This article is part of a series spotlighting The Bond Buyer’s ten 2020 Deal of the Year award winners, running from December 9 through 15. One of these honorees will be chosen as our national Deal of the Year at a virtual event taking place December 16. For more information on the Deal of the Year winners and how to obtain a complimentary pass for the virtual event, click
With a global pandemic still raging, the city of Tampa, Florida, used uncertainty to its advantage, selling $362.8 million of water and wastewater systems revenue and refunding revenue bonds in July, earning The Bond Buyer's Deal of the Year award for the Southeast Region.
The cty opted to switch from a competitive deal to a negotiated offering as a result of the health crisis in order to spearhead a targeted marking and investor outreach strategy.
"We took advantage of that market uncertainty to solicit responses from Wall Street, regional, and minority underwriters," said Tampa CFO Dennis Rogero. “We conducted highly structured video interviews with six senior manager finalists, during which we had them focus on issue structure, credit challenges, and broadening investor access."
Bank of America was selected underwriter on the deal, with J.P. Morgan serving as co-senior manager and Citi, Raymond James, and Seibert Williams Shank & Co. as co-managers. Ford & Associates, Inc. was financial advisor and bond counsel was Nabors Giblin & Nickerson.
Despite facing headwinds from COVID-19 and increased market supply the week it sold, the offering was well received with the $270 million Series A bonds generating more than $1 billion of orders while the $92 million Series B bonds got $473 million of orders. The strong investor demand allowed yields to be lowered between 3 and 9 basis points on all but two maturities on the Series 2020A bonds and by 5 to 15 bps on the Series 2020B bonds.
The deal kicked off Tampa’s five-year $1.2 billion capital improvement program to upgrade the city's water pipes and finance other infrastructure upgrades. The transaction was also advance refunded some debt on a taxable basis to take advantage of historically low interest rates and achieve near-term cash flow savings.
“Upon taking office in 2019, Mayor [Jane] Castor immediately emphasized strategic planning and continued the emphasis on infrastructure," Rogero said. "We looked at the $1.2 billion holistically and developed a multi-issuance program structure that would minimize costs, maximize long-term liquidity, and retain significant debt service coverage while hedging against potential interest rate increases."
Ahead of the sale, Moody’s Investors Service upgraded Tampa’s water and wastewater bonds by one notch to Aaa from AA1 citing ample debt service coverage and liquidity. S&P Global Ratings and Fitch Ratings both affirmed the bonds atAAA.
“The Moody’s upgrade combined with a more stable market, allowed us to attract a number of first time investors to the city’s water and wastewater credit,” Rogero said.
