San Diego Mayor Jerry Sanders announced Tuesday that the city has arranged another $150 million private placement to meet capital needs while the city remains locked out of the public debt markets.
The financing, slated to go before the City Council next week, will fund improvements to the water system through the end of the calendar year.
The private financing can be refunded without penalty once San Diego regains market access, according to the Sanders administration. JPMorgan is underwriting the deal.
The city has been blocked from public debt markets since its comprehensive annual financial report for fiscal 2003 became entangled in the crisis after San Diego revealed in early 2004 that it had not disclosed to bond investors the extent to which it had underfunded its employee pension plan.
The spiraling troubles that followed led to Securities and Exchange Commission sanctions against the city and years of delays for its 2003 CAFR, as well as those for subsequent years.
Sanders said Tuesday that, if the city attorney cooperates, San Diego will complete its fiscal 2006 financial statements by early March, which should allow it to regain access to the public markets by late spring.
Before that happens, Sanders said the city plans private placements of $100 million for deferred maintenance and capital improvements, and a plan to leverage approximately $7 million in employee pension contributions.
