SAN FRANCISCO - Alaska plans to go to market next month with the first piece of a recently approved general obligation authorization, and a sizable pension obligation bond issue may follow if the market cooperates.
Voters in November passed a ballot measure authorizing $315 million of new GOs.
The state expects to sell about $165 million from that authorization competitively on April 2, said Deven Mitchell, Alaska's debt management director.
The State Bond Committee is scheduled to meet March 13 to formally authorize the sale.
Scott Balice Strategies LLC is the financial adviser.
Alaska carries underlying GO ratings of AA-plus from Standard & Poor's, AA from Fitch Ratings, and Aa2 from Moody's Investors Service.
Also in the works this year - but far less certain - is a POB sale of up to $2 billion.
State lawmakers in 2008 authorized the sale of up to $5 billion of POBs. So far, the market hasn't cooperated, Mitchell said.
"We continue to monitor the market," he said. "We have a statutory requirement that our interest rate not exceed 6.75% and our policy target is something lower than that."
Last June, the state appointed Citi to lead the deal team for the POBs, with First Southwest Co. as financial adviser.
"We've been monitoring the market and there has been a lot of improvement," Mitchell said. "We're moving forward to issue bonds if there are better conditions in the market, sometime in late spring or early summer."
At this point the maximum size Alaska is contemplating is $2 billion, he said.
"There has been some suggestion that a smaller issue might fare better in the current environment if you can find the right buyers," Mitchell said. "In any event, it would be a minimum size of something north of $500 million but no more than $2 billion."
