BRADENTON, Fla. - JEA in northeast Florida today is marketing to institutional investors$104 million of new-money senior and subordinate revenue bonds and $57 million ofrevenue refunding bonds, all for its water and sewer systems.
Retail orders were taken yesterday.
The $51.4 million of water and sewer system revenue bonds, Series 2003A, the $56.7million of water and sewer system refunding revenue bonds, Series 2003B, and the $52.6million of water and sewer system subordinated revenue bonds, Series 2003C, are insuredby Ambac Assurance Corp.
The Series A and C bonds have maturities through 2043 and are being issued to pay costsof construction and acquisition of additions, extension, and improvements, including theprospective purchase of water and sewer systems owned by Florida Water Services Corp.,the state's largest privately owned water and sewer utility company.
JEA, formerly Jacksonville Electric Authority, is negotiating with Florida Water forassets serving about 5,488 water customers and 5,009 sewer customers, with an expectedpurchase price "not in excess of $25 million," according to bond documents.
"Part of the proceeds of the Series C bond issue is earmarked for acquisition" ofFlorida Water's assets, said JEA capital project financing manager Hugh Van Seaton.
The Series B bonds will current refund JEA's Series 1997A bonds for present-valuesavings exceeding 7% to decrease debt service payments within existing maturitiesthrough to 2037, Seaton said.
Citigroup Global Markets Inc. is heading up today's sale. Other underwriters are Bear,Stearns & Co., J. P. Morgan Securities Inc., Banc of America Securities LLC, Goldman,Sachs & Co., Lehman Brothers, Merrill Lynch & Co., Morgan Stanley, and UBS FinancialServices Inc.Public Financial Management Inc. is the financial adviser. Rogers Towers PA andLawrence, Parker & Neighbors LLC are co-bond counsel. Underwriters' counsel is BryantMiller & Olive PA.
JEA is an independent agency of Jacksonville, a city consolidated with Duval County innortheast Florida. Although it is one of the most frequent issuers in the state, theelectric utility is owned and operated separately from the water and sewer system.
"I think the management of JEA continues to impress us with their long-range planningand their ability to absorb system growth and manage the capital needs," said KarlJacobs, an analyst with Standard & Poor's, which rated all three series A-plus.
Jacobs noted that JEA has acquired and integrated other utilities in the past, so hedoes not expect the planned acquisition of Florida Water's assets to be a challenge.
Fitch Ratings assigned a AA to today's deal. Moody's Investors Service rated the SeriesA and B bonds Aa3 and assigned the Series C bonds an A1 rating.
