Hospitality-Tax Deal on Tap

Greenville, South Carolina’s third-largest city, expects to sell $17.8 million of hospitality-tax revenue refunding and improvement bonds Tuesday . The bonds are secured by a junior-lien pledge of local hospitality taxes and are not backed by the city’s general revenues.

Greenville collects a 2% tax on restaurant food and beverage sales. The city has $4.9 million of outstanding certificates of participation that have a senior lien on the revenue.

Proceeds from the bonds will refund $15.8 million of 2001 COPs and provide $3.4 million of new money for tourism projects. The bonds will mature between one and 20 years, according to preliminary bond documents.

Moody’s Investors Service, which rates the bonds A1, noted that downtown Greenville is the largest business district in upstate South Carolina and is a popular hub for dining out with more than 90 restaurants and pubs. Greenville had an 8.7% unemployment rate in October. That compares with an 11.2% jobless rate in January 2010.

Moody’s is the only agency rating the bonds, according to Davenport & Co., the financial adviser. Standard & Poor’s rated Greenville’s general obligation bonds AA-plus in June 2009. Stephens Inc. is underwriter and Haynsworth Sinkler Boyd is bond counsel.

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