Southeast Muni Volume Slips in 2013
February 26, 2014 12:56 PM
Jefferson County, Ala., had the Southeasts third-largest single bond issuance in 2013 with a $1.785 billion sewer deal that was the cornerstone of the countys plan to exit Chapter 9 bankruptcy. County Commission President David Carrington is writing a tell all book about what once was the nations largest municipal bankruptcy and dealing with a total of $4.2 billion in debt. Hes planning to publish the book on Dec. 4, 2014 the first year anniversary of the countys exit from bankruptcy.
Public Financial Management Inc. maintained its years-long status as the top financial advisor in the Southeast in 2013 working on $9.521 billion of par volume. Though that was down nearly 34% from 2012, PFM Managing Director David Moore expects issuance to pick up slowly. We have begun to see clients talking about new projects but the new money just didnt pick up late in the year, he said. We expect that to change in 2014 and 2015 but theres a lag in new money issuance as issuers are still working out of the slower economy the last couple of years.
The state of Georgia brought the Southeasts sixth-largest single deal last year with a $685 million competitively priced general obligation bond pricing on June 26. The transaction sold in three series consisting of tax-exempt GO bonds, taxable GOs, and taxable qualified school construction bonds. The bonds, rated triple-A, attracted bids of less than 2 basis points between each series, according to Lee McElhannon, director of bond finance with the Georgia State Financing and Investment Commission. JPMorgan had the best bid on the tax exempt bonds while Citi had top bid on the taxable GOs. Bond proceeds are being used for various state and public education projects.
The Florida Hurricane Catastrophe Fund Finance Corp. had the regions single-largest bond deal of 2013 when it priced $2 billion of taxable revenue bonds on April 10. Though the deal sold with spreads that were better than Treasuries, it also sold better than the Cat Fund anticipated, according to Florida Division of Bond Finance Director Ben Watkins, who said the deal priced at a blended rate of 2.61%. The state-run nonprofit reinsurer will use proceeds to make timely payments for insurance company claims if needed during the hurricane season. The financing entity for the Cat Fund is now known as the State Board of Administration Finance Corp.
The Kentucky Public Transportation Infrastructure Authority received nearly $3 billion in orders for its negotiated sale of $727.9 million of bonds and notes Dec. 12. The deal priced on one of the heaviest new-issue weeks of the year, and it was the fourth single-largest offering in the Southeast during 2013. The average cost of the financing was 4.4%. It was also the largest financing for $1.3 billion Downtown Crossing of the Ohio River project between Louisville and southern Indiana. Kentuckys largest transportation project, which began June 18, will renovate the existing Kennedy Bridge carrying Interstate 65 though downtown Louisville, build a new, adjacent I-65 bridge, and reconstruct interchanges in Louisville and Jeffersonville, Ind.
The South Carolina Public Service Authority, known as Santee Cooper, priced the regions third single-largest deal in August with $1.34 billion of taxable and tax-exempt bonds, which were sold to institutional buyers. The largest amount of proceeds are being used to pay part of Santee Coopers cost for new nuclear units under construction at the V.C. Summer plant owed by South Carolina Electric & Gas. At least two large bond sales by Santee Cooper last year helped propel Haynsworth Sinkler Boyd PA to become the second-ranked bond counsel firm in the Southeast last year, up from ninth place in 2012.
