The Houston City Council on Wednesday increased the capacity of a commercial paper program for the combined utility system to $1.5 billion from $1 billion and approved issuing up to $500 million of the short-term debt through provider Morgan Stanley.
The capacity boost in the Series B program was needed to accommodate the utility system's large capital improvement plan,
"We have to have appropriation capacity in place so that we can ... enter into contracts to get the work going and started, and then we'll use the commercial paper lines to also pay our invoices for those projects," she said. "Ultimately, usually annually, we do a bond issuance where we refund the commercial paper into long-term fixed rate debt."
The council also signed off on issuing up to $345 million of tax and revenue anticipation notes via competitive bidding in August.
"We currently project that the initial issuance will be between $150 and $345 million approximately and this amount, based on preliminary cash flows for FY 2027, will continue to be conservatively refined until the pricing in August," according to a city council meeting document.
The notes, which address a temporary cash shortfall ahead of the flow of property tax revenue, must be paid off by the June 30 end of fiscal 2027.
In October, the nation's fourth-largest city
