DALLAS - Activity in the municipal bond market has rebounded in the past few days, but officials in Texas continue to monitor conditions and say they will time their debt sales in order to achieve mandated parameters.
Houston has a two-tranche issue on the calendar, but it's unclear exactly when the deal will price. The nation's fourth-largest city plans to offer $387 million of public improvement refunding bonds and $32 million of tax and revenue certificates of obligation through negotiated sales led by Goldman, Sachs & Co. The refunding will take ouot commercial paper.
First Southwest Co. is the financial adviser to the city and Andrews Kurth LLP is bond counsel.
Communications director Frank Michel said officials anticipate issuing the debt at some point next week.
Late last week, Mayor Bill White and Controller Annise Parker said Houston may delay up to $200 million of public infrastructure projects due to the uncertainty in the credit markets.
Moody's Investors Service assigned a Aa3 rating to the coming sale with a positive outlook, and affirmed the rating on $2.4 billion of outstanding parity debt. Credit strengths include a large and increasing tax base, spurred by a vibrant energy sector and construction activity.
Houston carries underlying ratings of AA from Standard & Poor's and AA-minus from Fitch Ratings.
In North Texas, the Plano Independent School District had hoped to bring the first tranche of a $490 million bond package approved in May to market next month. But now instead of a $180 million sale the suburban district plans to price only $17 million in a few weeks.
Associate superintendent for business services Richard Matkin said Plano ISD needs to issue that much to meet a reimbursement resolution and keep the maintenance and operations fund where it's mandated.
"Well, the number one reason is that rates currently aren't where we'd like them to be," Matkin said. "We do think they'll come back down, but the 6.1% or so I was seeing in my most recent analysis isn't a rate we foresaw when we laid out our debt schedule and interest payment projections. We feel we can certainly modify our construction schedule and timing of some projects and wait until the new year to come back to market with the balance [of the $180 million issue]."
The approved bond package calls for four new campuses and technology upgrades across the district.
In 1960, only about 3,700 people lived in Plano. Now the city's population is nearing 270,000 and is more than double the 1990 Census tally of about 129,000. The school district serves a total enrollment of nearly 54,000 students in 68 schools.
Plano ISD carries underlying ratings of AA from Standard & Poor's and Fitch, and Aa1 from Moody's.
About 30 miles northeast of Austin, officials of the growing exurb of Taylor decided to postpone the sale of $10 million of certificates of obligation, citing the volatile debt market.
The city plans to use proceeds from the debt to build a 75-acre park and a water-storage tank on the west side of town, which is seeing increases in residential development now that a new state highway has been completed.
Taylor's current population of about 17,500 is up nearly 30% from the start of the decade. Officials expect the population to double within 20 years
In May, Standard & Poor's upgraded Taylor's underlying credit to A from BBB-plus based on "good financial management and maintenance of strong reserves despite growth pressures."
