DALLAS — The New Mexico Finance Authority will raise $57 million for its revolving loan fund in a competitive sale of revenue bonds.
The fund supports myriad projects statewide
The deal is pricing July 24, with bids through the Ipreo Parity electronic system. Lawrence "Chip" Pierce, partner at Western Financial Group in Portland, Ore., serves as financial advisor.
The bonds carry ratings of AAA from Standard & Poor's and Aa1 from Moody's Investors Service. Outlooks are stable.
NMFA has $669.2 million of outstanding loans in its senior-lien pool and $330 million in its subordinate lien pool, according to Moody's.
The NMFA's Public Project Revolving Fund was created in 1992 to assist a wide range of municipal credits. The PPRF's goal is to provide financial assistance and flexible loan structures to underlying borrowers. The first loans were made in 1995. As of May 31, 2014, the PPRF has 650 outstanding loans totaling more than $1.2 billion.
Among the borrowers is Spaceport America, one of the nation's first in southern New Mexico. New Mexico has also supported the spaceport with $100 million of severance tax bonds.
In 2007, the authority began a contingent liquidity reserve as an enhancement to the overall pool. In 2011, the board legally appropriated $23.2 million of that money for a common debt service reserve that is currently $30.2 million.
The NMFA has about $26.5 million in the contingent liquidity account, which can be used to make loans in the period between bond issues.
The senior-lien pool has 182 borrower pledges with an accumulated principal loan value of about $823.4 million, according to Moody's. The subordinate lien pool has 92 borrower pledges with an accumulated principal loan value of $377.9 million.
The largest borrower for the senior pool is the state government's General Services Department at 10.1% of the pool. The largest borrower in the subordinate pool is Albuquerque Bernalillo County Water Authority representing 18.1% of the subordinate borrower pool.
"Given the issuer's goal of providing capital to a wide range of New Mexico municipalities, we recognize that the credit quality of the underlying borrowers will vary," wrote Moody's analyst John Nichols. "Future rating reviews will continue to consider the overall profile and credit ratings of borrowers."
