DALLAS -- Indianapolis' upcoming $68 million bond sale marks a return to property tax-backed debt borrowing for the city after an eight-year absence.
The new money bonds include a tax-exempt series for $55.8 million. A second series for $11.9 million of taxable bonds will also be sold.
The Series 2017A and B are general obligation bonds will be issued by the Indianapolis Local Public Improvement Bond Bank.
They are scheduled to price on Wednesday.
Bank of America Merrill Lynch is the lead underwriter and RBC Capital Markets is the co-senior manager. Sycamore Advisors is the municipal advisor. Fitch Ratings rates the bonds AAA and S&P Global Ratings rates them at AA.
The bonds are secured by the property taxes collected by city entities that benefit from the bonds. The proceeds will fund projects that are essential to the delivery of city services, Sarah Riordan, executive director and general counsel of the bond bank, said in an investor presentation.
"One portion is taxable due to the nature of the underlying expenditure," said Riordan.
Last October, Indianapolis saw $410 million of moral obligation debt that financed non-essential projects downgraded to Aa3 from Aa2.
Riordan said during the investor presentation that the bond bank recently adopted a debt management plan helps guide and focus debt issuance decision through the use of industry best practices and conservative fiscal management.