DALLAS — Market upheaval and the continuing fallout from Hurricane Ike have resulted in a nearly blank schedule in Texas for this week. One small utility and a rural suburb may try to price bonds, and that’s about it.

A number of issuers around the Gulf Coast have postponed sales and others appear to be waiting for some semblance of market stability before bringing new debt to market.

A handful of school districts sold bonds last week. Most Texas school debt comes to market wrapped with the state’s triple-A rated Permanent School Fund. The lack of new transactions leaves a dearth of gilt-edged Texas debt, just as many investors are in a flight to quality. 

Triple-A rated Harris County has a commercial paper takeout teed up and ready to go, but exact timing remains unclear. The county, which includes Houston, plans to issue $200 million of permanent-improvement refunding bonds in two series.

Standard & Poor’s rates the third-largest county in the country with more than 3.6 million residents at AAA due to the substantial and diversifying economic and property-tax bases, strong reserve levels, low direct-debt levels, and strong financial management.

Analysts said the county’s property-tax base of nearly $255 billion continues to expand and is up nearly 40% the past four years, with 2% to 3% annual growth projected.

One deal that may get to the competitive market Thursday is a $1 million sale by Northgate Crossing Municipal Utility District No. 2.

Proceeds will fund the district’s contribution to the North Harris County Regional Water Authority’s surface-water conversion project.

This is the fifth sale by the utility, which in is Harris County about 25 miles from downtown Houston. Following this week’s sale the district will have about $32.5 million of debt outstanding and $12.3 million of authorized but unissued debt.

Standard & Poor’s assigned a BBB underlying rating to the sale. Analysts said the 465-acre district is mostly residential and 95% developed with utility infrastructure. Credit strengths include participation in the Houston-area economy, a stable tax base, and limited additional capital needs, according to Standard & Poor’s.

Roanoke may try to price $5.4 million of combination tax and revenue certificates of obligation through a negotiated sale led by First Southwest Co. at some point this week.

Arlington pushed back a $175 million sale of special-tax refunding bonds for the Dallas Cowboys Complex project until next week at the earliest.

Fitch Ratings assigned an A rating to the sale and affirmed the rating on $133.7 million of similar debt.

The Series 2008 bonds take out Series 2005B variable-rate bonds. The city sold three series of special-tax bonds three years ago to fund its share of construction of the stadium.

The debt is backed by a half-cent sales and use tax, a five-cent car-rental tax, and a two-cent hotel occupancy tax. One series is also secured “further by annual rental payments and a portion of annual stadium naming rights fees,” analysts said.


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