BRADENTON, Fla. - Kentucky plans to proceed with this week's issuance of $385.5 million in new and refunding bonds if the Northeast blizzard permits.
The deal being brought by the Kentucky State Property and Buildings Commission was scheduled to price for in-state retail orders on Tuesday, with final pricing on Wednesday.
"The transactions continue to be scheduled to price Wednesday, which is supposed to be after the brunt of the storm," Ryan Barrow, executive director of Kentucky's Office of Financial Management, said by email from New York on Monday.
"We are currently evaluating our approach to the in-state only retail order period which was scheduled for [Tuesday] but remain flexible with regard to the entire transaction schedule in light of weather conditions," he added.
The offering is structured as $128.5 million in 20-year new money revenue bonds and $257 million in refunding bonds for debt-service savings.
In the current interest rate environment, the commission estimates the refunding's present value savings at about $30.6 million, or 11% of refunded par, according to Barrow.
The bonds are rated A-plus by Fitch Ratings and Standard & Poor's, and Aa3 by Moody's Investors Service. Fitch and Moody's assign stable outlooks.
S&P assigns a negative outlook due to the state's "substantially underfunded pension liabilities." As of June 30, 2014, valuation, Kentucky's combined unfunded pension were approximately $29 billion with an overall funded status of 49%, the rater said.
Citi is the book-runner, and co-senior manager along with Morgan Stanley & Co. for this week's transaction.
Other underwriters on the deal are Edward D. Jones & Co., Fifth Third Securities, First Kentucky Securities Corp., J.J.B. Hilliard, W.L. Lyons LLC, PNC Capital Markets LLC, Raymond James & Associates Inc., and Stern, Agee & Leach Inc.
Peck, Shaffer & Williams, a division of Dinsmore & Shohl LLP, is bond counsel. Stites & Harbison PLLC is underwriters' closure counsel.
