D.C. to Issue $578M in Tax-Exempt GO Bonds

WASHINGTON – The District of Columbia next week will issue $577.6 million in general obligation bonds, partly to finance projects under the district's capital improvements plan.

The bond issuance includes $390.2 million of Series 2016D GO bonds and $187.3 million of Series 2016E GO refunding bonds. The sale date is scheduled for Nov. 30, and the expected closing date is Dec. 20.

According to the preliminary official statement dated Nov. 18, proceeds of the Series 2016D bonds will be used to finance capital project costs under the district's capital improvements plan as well as to cover issuance costs.

Proceeds of the Series 2016E bonds will be used to advance refund a portion of the district's outstanding Series 2007C GO bonds as well as to also cover issuance costs.

The bonds were rated AA by both Fitch Ratings and S&P Global Ratings, and were given an Aa1 rating by Moody's Investors Service. Loop Capital Markets, Barclays, Morgan Stanley, Citigroup, Fidelity Capital Markets, Mesirow Financial, Stern Brothers & Co., Bank of America Merrill Lynch, and Jefferies are underwriters.

Bryant Miller Olive in Washington is bond counsel for the issuance, while Hawkins Delafield & Wood is disclosure counsel, and Marlton, N.J.-based Acacia Financial Group and PFM Financial Advisors in Philadelphia are financial advisors.

D.C.'s proposed six-year capital improvements plan, released in March, includes $6.3 billion in infrastructure spending, roughly $4.3 billion of which will be financed with munis.

The plan includes $865 million of income tax secured revenue bonds and/or GO bonds financing capital improvements in fiscal 2017. The capital improvements plan assumes the issuance of $3.8 billion of income tax secured revenue bonds and/or GO bonds between fiscal years 2017and2022.

According to the preliminary OS, the federally funded and locally funded portions of the district's fiscal 2017 proposed budget will be submitted separately under different processes.

D.C. Mayor Muriel Bowser plans to submit only the federal portion to the president to be included in the fiscal 2017 federal budget subject to congressional review.

The D.C. Council plans to submit the local portion to Congress as a regular piece of legislation.

In June, the district issued $431.8 million of GO bonds, which were also used to finance projects under its capital improvements plan.

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