BRADENTON, Fla. - Jacksonville, Fla., on Thursday will competitively price approximately $109 million of Better Jacksonville sales tax revenue bonds.
Proceeds will be used to finance or reimburse the city for expenses related to the acquisition and construction of capital projects associated with the Better Jacksonville plan, a 10-year, $2.25 billion infrastructure improvement program. The city consolidated with Duval County in 1968, growing from 39 square miles to 841 square miles in size, making it the largest city in land area in the U.S.
All-or-none bids will be taken until 10 a.m. Eastern time Thursday on i-Deal's Parity electronic bidding platform. The 2008 bonds will be awarded by 1 p.m. However, the city reserves the right to cancel the competitive sale and enter into a negotiated sale, or reject any and all bids, according to bond documents.
Jacksonville pre-qualifies underwriting firms that want to participate in the city's bond sales. To date, 18 firms have been qualified by the city to bid in this week's sale. Other firms can pre-qualify but must do so at least one day before the sale by contacting city Treasurer Michael Givens or David Moore at Public Financial Management Inc., the city's financial adviser.
The 20-year, fixed-rate bonds will be secured by a 30-year, half-cent sales tax enacted by local voters in 2000. The bonds are expected to be issued serially, although bidders can designate term bonds. Bonds maturing on Oct. 1, 2019, or after are subject to optional redemption after Oct. 1, 2018.
Jacksonville does not intend to procure municipal bond insurance on any portion of the 2008 bonds, which have been rated Aa3, AA, and AA-minus by Moody's Investors Service, Fitch Ratings, and Standard & Poor's, respectively.
"This might have been a deal we would have looked at insuring before, but Mickey Miller, our [chief financial officer], is of the opinion that with a clean double-A rating the bonds would market well without insurance," Givens said.
Givens said the city is selling this deal, and $54.5 million of special revenue bonds in a competitive offering later this month, in an attempt to close both transactions before the end of the fiscal year. He expects this week's sale to be well received.
"We think there's going to be an appetite for a clean, double-A, straightforward credit and we're hoping to get good results," Givens said.
While Jacksonville has experienced some slowing in the sales tax revenue stream due to the lagging economy and downturn in housing sales, rating analysts believe debt service coverage will remain strong. The city is expected to be impacted less by the economic problems than other areas of Florida because it is less dependent on tourism, Givens said.
The bonds being sold this week will be on parity with outstanding debt sold in 2001, 2003, and 2004. Estimated principal and interest debt service on the 2008 bonds and outstanding parity debt is $1.17 billion through 2030.
Bryant Miller Olive PA and Lawrence & Parker PA are co-bond counsel. Greenberg Traurig PA and Reginald Estell Jr. PA are co-disclosure counsel.