DALLAS — With continued uncertainty on Wall Street, there are just a few small deals on tap in Texas this week.
Only three issues priced last week in the Lone Star state for a total of $8.4 million. All were sold competitively and there wasn’t a single negotiated deal last week in Texas.
Overall national market volume plunged nearly 40% during September from a year earlier, as many deals that were set to price later in the month were postponed or put off entirely amid the far-reaching credit crisis.
As one bond lawyer here in Dallas said last week, “it’s just crazy right now … everyone is waiting to see if there’s any more shoes left to drop, waiting to see what the Fed is going to do … what Congress will do, and just in wait-and-see mode. There’s not much else to do.”
On Friday, the House passed a modified $700 billion bailout plan, which includes more than $3 billion of bond-related provisions, renewable energy incentives, disaster relief, and a one-year “patch” to the alternative minimum tax that was approved earlier in the week by the Senate. Although the impact on imminent new issuance remains unclear.
Coppell Independent School District may try to issue about $14.7 million of tax and revenue notes this week through a negotiated sale led by Morgan Keegan & Co. with Piper Jaffray & Co., and First Public LLC as co-managers.
First Southwest Co. is the financial adviser to the district, and McCall, Parkhurst & Horton is bond counsel.
The district, which sits just northeast of Dallas-Fort Worth International Airport, doesn’t have any authorized but unissued bonds and sometimes sells notes for funds to provide general maintenance and acquisition of land, furniture, technology, and buses. Officials are considering putting another bond package of less than $50 million to a vote next year.
Proceeds from these notes will be used to acquire land near the North Lake area of the district where construction of a development with 10,000 single-family homes is underway.
Standard & Poor’s assigned a AA underlying rating to the sale, citing the district’s deep and diversified economic and employment bases, “very strong wealth and income levels,” and “very strong financial position due to historically sound financial performance that has led to consecutive surpluses.”
Analysts said the district’s median household income is 207% of the state average and 201% of the national average, and the taxable-assessed value rose 27% the past five years to $7.5 billion for fiscal 2008.
Fitch Ratings also assigned a AA underlying rating and affirmed the rating on $133.1 million of debt outstanding.
Fort Bend County Municipal Utility District No. 129 will offer about $5.3 million of unlimited-tax bonds in a competitive sale today. The bonds are structured as serials reaching final maturity in 2034.
First Southwest is the financial adviser to the district and Allen Boone Humphries Robinson LLP is bond counsel.
Anthea Moran, vice president with First Southwest, expects the deal to proceed as planned and said that her firm’s Houston office was involved in all three issues that priced last week.
First Southwest is also the financial adviser to Bay Colony West Municipal Utility District, which expects to price nearly $3.1 million of unlimited-tax bonds Friday through a competitive sale.
In the competitive market Tuesday, Sienna Plantation Levee Improvement District plans to issue $9.2 million of unlimited tax, levee-improvement bonds while Brazoria County Municipal Utility District No. 21 has a $3.4 million issue of unlimited tax bonds ready to go.
RBC Capital Markets is the financial adviser to both Houston-area districts.
Standard & Poor’s upgraded the credit of the Sienna Plantation district to BBB from BBB-minus due to continued economic expansion, and a moderating, but still high, debt burden.
Analysts said the district’s fiscal 2007 unreserved fund balance of $656,000 equates to about 45% of expenditures because of limited operational responsibilities.