DALLAS - The El Paso Independent School District got a refunding issue to market yesterday as officials saw a window to achieve a mandated savings threshold this holiday-shortened week.
The West Texas district sold $57.2 million of unlimited-tax refunding bonds through a negotiated sale led by Southwest Securities Inc. Citi and Ramirez & Co. were co-managers.
First Southwest Co. is the district's financial adviser, and Fulbright & Jaworski LLP is bond counsel.
The debt, which is backed by the state's triple-A rated Permanent School Fund, includes $7.7 million of capital appreciation bonds maturing next year and 2010, and $49.5 million of serials maturing 2011 through 2019.
"We actually had 180 days to execute this deal, but with the market being where it is right now ... obviously it was best to go ahead and get this taken care of," said chief financial officer Ken Parker.
Jeff Robert, senior vice president at First Southwest, said school officials sought 3% savings from the refunding, but he expected present-value savings of at least 4%. Complete results of the sale weren't immediately available.
"We just got the PSF on Friday, and because this is a current refunding with a call date of February 15, 2009, we'd like to get it done now," Robert said. "And I think we can get back the level of present-value savings the district has set."
When El Paso ISD sold about $141.9 million of school building and refunding bonds in August, yields ranged from 2.23% in 2009 to 4.6% in 2020.
Parker said Southwest Securities and Citi "did a great job" on the August sale, and the district decided to retain the firms for this week's sale despite the problems Citi has faced over the past few weeks.
"They both have a strong retail presence and several firms we've used in the past have dropped out of the government-finance sector entirely, so we decided to go ahead and keep [Citi and Southwest Securities] on board for this transaction," he said.
Fitch Ratings assigned an A-plus underlying rating to the issue with a positive outlook. Analysts also affirmed the rating on $452.2 million of parity bonds outstanding, and said the rating reflects the district's "growing reserve levels, accelerating taxable values, and sustained voter support for much-needed bond programs."
The taxable-assessed value of the sprawling, 250-square-mile district increased to $14.21 billion for fiscal 2009, up 46% from $9.7 billion five years ago.
Standard & Poor's also assigned an A-plus rating to the sale.
The district exhausted a $230 million bond package approved in May 2007 with the sale earlier this year, and Parker said the overall economy and Fort Bliss expansion will dictate when officials put another bond package before voters.
El Paso is now home to about 665,000, which is 18% higher than the 2000 Census figure of 563,662. More than 1.2 million people live across the Rio Grande in Ciudad Juarez, Mexico.
The area is set to see an huge influx of new residents in the coming years, as Fort Bliss is expected to receive more troops as part of the federal government's Base Realignment and Closure initiative. Some estimates have about 21,000 troops with another 25,000 family members relocating to Fort Bliss over the next five years or so.
School officials estimate the district may see up to 10,000 new students under the BRAC plan.