DALLAS — Volume in the Lone Star state’s municipal market picks up this week with a number of school districts set to price issues and two West Texas cities offering water and sewer bonds.
Most of the school districts bonds come to market with the triple-A wrap provided by the state’s Permanent School Fund.
“One of the reasons for the increase in the number of school districts coming to market now in January or February is that an issuer selling tax-exempt debt isn’t going to do it in October, November, or December because you have a long first coupon there and it kind of penalizes you,” said one financial adviser who is pricing a competitive sale for a school district this week.
Denton Independent School District has the largest of the school bond issues this week with the negotiated sale of about $164.5 million of unlimited tax school building bonds. First Southwest Co. is the lead manager for the sale.
Voters in the growing North Texas district approved a $282 million bond package in November for two new elementary schools, one middle school, design for a fourth high school and $122.7 million of renovations to existing campuses.
The district had 13,541 students in 2000, and officials expect nearly 25,000 students by 2012.
UBS Securities LLC and Coastal Securities Inc. are co-managers for the negotiated sale of $141.1 million of schoolhouse and refunding bonds for the Lamar Consolidated Independent School District, which is 40 miles southwest of Houston.
Morgan Keegan & Co., Estrada Hinojosa & Co., RBC Capital Markets, and Southwest Securities round out the underwriting syndicate.
Chief financial officer Jill Ludwig said the issue includes about $9.9 million of refunding bonds and the district hopes to achieve savings of about $500,000 from taking out some Series 1998 debt.
She said the bulk of the new-money proceeds will fund construction of the district’s secondary-school complex, with additional proceeds being used for new elementary schools and district-wide renovations.
Ludwig said the district’s concept is to separate sixth-grade classes in one building instead of traditional middle schools of sixth, seventh, and eighth grade. And then the district has the other middle-school grades in another building with a high school on the same lot.
Vinson & Elkins LLP is bond counsel and First Southwest is the financial adviser to the growing district, which serves nearly 22,700 students in 18 elementary schools, two middle schools, three junior high schools, three high schools.
Officials expect enrollment to continue to grow with the student population reaching about 34,000 in 2015.
Ludwig said the district continues to expand with more residential and commercial growth coming.
Allen Independent School District, about 25 miles north of Dallas, plans to offer $18.5 million of general obligation bonds at some point this week through a negotiated sale led by RBC.
This issue exhausts authorizations approved by voters in 2002 and 2004, and the district won’t have any unissued debt following the sale.
Proceeds will fund new schools and new buses for the growing district. Total enrollment has climbed to more than 17,000 students this year from 13,815 in 2004.
Argyle Independent School District will issue $20.8 million of unlimited tax school building bonds this week following an upgrade of its underlying credit by Standard & Poor’s to A-minus from BBB-plus.
Southwest Securities is lead manager for the deal with First Southwest and Edward Jones as co-managers.
Analysts cited the district’s significant property tax-base expansion and “considerably stronger financial position due to consistent operating surpluses” in the upgrade.
The assessed valuation of the North Texas district has more than doubled over the past six years to $898.9 million for fiscal 2008, according to Standard & Poor’s.
The district, which had an enrollment of 638 and no high school a decade ago, has a current student population of than 1,700.
The Chico Independent School District, about 55 miles north of Fort Worth, plans to offer $18.5 million of general obligation bonds at some point this week through a negotiated sale led by RBC.
Today, the Lewisville Independent School District will competitively offer $87.7 million of unlimited tax school building bonds using proceeds to build additions to two elementary schools. Insurance for the bonds will be at the bidder’s option.
Southwest Securities is the financial adviser to the district and McCall, Parkhurst & Horton LLP serves as bond counsel.
The student population of the rapidly growing school system about 10 miles north of the DFW International Airport has climbed 64% in the past decade. The current enrollment is about 49,500 students. Officials expect to continue to add about 1,000 students annually until 2016.
The district has built 51 new schools since 1980 and more than 30% of that construction has occurred in the past 10 years. Lewisville ISD draws students from at least 13 communities across North Texas.
This sale exhausts authorizations overwhelmingly approved by voters in 2001 and 2005.
The city of Lubbock is bringing nearly $67 million of tax and wastewater system surplus revenue certificates of obligation to market.
Morgan Keegan is lead manger for the negotiated sale and RBC is the financial adviser to the city that’s now home to more than 212,000 residents, which is up 6% from the 2000 tally of just less than 200,000.
Proceeds will finance renovation of the city’s Southeast Water Reclamation Plant that converts wastewater to stream-quality water using advanced technology.
The plant, which treats about 21 millions gallons a day, is designed to meet the needs of the drought-prone city in the arid West Texas region for the next 20 years.
El Paso plans to offer $30.7 million of water and sewer revenue refunding bonds though a negotiated sale led by Ramirez & Co. Inc. and Wachovia Bank N.A.
Fulbright & Jaworski is bond counsel and First Southwest is the city’s financial adviser.
The refunding takes out some commercial paper notes and various series of water and sewer bonds.
El Paso is mired in a widespread federal corruption investigation, in which a few former officials, as well as a couple bankers, have been convicted of bribery and fraud. Numerous others have resigned from various posts with the city, county, and school district.
