DALLAS — The Harris County Toll Road Authority is coming to market this week with the first of two sales expected this year to fund completion of the Sam Houston Tollway and extension of the Hardy Toll Road to downtown Houston.

With underlying ratings of Aa3 from Moody’s Investors Service and AA-minus from Standard & Poor’s and Fitch Ratings, the HCTRA plans to offer at least $220 million of senior-lien revenue bonds in a negotiated sale led by Siebert Brandford Shank & Co. and JPMorgan.

First Southwest Co. is the financial adviser to the authority and Andrews Kurth is bond counsel.

The bonds are secured by toll revenue and the authority also has about $65 million of outstanding subordinate-lien unlimited tax revenue bonds that are secured by property taxes with a subordinate lien on the tolls.

The authority collects tolls on 103 miles of highway in the Houston area, and the toll system has experienced heavy volume of late due to congested freeways as the area continues to grow. Harris County, which is the third most-populated county in the country, has added about 500,000 residents since 2000 and is now home to roughly 4.1 million people.

Following this week’s sale the HCTRA will have roughly $1.95 billion of debt outstanding.

Most of the issuers on this week’s Texas docket carry underlying ratings of AA of better, as the flight to quality continues.

Highly rated Carrollton will once again try to price $39.7 million of general obligation improvement and refunding bonds this week. 

Standard & Poor’s upgraded the North Texas town to AAA ahead of the sale. Moody’s rates the city at Aa2 while Fitch rates it at AA-plus. Analysts said the upgrade reflects “management’s strong general fund reserves, augmented by additional reserves in various funds, significant revenue-raising flexibility, and pro-active budget-cutting efforts in periods of revenue softness.”

The city’s diversified economic and employment base, very strong wealth and income levels, and participation in the Dallas/Fort Worth economy also help the credit, according to analysts.

Nearby Grapevine is bringing nearly $42 million to market this week in a two-tranche issue. The city plans to offer $26.8 million of general obligation refunding bonds and about $15.2 million of combination tax and tax-increment reinvestment zone revenue refunding bonds through negotiated sales led by Jefferies & Co. Southwest Securities Inc. and Coastal Securities Inc. are co-managers.

First Southwest is the financial adviser to the city and Vinson & Elkins LLP serves as bond counsel.

The GO bonds are structured as serials maturing 2010 through 2021, while the TIRZ bonds mature next year through 2016.

Officials anticipate coming back to market in a few weeks with about $9 million of certificates of obligation.

Grapevine carries underlying ratings of A1 from from Moody’s and AA minus from Standard & Poor’s. Moody’s also affirmed the rating on $134 million in debt outstanding, including the current offerings. Analysts said the city expects to achieve present value savings of 7.7% from the refundings.

The A1 rating reflects a large tax base with “a healthy socioeconomic profile, improving financial position, and manageable debt profile with rapid amortization,” Moody’s analysts said.

Grapevine’s tax base averaged 4.6% annual growth the past five years to $6.1 billion for fiscal 2009. And the city’s population of nearly 50,000 is up about 18% since the 2000 Census.

Nearly two-thirds of DFW International Airport is in Grapevine, which is about 20 miles from both Dallas and Fort Worth.

On the other side of Dallas, DeSoto has a two-tranche issue worth about $18.5 million set to come to market today.

The growing city will offer $9.5 million of general obligation improvement and refunding bonds and $9 million of combination tax and revenue certificates of obligation in negotiated sales with Southwest Securities as lead manager and Siebert Brandford Shank as co-manager.

First Southwest is the city’s financial adviser and Fulbright & Jaworski LLP is bond counsel.

Fitch assigned a AA-minus rating to the sale and affirmed the rating on $66.4 million of debt outstanding. Analysts said the rating reflects the city’s “continued ample general fund reserve levels, solid tax base, and manageable direct debt profile.”

DeSoto’s current population of nearly 48,000 is up more than 25% since 2000. The city is about 16 miles south of downtown Dallas.

Fitch said DeSoto’s taxable-assessed value rose slightly more than 6% annually since fiscal 2004 due mostly to new residential construction. And there’s room for continued growth as the city is only about 60% to 65% built out, according to analysts.



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