, and summaries of certain provisions of the Series 2010 Bonds, the Indenture, the Loan Agreement and certain provisions of the Act. All discussions of the Act, the Indenture and the Loan Agreement are qualified in their entirety by reference to the Act, copies of which are available from the Bank, and the Indenture and the Loan Agreement, the forms of which are set forth in "APPENDIX C - FORM OF INDENTURE" and "APPENDIX D - FORM OF LOAN AGREEMENT" hereto and all discussions of the Series 2010 Bonds are qualified in their entirety by reference to the definitive form and the information with respect to the Series 2010 Bonds contained in the Indenture. Certain financial information relating to the District is set forth in "APPENDIX A DISTRICT'S AUDITED FINANCIAL STATEMENTS FOR FISCAL Years AND BUDGETS for FISCAL Years 2010 and 2011", certain information about the County is set forth in "APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ABOUT THE COUNTY", the form of the Indenture is set forth in "APPENDIX C - FORM OF INDENTURE OF TRUST," the form of the Loan Agreement is set forth in "APPENDIX D - FORM OF LOAN AGREEMENT," the proposed form of opinion of Bond Counsel with respect to the Series 2010 Bonds is set forth in "APPENDIX E - FORM OF BOND COUNSEL OPINION" and the proposed form of the Continuing Disclosure Agreement is set forth in "APPENDIX F - FORM OF CONTINUING DISCLOSURE AGREEMENT". Each of the Appendices to this Official Statement is an integral part of this Official Statement and should be read in its entirety by any and all owners or prospective owners of the Series 2010 Bonds. Capitalized terms not defined herein shall have the definitions set forth in "APPENDIX C - FORM OF INDENTURE" and "APPENDIX D - FORM OF LOAN AGREEMENT". SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2010 BONDS The Series 2010 Bonds are payable only out of the Trust Estate. The Indenture creates a continuing pledge of and lien upon the Trust Estate to secure the full and final payment of the principal of, premium, if any, and interest on all of the Series 2010 Bonds. The Series 2010 Bonds do not constitute a debt, liability or loan of the credit of the State or any political subdivision thereof under the constitution of the State or a pledge of the faith, credit and taxing power of the State or any political subdivision thereof including the County and the District. The Bank has no taxing power. The sources of payment of, and security for, the Series 2010 Bonds are more fully described below. Under the Indenture, the Series 2010 Bonds are secured by the assignment to the Trustee of the Note and all Note Payments, as described herein. In addition, the Indenture pledges as security for the payment of the Series 2010 Bonds all proceeds of the Trust Estate, including without limitation all cash and securities held in the Funds and Accounts created by the Indenture, except for the Rebate Fund, together with investment earnings thereon and proceeds thereof (except to the extent transferred to the Rebate Fund), and all other funds, accounts and moneys hereinafter to be pledged by the Bank to the Trustee as security under the Indenture, to the extent of any such pledge. The Loan Agreement and the Note From the proceeds of the Series 2010 Bonds, the Bank intends to loan moneys to the District under the Loan Agreement to be secured by the Note and will assign to the Trustee under the Indenture, the Loan Agreement and the Note, all as described in "THE LOAN AGREEMENT AND THE NOTE" herein and in "APPENDIX C - FORM OF LOAN AGREEMENT" attached hereto. 5

14 Provisions for Payment of the Note Payments The Note will be a special obligation of the District payable solely from the moneys, rights and interests pledged under the Loan Agreement as set forth in the immediately succeeding paragraph. The Note will never constitute a general obligation of the District or, within the meaning of any constitutional or statutory limitation, a debt, liability, or obligation of the State or any political subdivision of the State other than the District, and neither the full faith and credit nor taxing power of the State or any political subdivision thereof, including the County and the District, is pledged to the payment of such principal, premium, if any, and interest on the Note other than as set forth herein. Pursuant to the terms of the Loan Agreement, the principal of and interest on the Note and other amounts due under the Loan Agreement shall be payable solely from the Special Tax Revenues. Such an amount of the Special Tax Revenues as will provide for the payments due under the Note and the Loan Agreement, as the same shall be come due, has been irrevocably pledged to said purpose. Under the Loan Agreement, Special Tax Revenues are defined to mean Special Assessment Revenues and Special Tax Levy Revenues. Special Assessment Revenues mean the revenues derived from special assessments authorized by resolutions of the District dated October 15, 1998 and November 13, 1998 (the "Special Assessment Resolutions") and levied yearly each September by the District to provide for the payment of the District s bonds and/or refunding of such bonds pursuant to Sections 12, 14, 15 and 16 of the District Act. Special Tax Levy Revenues mean the avails of a special ad valorem tax not to exceed five mills per annum levied by the County, at the request of the District in accordance with Section 14(2) of the District Act, on all taxable property within the geographical limits of the District in an amount sufficient to provide, together with any other moneys available for such purpose, for the payment of the Note (the "Special Tax Levy"). The District encompasses all areas of the County except the Town of Tunica, Mississippi (the "Town), the area within one mile of the Town and the area certificated to the KWP Utility System, such area of the District being equal to approximately 95% of the County s square footage. As of 2010, the District has an assessed valuation of $235,000,000, approximately 94% of the County s $250,000,000 assessed valuation. For more information about the County, see "APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ABOUT THE COUNTY." As provided in the Loan Agreement, the District has agreed to take all steps, actions and proceedings required on its part for the imposition, levy and collection of (1) the special assessments of the District made pursuant to the Special Assessment Resolutions and (2) the special ad valorem taxes, if needed, to be levied by the County for the payment of the Note. For further discussion of procedures to levy the special assessments and procedures to levy the Special Tax Levy, see the headings, "THE DISTRICT - Procedure for Special Assessments" and "THE DISTRICT - Procedure for Special Tax Levy." The District is located in the County. The District s service area includes the entire County with various small exceptions, the primary exceptions being the Town of Tunica and the area within one mile of the Town of Tunica, and the area certificated to the KWP Utility System. The Company is the only taxpayer in the District that is currently subject to the special assessments levied by the District. All property in the District is subject to the Special Tax Levy, if applicable. The Company is a wholly-owned subsidiary of Grand Casinos, Inc. Grand Casinos, Inc. is a wholly-owned subsidiary of Caesars Entertainment Operating Company, Inc., which in turn is a wholly-owned subsidiary of Caesars. For further information about the Company and Caesars, see the heading, "THE COMPANY" herein. Except through (1) special assessments levied by the District on certain property in the District for the payment of the Series 2010 Bonds and (2) any special ad valorem taxes levied by the County at the request of the District for payment of the Note, the Company has no obligation to make any payments on the Series 2010 Bonds. The special ad valorem taxes that may be levied by the County at the request of the District cover the entire geographic area of the District which is comprised of approximately 95% of the County's square footage. As of 2010, the District has an assessed valuation of $235,000,000, approximately 94% of the County s $250,000,000 assessed valuation. For more information about the County, see "APPENDIX B CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION ABOUT THE COUNTY." As set forth in the Loan Agreement, the Note shall be a special obligation of the District payable solely from the Special Tax Revenues. The Note does not constitute a debt or liability of the County except to the extent provided in the Loan Agreement, which shall be payable solely from the funds 6

15 pledged therefor in accordance with the Loan Agreement. The issuance of the Note under the provisions of the Act does not directly, indirectly, or contingently, obligate the County to levy any form of taxation for the payment thereof or to make any appropriation for its payment, except to the extent provided in the Loan Agreement. The District has agreed to take all steps, actions and proceedings required on its part for the imposition, levy and collection of (1) the special assessments of the District made pursuant to the Special Assessment Resolutions and (2) the special ad valorem taxes, if needed, to be levied by the County for the payment of the Note, all as provided in the Loan Agreement. Such special assessments for the payment of debt service on the Series 1998 Bonds were made against the real property owned by the Company within the District pursuant to resolutions adopted by the Board of Commissioners of the District on October 15, 1998 and November 13, Such special assessments will now be used to pay debt service on the Series 2010 Bonds. The execution and delivery of the Loan Agreement and the Note shall be authorized by a resolution of the District adopted pursuant to the Act. The Note shall be titled "$10,395,000 Promissory Note (Tunica County Utility District Limited Tax Refunding Project"). See "APPENDIX D - FORM OF THE LOAN AGREEMENT" for further description of the Loan Agreement and the Note. Debt Service Reserve Fund The Act authorizes and the Indenture requires the Bank to establish and maintain the Debt Service Reserve Fund in which there is to be deposited or transferred: (i) All proceeds of the Series 2010 Bonds required to be deposited in the Debt Service Reserve Fund by the terms of the Indenture; (ii) All money required to be transferred to the Debt Service Reserve Fund from another Fund or Account under the Indenture; (iii) All money paid by the District for deposit to the Debt Service Reserve Fund as provided in the Loan Agreement; and (iv) Any other available money or funds that the Bank may decide to deposit in the Debt Service Reserve Fund. Except as provided by the Indenture, moneys in the Debt Service Reserve Fund will be held and applied to the payment of the principal of and interest on the Series 2010 Bonds in cases where sufficient funds are not available in other Funds and Accounts for such payments. For further discussion of the Debt Service Reserve Fund and the Debt Service Reserve Requirement, see the heading, "OPERATION OF FUNDS AND ACCOUNTS UNDER THE INDENTURE - Debt Service Reserve Fund." BOOK-ENTRY ONLY SYSTEM The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Series 2010 Bonds. The Series 2010 Bonds will be initially issued as fully registered bonds registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by the authorized representative of DTC. One fully-registered certificate for each maturity of the Series 2010 Bonds will be issued for the Series 2010 Bonds in the aggregate principal amount of each such maturity and will be deposited with DTC. DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York, Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non U.S. equity issues, corporate and municipal debt issues, and money market instrument 7

16 from over 100 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions, in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation, ("NSCC", "FICC", and "EMCC", also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Series 2010 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for such Series 2010 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2010 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' (together, the "DTC Participants") records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2010 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2010 Bonds, except in the event that use of the book-entry system for the Series 2010 Bonds is discontinued. To facilitate subsequent transfers, all Series 2010 Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2010 Bonds with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in Beneficial Ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2010 Bonds. DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2010 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices are to be sent to DTC. If less than all of the Series 2010 Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such Series 2010 Bonds to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Series 2010 Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an "Omnibus Proxy" to the Trustee as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Series 2010 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, principal payments and interest payments on the Series 2010 Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and 8