The troubled Clay County Gas Utility District has notified the bond market that, due to a lack of funds, it was unable to make Dec. 1 principal and interest payments on its Series 1998 bonds.
The Utility District said, “It is not expected, at this time, that the district will be able to make future principal and interest payments.”
The district has not made a single debt service payment since it sold $3.25 million of unrated, uninsured bonds in 1998. The bonds have serial maturities between 1999 and 2007 and term bonds in 2012 and 2017.
Proceeds were used to buy equipment and install a natural gas distribution system.
Semi-annual debt service payments were due Dec. 1, though no bonds have been paid off as they matured over the years.
In August, the Utility District posted a notice stating that the Board of Commissioners had approved pursuing a tender offer to bondholders by Sept. 15.
The tender offer was never made, according to disclosures.
Most of the bonds are trading for pennies on the dollar.