DALLAS — Volume picks up this week in the Texas municipal market with two school districts pricing new-money issues and a few deals by state and county issuers.

In the week’s largest offering, Harris County plans to issue $184.3 million of refunding bonds in three tranches. It expects to price $33.9 million of permanent-improvement refunding bonds and $35.4 million of unlimited-tax road refunding bonds, with the Harris County Flood Control District issuing $115.2 million of contract-tax refunding bonds. Morgan Keegan & Co. is lead manager for the negotiated sales. First Southwest Co. is the county’s financial adviser.

Fitch Ratings assigned an AA-plus rating to all three sales and affirmed the rating on the county’s outstanding debt, citing a sound financial position, conservative fiscal management, and substantial and growing taxable resources.

Analysts said the county faces some “growing financial pressure to provide adequate staffing for its large adult- and juvenile-detention systems,” as well as continued rapid population growth in unincorporated areas that poses “additional challenges to provide infrastructure and service needs.”

In November, Harris County voters approved another $435 million of debt. Rating analysts said the county’s volume of authorized but unissued debt is high, but “continued moderate gains in taxable assessed valuation should keep debt levels manageable.”

Harris County, which includes Houston, is the largest in the state and third-largest in the country with a population of about 3.9 million.

The Texas Public Finance Authority will competitively offer $20.2 million of revenue bonds Thursday on behalf of Stephen F. Austin University.

First Southwest is the financial adviser to the state agency and Fulbright & Jaworski LLP is bond counsel.

Kim Edwards, executive director of the TPFA, said proceeds will fund an education research center for the school of education, which is one of the fastest growing parts of the university.

She also said the university has begun a charter school on campus that will double as a laboratory for students within the education school to gain “valuable on-site training.”

Edwards said insurance for the bonds will be at the bidder’s option, and the debt structure includes an early maturity.

“We have a short, six-week maturity there in April 2008,” she said. “The level of debt service appropriated for this year provided us with that opportunity, and we think it may make the bonds a little more attractive for people looking for a short-term investment while it should also lower our [total interest cost].

Fitch assigned an A-plus rating to the sale and revised its outlook on revenue-financing system debt issued for the East Texas university to stable from negative.

Analysts said the revision reflects the university’s “proven ability in managing the operational and financial risks associated with the implementation of a comprehensive, multi-year capital improvement program.”

Moody’s Investors Service rates the debt at A and Edwards said the agency is expected to confirm that rating today.

Stephen F. Austin is in Nacogdoches with a total enrollment of nearly 12,000 students.

Alto Independent School District is bringing $6.3 million of unlimited-tax school building bonds to the competitive market today. Proceeds will fund construction of a new elementary school.

Coastal Securities is the financial adviser to the small East Texas district, which is about 25 miles west of Nacogdoches.

The bonds will be backed by the state’s triple-A rated Permanent School Fund.

Standard & Poor’s assigned a BBB underlying rating to the sale, citing the district’s limited property-tax base, below average income levels, and slightly above-average debt level. Some offsetting credit strengths include access to the nearby economies of Lufkin and Nacogdoches, a solid financial position with health reserves, and limited additional capital needs, according to analysts.

The district serves a total population of nearly 3,350 with a student enrollment of about 600. Officials expect the student population to remain flat over the next several years, according to analysts.

In the competitive market Tuesday, Travis County plans to offer a three-tranche deal worth $50.2 million. The central Texas county will issue about $23.2 million of unlimited-tax road bonds, another roughly $23.2 million of certificates of obligation, and $3.8 million of permanent-improvement bonds.

D. Ladd Pattillo is the financial adviser to the county, which is home to the state capital of Austin. Proceeds will fund upgrades to roads, parks, and facilities across the county, which carries natural triple-A ratings.

Moody’s also affirmed the Aaa rating on the county’s $536 million of debt outstanding. Analysts said the highest rating reflects “a large and dynamic economic base, which is in the midst of solid tax base growth; ample financial reserves, and low direct debt levels despite historically frequent debt issuance.”

Standard & Poor’s analysts said the county’s property-tax base “has experienced remarkable growth over the past three years” with the assessed value rising 12.6% since fiscal 2007 to $84.9 billion. Preliminary estimates show another year of sustained growth for fiscal 2008 to $89.7 billion, according to analysts.

Travis County’s total population is about 950,000.

Austin is the fourth-largest city in Texas and ranked as the third fastest-growing city in the nation from 2000 through 2006, according to the Census Bureau. The city is now home to nearly 730,000 with a metro area of more than 1.5 million residents across a handful of counties in central Texas.

The Plano Independent School District plans to offer $58.3 million of unlimited-tax school building bonds through a competitive sale Tuesday.

First Southwest is the financial adviser to the North Texas district and McCall, Parkhurst & Horton LLP is bond counsel.

The bonds, which come to market with the triple-A wrap provided by the state’s Permanent School Fund, are structured as serials reaching final maturity in 2033.

This week’s sale exhausts a $285.7 million bond package passed by voters in 2004, and officials are planning to put another referendum on the ballot in May.

The proposed bond package of $490 million would be the largest called for by the district. New residential development on the east side of the district necessitates more schools being built there and much of the proposed bond package addresses those needs.

Plano’s current population of about 270,000 is up more than 21% since the 2000 Census.

In addition to Plano, the school district draws students from the cities of Dallas, Richardson, Parker, Murphy, and Allen, and serves a total population of about 380,000.

The district currently has 68 campuses and a total enrollment of nearly 54,000.


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