DALLAS — While municipal bond issuance in Texas has been relatively flat so far this year, issuers next week will step up to the plate with bond deals worth more than $1.03 billion.
While a Washington state issuer will lead the market with the week’s largest deal – an $806.8 million transaction by Energy Northwest — Texas issuers will pony up a fistful of large deals, including three that that top $100 million.
Among those deals is a $180.8 million offering by the Tarrant Regional Water District. That new money revenue deal, which will be underwritten by a syndicate led by RBC Capital Markets Inc., and Morgan Keegan & Co., will be priced Tuesday.
First Southwest Co. is the district’s financial adviser, and McCall, Parkhurst & Horton is bond counsel.
The deal has received an AA rating from Standard & Poor’s and district officials expect a rating in the same range from Moody’s Investors Service, the only other agency to rate the credit. In addition, the deal is expected to go to market with bond insurance.
Also on the list of Texas-sized offerings for this week is a $130.4 million general obligation bond issue by the Goose Creek Consolidated School District, which serves the Baytown area outside Houston.
That deal will be lead managed by First Southwest Co. RBC Capital Markets Inc. is the district’s financial adviser.
Although underlying ratings for the Series 2006 bonds had not been released as of press time on Friday, the district’s last bond issue carried underlying ratings in the A-plus range. However, like the district’s outstanding debt, the Series 2006 bonds will go to market with the natural triple-A ratings of the Texas Permanent School Fund.
The University of Texas System Board of Regents will also price a big deal this week, offering up $100 million of PUF-backed bonds to market in a current refunding deal that officials say should result in net present value savings just under 3%.
“It’s a current refunding, so we’ll take any savings we can get,” said Terry Hull, director of finance for the UT System, adding that the deal will close April 4.
Lehman Brothers will serve as the lead manager for the issue, and Vinson & Elkins is the system’s bond counsel. The system handles its own financial advisory needs for its debt issues, all of which carry the system’s natural triple-A ratings.
Also on the calendar for the week is the sale of $61 million of general obligation bonds by the Alamo County Community College District, which serves the San Antonio area. That issuer will also sell $31 million of maintenance tax notes.
Both issues are scheduled for pricing tomorrow .
The GO issue will be lead managed by Morgan Stanley, and the tax note issue will be lead managed by Banc of America Securities LLC. First Southwest Co. is the district’s financial adviser and Fulbright & Jaworski serves as its bond counsel.
The two tranches of debt are rated AA by Standard & Poor’s and Aa2 by Moody’s Investors Service.
A planned issue of $5 million of combined fee revenue bonds for the Alamo college district has been postponed for about a month, giving officials time to complete a land acquisition. Once that transaction is completed, the revenue bond issue will go to market, with the costs associated with the real estate deal included — pushing the deal up to about $8 million.
Other large deals headed to market next week are an $89.8 million GO issue by the Lake Travis Independent School District, a $62.5 million issue of certificates of obligation by Dallas County, a $50.5 million GO issue by the Grapevine-Colleyville ISD, and a $46.14 million GO issue by the Lancaster ISD.
Travis County will sell three tranches of debt worth a total of $84.03 million, including $44.01 million of permanent improvement bonds, $23.9 million of certificates of obligation, and $16.1 million of unlimited tax road bonds.
In addition, Travis County is scheduled to serve up $15 million of single-family mortgage revenue bonds via its Travis County Housing Finance Corp.
Grand Prairie will serve up multiple issues this week worth $18.2 million, including a $3.3 million GO issue, $10.2 million of certificates of obligation, and $4.8 million of water and sewer revenue bonds. The city of Garland will also bring three separate issues to market, selling a $25 million issue of electric utility system revenue bonds, $16.2 million of water and sewer system revenue bonds, and a $10.4 million issue of certificates of obligation.
Other issuers slated to sell debt this week include: Hillsboro with $4 million of GOs; the Montgomery County Municipal Utility District No. 18 with $5.1 million of unlimited-tax bonds; the Harris County MUD No. 382 with $3.8 million of unlimited-tax bonds; the North Texas MUD with $2.15 million of contract revenue bonds; and the Northtown MUD with $4.5 million of unlimited-tax and revenue bonds.
Also selling debt this week are the Ben Bolt-Palito Consolidated School District with $1.5 million of refunding GOs; the Clear Lake Water Authority with $2.5 million of revenue bonds; the Eanes ISD with $35 million of refunding GOs; and the Fort Bend County MUD No. 47 with $4.3 million of refunding unlimited tax bonds.
The Blue Ridge ISD will also sell debt this week, bringing a $3.3 million issue of refunding GOs to market, as will the El Campo ISD, which will sell $19.9 million of GOs, the Kountze ISD, which will sell $12.5 million of GOs, and the Port Aransas ISD, which will sell $5.2 million of refunding GOs.
At the close of trading on Friday, the triple-A GO scale in 2036 ended the week at a 4.37% yield according to Municipal Market Data.
