DALLAS — There are only a few unrated, bank-qualified deals on this week’s calendar in Texas, as issuers continue to monitor the rapidly changing landscape of the markets.
Harris County Municipal Utility District No. 341.plans to offer $1.7 million of unlimited-tax bonds in a competitive sale today. The bonds are structured as serials maturing from 2018 through 2025. First Southwest Co. is the financial adviser to the district and Schwartz, Page & Harding LLP is bond counsel.
In the competitive market Wednesday, Fort Bend Municipal Utility District No. 121.expects to price nearly $2.5 million of unlimited-tax bonds and Langham Creek Utility District may offer $4.2 million of waterworks and sewer system combination tax and revenue bonds.
First Southwest is also the financial adviser to both districts and Schwartz Page is bond counsel to the Langham Creek district, which is in Harris County.
Allen Boone Humphries Robinson LLP is bond counsel to the Fort Bend utility.
None of the districts are rated by any of the big three rating agencies, and insurance will be at bidder’s option for all three deals.
Each of the utilities reported that they weren’t affected by Hurricane Ike, which hit the Texas Gulf Coast earlier this month.
Numerous deals have been postponed over the past few weeks due to both the hurricane and the overall upheaval in the markets, although one issue priced last Thursday after being delayed for a bit.
Northgate Crossing Municipal Utility District No. 2. sold $1.05 million of unlimited-tax bonds in a competitive deal won my Sterne Agee. The deal resulted in a true interest cost of 6.0036% for the issuer, which is in Harris County about 25 miles from downtown Houston.
The bonds are insured by Assured Guaranty Corp. SAMCO Capital Markets Inc. is financial adviser. Proceeds will fund the district’s contribution to the North Harris County Regional Water Authority’s surface-water conversion project.
This is the fifth sale by the utility, which now has about $32.5 million of debt outstanding and $12.3 million of authorized but unissued debt.
Standard & Poor’s assigned a BBB underlying rating to the sale. Analysts said the 465-acre district is mostly residential and 95% developed with utility infrastructure. Credit strengths include participation in the Houston-area economy, a stable tax base, and limited additional capital needs, according to Standard & Poor’s.
Corpus Christi initially planned to get $12 million of combination tax and solid-waste revenue certificates of obligation to market earlier this month, but Hurricane Ike and the market uncertainty has pushed the sale back. Morgan Keegan & Co. is lead manager for the negotiated issue.
M.E. Allison & Co.is the financial adviser to the growing city, and McCall, Parkhurst & Horton is bond counsel.
Mark Seal, senior vice president with M.E. Allison, said the sale isn’t pressing and will price eventually but not this week.
“We’re just going to see what happens with the government bailout here,” he said. “It seems the thinking is people are just sitting on their money right now. The city is not in dire straits for the debt, so we’ll just have to wait and see.”
Standard & Poor’s raised the underlying rating on Corpus Christi’s general obligation debt earlier this month to AA-minus from A-plus, citing a large and diverse economic base, with sound financial management that’s produced balanced annual budgets and general-fund balance increases for the past seven years.
The Corpus Christi City Council recently decided to put a $153 million bond referendum on the November ballot, with the majority of the package for street improvements.
Fitch already had the city’s GO credit rated at AA-minus, and Moody’s rates the largest Gulf Coast city at A1.
The city’s current population of nearly 300,000 is up about 8% from the 2000 census figure of 277,454. The taxable assessed valuation averaged 8.6% growth the past five years to a projected $13.8 billion for fiscal 2009.
Fitch analysts said the tax base “continues to expand but at a more moderate pace after notable gains in the recent housing boom.”
Gaines County was set to bring $13.5 million of certificates of obligation to market this week, but the Commissioners Court accepted a citizens’ petition last week to put the debt sale to a vote next year.
“Our commissioners opted not to sell the debt and will instead allow voters to decide on the issue in May,” said county auditor Rick Dollahan.
First Southwest is the financial adviser to the West Texas county.
The county’s fiscal 2009 taxable-assessed value of $5.86 billion is more than double the $2.59 billion of five years earlier.
Dollahan attributed most of the growth to increases in the mineral values of the community. He said roughly 94% of county revenue comes from mineral asset, and the population is growing as well, including an influx of new residents from the German Mennonite community.
