$1,247,000,000 Commonwealth of Pennsylvania General ...

NEW ISSUE ? BOOK-ENTRY ONLY

Ratings:

Fitch: AA-

Moody's: Aa3

Standard & Poor's: A+

(See "Ratings" herein)

AGM (Insured Bonds): Kroll:

Moody's: Standard & Poor's: (See "Bond Insurance" and "Ratings" herein)

AA+ A2 AA

In the opinion of Co-Bond Counsel, under existing law, interest on the Bonds (as defined herein) is excludable from gross income for purposes of federal income tax, assuming continuing compliance with the requirements of federal tax law, subject to the conditions described in "TAX EXEMPTION AND OTHER MATTERS" herein. Interest on the Bonds is not a preference item for purposes of the individual federal alternative minimum tax; however, interest paid to certain corporate holders of the Bonds indirectly may be subject to alternative minimum tax under circumstances described in "TAX EXEMPTION AND OTHER MATTERS" herein. The Bonds are exempt from personal property taxes in Pennsylvania and the interest on the Bonds is exempt from Pennsylvania personal income tax and Pennsylvania corporate net income tax under the laws of the Commonwealth of Pennsylvania as enacted and construed on the date of initial delivery of the Bonds. See "TAX EXEMPTION AND OTHER MATTERS" herein.

$1,247,000,000 Commonwealth of Pennsylvania

General Obligation Bonds,

First Series of 2018

Dated: Date of Issuance and Delivery

Due: As shown on the inside front cover

This Official Statement relates to the issuance by the Commonwealth of Pennsylvania (the "Commonwealth") of $1,247,000,000 in aggregate principal amount of its General Obligation Bonds, First Series of 2018 (the "Bonds"). The Bonds are being issued to provide funds for and toward the costs of various capital facilities projects and other projects to carry out the purposes of the Growing Greener II and Pennvest Acts (each as defined herein) and to pay all or a portion of the costs of issuance of the Bonds. See "ESTIMATED USE OF PROCEEDS" herein.

The Bonds will be issued only in book-entry only form and initially registered in the name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the Bonds. Interest on the Bonds will be payable semi-annually on March 1 and September 1, commencing September 1, 2018. Manufacturers and Traders Trust Company, a New York banking corporation, Harrisburg, Pennsylvania, is the Loan and Transfer Agent for the Bonds. Principal of and interest and redemption premium, if any, on the Bonds are payable to Cede & Co. See "THE BONDS ? Book-Entry Only System" and Appendix D "INFORMATION REGARDING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM."

The Bonds are subject to redemption prior to maturity as set forth herein. See "THE BONDS ? Redemption."

The Bonds are direct and general obligations of the Commonwealth and the full faith and credit of the Commonwealth are pledged for the payment of principal of and interest on the Bonds. See "SECURITY AND SOURCE OF PAYMENT FOR BONDS."

The scheduled payment of principal of and interest on the Bonds maturing on March 1 of the years 2033, 2034 and 2039 (the "Insured Bonds") when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Insured Bond by ASSURED GUARANTY MUNICIPAL CORP.

This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision regarding the Bonds.

The Bonds are offered when, as and if issued, and are subject to the receipt of the legal opinions of the Attorney General of the Commonwealth and, Ballard Spahr LLP and Turner Law, P.C., Co-Bond Counsel, both of Philadelphia, Pennsylvania. Certain legal matters will be passed upon for the Commonwealth by Greenberg Traurig, LLP and Andre C. Dasent, P.C., both of Philadelphia, Pennsylvania, serving as Co-Disclosure Counsel to the Commonwealth. The Commonwealth expects that the Bonds will be available in definitive form for delivery through the facilities of DTC on or about May 23, 2018.

Dated: May 16, 2018

$1,247,000,000 Commonwealth of Pennsylvania

General Obligation Bonds,

First Series of 2018

MATURITY SCHEDULE

(Base CUSIP Number: 70914P)

Due March 1

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Principal Amount $37,710,000 $39,600,000 $41,580,000 $43,655,000 $45,840,000 $48,130,000 $50,540,000 $53,065,000 $55,720,000 $58,505,000

Interest Rate 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 3.20%

Yield 2.190% 2.330% 2.400% 2.520% 2.680% 2.830% 2.970% 3.040% 3.100% 3.200%

CUSIP Number

K84 K92 L26 L34 L42 L59 L67 L75 L83 L91

Due March 1

2030 2031 2032 2033** 2034** 2035 2036 2037 2038 2039**

Principal Amount $61,430,000 $64,500,000 $67,725,000 $71,110,000 $74,670,000 $78,400,000 $82,320,000 $86,440,000 $90,760,000 $95,300,000

Interest Rate 3.35% 3.50% 5.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 3.75%

Yield 3.350% 3.500% 3.300% * 3.640% * 3.690% * 3.790% * 3.820% * 3.850% * 3.870% * 3.855%

CUSIP Number

M25 M33 M41 M58 M66 M74 M82 M90 N24 N32

The above CUSIP (Committee on Uniform Securities Identification Procedures) numbers have been assigned by an organization not affiliated with the Commonwealth; the Commonwealth is not responsible for the selection or use of the CUSIP numbers. The CUSIP numbers are included solely for the convenience of bondholders and no representation is made as to the correctness of such CUSIP numbers. CUSIP numbers assigned to securities may be changed during the term of such securities based on a number of factors including, but not limited to, the refunding or defeasance of such issue or the use of secondary market financial products. The Commonwealth has not agreed to, and there is no duty or obligation to, update this Official Statement to reflect any change or correction in the CUSIP numbers set forth above. CUSIP is a registered trademark of the American Bankers Association (the "ABA"). CUSIP data is provided by CUSIP Global Services, which is managed on behalf of the ABA by S&P Capital IQ, a division of McGraw Hill Financial, Inc.

* Yield to first optional redemption date of March 1, 2028.

** Insured Bonds

THE ISSUING OFFICIALS

Governor ......................................................TOM WOLF State Treasurer...................................JOSEPH TORSELLA Auditor General........................EUGENE A. DePASQUALE

OFFICE OF THE BUDGET

Secretary.............................................RANDY ALBRIGHT

Attorney General of the Commonwealth of Pennsylvania: Josh Shapiro

Co-Bond Counsel: Ballard Spahr LLP Philadelphia, Pennsylvania Turner Law, P.C. Philadelphia, Pennsylvania

Special Co-Disclosure Counsel: Greenberg Traurig, LLP

Philadelphia, Pennsylvania Andre C. Dasent, P.C.

Philadelphia, Pennsylvania

No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations, other than as contained in this Official Statement, in connection with the offering contained herein, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Commonwealth of Pennsylvania. This Official Statement does not constitute an offer to sell, or a solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction where such sale would be unlawful.

Assured Guaranty Municipal Corp. ("AGM") makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, AGM has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and presented under the heading "Bond Insurance" and "Exhibit I - Specimen Municipal Bond Insurance Policy".

Except as otherwise noted, the information herein speaks as of its date and is as of the date of this Official Statement and is subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, in any circumstances, create any implication that there has been no change in the affairs of the Commonwealth of Pennsylvania since the date hereof.

The order and placement of the information this Official Statement, including the Appendices hereto and the information incorporated herein by reference, are not to be deemed to be a determination of relevance, materiality or importance, and this Official Statement, including the Appendices, and the information incorporated herein by reference, must be considered in its entirety.

TABLE OF CONTENTS

Page

Page

Summary Information................................................... ii

General Obligation Debt Outstanding ...................... 38

Introduction .................................................................. 1

Nature of Commonwealth Debt................................ 39

The Bonds..................................................................... 1

Projected Issuance of Long-Term Debt .................... 40

Description of the Bonds .......................................... 1

Other State-Related Obligations................................... 41

Book-Entry Only System.......................................... 2

Pennsylvania Housing Finance Agency ................... 41

Optional Redemption ................................................ 2

Lease Financing ....................................................... 41

Notice of Redemption ............................................... 3

Lease for Pittsburgh Penguins Arena ....................... 43

Security and Source of Payment for Bonds .................. 3

Pennsylvania Convention Center.............................. 44

Authorization ............................................................ 3

Commonwealth Financing Authority ....................... 44

Debt Limits ............................................................... 4

Pensions and Retirement Systems ............................ 45

Bond Insurance ............................................................. 5

General Information ............................................. 45

Estimated Use of Proceeds............................................ 8

Other Post-Employment Benefits ......................... 52

Capital Facilities ....................................................... 8

Unemployment Compensation ................................. 53

Growing Greener ...................................................... 8

Government Authorities and Other Organizations ....... 54

Pennvest.................................................................... 8

City of Philadelphia-PICA ........................................... 55

Commonwealth Government ........................................ 9

Litigation...................................................................... 55

Commonwealth Employees ...................................... 9

Ratings ......................................................................... 61

Commonwealth Financial Structure and Procedures .... 10

Tax Exemption and Other Tax Matters ........................ 61

Description of Funds................................................. 10

Underwriting ................................................................ 63

Accounting Practices ................................................ 11

Legality for Investment ................................................ 63

Budgetary Basis .................................................... 11

Co-Financial Advisors.................................................. 63

GAAP Financial Reporting ................................... 12

Legal Matters ............................................................... 63

Investment of Funds.................................................. 12

Additional Information................................................. 63

Budget Stabilization Reserve Fund ........................... 13

Continuing Disclosure.................................................. 63

Commonwealth Financial Performance ........................ 13

Authorization ............................................................... 64

Fiscal Year 2018 Budget........................................... 13

Appendices:

Financial Statements Introduction ............................ 13

A. Certificate of the Auditor General ........................... A-1

Government Wide Financial Data (GAAP Basis). 14

B. Selected Data on the Commonwealth of

Financial Data for Governmental Fund Type

Pennsylvania ........................................................ B-1

(GAAP Basis) ..................................................... 15

C. Commonwealth Government and Fiscal

General Fund ............................................................ 17

Administration...................................................... C-1

Motor License Fund.................................................. 22

D. Information Regarding The Depository Trust

State Lottery Fund .................................................... 24

Company and Its Book-Entry System .................. D-1

Commonwealth Revenues and Expenditures ................ 26

E. Selected Constitutional Provisions Relating

Recent Receipts and Forecasts .................................. 26

to the Finances of the Commonwealth ................ E-1

Tax Revenues............................................................ 28

F. Proposed Form of Opinion of the Attorney

Non-Tax Revenues ................................................... 31

General of the Commonwealth of

Federal Revenues ...................................................... 32

Pennsylvania ........................................................ F-1

Major Commonwealth Expenditures ........................ 32

G. Proposed Form of Opinion of Co-Bond Counsel..... G-1

Education .............................................................. 32

H. Continuing Disclosure Agreement........................... H-1

Public Health and Human Services....................... 33

I. Specimen Municipal Bond Insurance Policy ........... I-1

Transportation....................................................... 34

Outstanding Indebtedness of the Commonwealth......... 36

General ..................................................................... 36

i

SUMMARY INFORMATION

THIS SUMMARY STATEMENT IS SUBJECT IN ALL RESPECTS TO THE MORE COMPLETE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT. OFFERING OF THE BONDS TO THE POTENTIAL PURCHASERS IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT, INCLUDING THE COVER AND APPENDICES HERETO AND THE INFORMATION INCORPORATED BY REFERENCE.

Issuer ....................................... Commonwealth of Pennsylvania (the "Commonwealth")

Offering................................... $1,247,000,000 Commonwealth of Pennsylvania, General Obligation Bonds, First Series of 2018 (the "Bonds").

Dated Date .............................. Date of issuance and delivery

Security ................................... General obligation of the Commonwealth; full faith and credit pledged (See "Security and Source of Payment for Bonds" herein). Principal and interest payments on the Bonds due March 1, of the years 2033, 2034 and 2039 are secured by a municipal bond insurance policy purchased by the Underwriter and issued by Assured Guaranty Municipal Corp.

Estimate Use of Proceeds....... The Commonwealth is issuing the Bonds for the following purposes:

Purpose Capital Facilities Projects ...................................... Growing Greener II Projects.................................. Pennvest Projects ................................................... Capitalized Interest ................................................ Costs of issuance ...................................................

Amount $1,205,000,000

26,000,000 16,000,000 41,149,841

4,393,166

Redemption............................. The Bonds maturing on and after March 1, 2029 are subject to optional redemption in whole or in part (and if in part, in part within one or more maturities) at any time on and after March 1, 2028 at a redemption price equal to the principal amount thereof, plus accrued interest to the date fixed for redemption.

Authorized Denominations.... $5,000 or integral multiples thereof.

Form of Bonds ........................ The Bonds are issued in fully registered form through a book-entry only system.

Loan & Transfer Agent ......... Manufacturers and Traders Trust Company, Harrisburg, Pennsylvania.

Legal Opinions ....................... Ballard Spahr LLP and Turner Law, P.C., Co-Bond Counsel. Greenberg Traurig, LLP and Andre C. Dasent, P.C., Co-Disclosure Counsel. Josh Shapiro, Attorney General of the Commonwealth.

Bond Ratings ........................... Fitch Ratings, Inc. ..............................................AA- (outlook "Negative") Moody's Investors Service, Inc. ........................Aa3 (outlook "Stable") Standard & Poor's Rating Services................... A+ (outlook "Stable")

Insured Bonds Ratings ............ Kroll................................................................................. AA+ Moody's........................................................................... A2 Standard & Poor's Rating Services.................................. AA

See "RATINGS" herein.

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