Closing is scheduled this week for White Lake Township, Michigan's second try at a general obligation bond sale after the first was interrupted by the cybertheft of bond proceeds.
The $28.75 million Series 2025 bonds will be delivered Thursday, according to the
Underwriters Stifel and JPMorgan priced the bonds March 19, with yields from 2.86% for the 2026 maturity to 4.75% on the 2054 term bond.
White Lake Township Treasurer Mike Roman did not respond to phone calls or emails seeking comment.
Baker Tilly is the municipal advisor on the deal. The bond counsel is Dickinson Wright.
Bond proceeds will fund the design and construction of a new public safety headquarters and a new civic center, as well as costs of issuance.
The township first sold bonds through competitive auction last year. According to the official statement for the new deal, a hacker gained access to a township email account and
The deal was canceled.
S&P Global Ratings assigns the bonds its AA-plus rating with a stable outlook.
In its Jan. 22 credit opinion, S&P said it rated the bonds at the level of the township's general creditworthiness because of the ad valorem tax pledge and "a lack of limitations on the fungibility of resources available for debt service." It also cited White Lake's growing tax base and proactive, conservative management team.
Offsetting those factors, S&P said, are the lack of formalized policies and local income metrics below peers in its rating category.
Regarding the cyberattack, S&P said, "In our view, financial loss to the township will likely include administrative, legal, and investigative costs, the latter two of which are covered by its insurance policy."
White Lake said in the official statement for the Series 2025 bonds that its cybersecurity risk insurance policy from the Michigan Municipal Risk Management Authority has a policy limit of $2 million per claim with a deductible of $25,000. That allotment is currently going toward efforts to investigate the cyberattack.
The official statement says $23.91 million of the $29.1 million purchase price of the canceled Series 2024B bonds has now been recovered. If White Lake is found liable for the difference, it could exceed available insurance coverage, the township said.
Baird in January
White Lake said in the official statement that if it were found liable for claimed losses, it has reserves available, and could also issue certificates of indebtedness or judgment bonds to raise money to pay the liability.
The township also said it has made some changes following the hacked closing.
"The township is in the process of developing and implementing additional cybersecurity protection measures intended to strengthen its cybersecurity and mitigate cybersecurity risks, which measures include quarterly training for officials and staff and multi-factor authentication for accessing email accounts, among other things," according to the new official statement for the Series 2025 bonds.
The bonds are being issued
"The firm devoted a substantial amount of time in performing the services necessary… and anticipated receiving a fee of $64,000 for such services," the firm wrote. It added that if this financing is not successfully completed, "the client agrees to compensate the firm its normal hourly rates for time actually spent on the bond issue, plus client charges and costs."
The bonds are backed by township's limited tax, full faith and credit, general obligation pledge for payment of principal and interest.
