A Land Deal From Nantucket

The Nantucket Island Land Bank Tuesday will sell $15 million of long-term debt in a competitive deal that will help refund existing debt and pursue open space initiatives. About $7.3 million will refund short-term debt that is due to mature, with the Land Bank using remaining funds for land acquisition. The transaction will offer serial bonds going out through 20 years. First Southwest Co. is financial adviser on the fixed-rate deal. Edwards Angell Palmer & Dodge LLP is bond counsel. “Part of it is to refund outstanding debt and part of it is to acquire new land which they’ve actually just recently acquired,” said Cynthia McNerney, managing director at First Southwest. “So, they’ll be reimbursing themselves for land that they just recently purchased.” McNerney said the bonds will probably be enhanced, but insurance is at the option of the bidder.The Land Bank has roughly $15 million of outstanding debt. Moody’s Investors Service rates the credit A1. Fitch Ratings and Standard & Poor’s do not rate the issuer. The agency’s debt is backed by revenues and the full faith and credit of the town of Nantucket. The Land Bank receives a 2% transfer fee on most property sales on the island and anticipates collecting nearly $15 million of transfer fee revenue in fiscal 2008, McNerney said. The agency received about $15 million and $22 million in fiscal 2007 and 2006, respectively. The current assessed value of all property on the island is $20.6 billion, according to McNerney. Through the Land Bank and other conservation groups, 40% of land on Nantucket is preserved as open space. The island is 50 square miles in size and is located 22 miles south of Cape Cod. The Massachusetts legislature created the Land Bank in 1984 to help acquire, hold, and manage open space on Nantucket for the use and enjoyment of the general public, according to the agency’s Web site.