BRADENTON, Fla. – With more than $1.7 billion of orders, bond buyers snapped up Jefferson County, Ala.’s refunding on Thursday with better-than-anticipated results, said County Commission President Jimmie Stephens.

Every maturity of the 25-year, $338.9 million limited obligation warrant deal was renegotiated, with some maturities lowered between five and 13 basis points, Stephens said.

Jefferson County Commission President Jimmie Stephens.
"We're pleased with the results," said Jefferson County Commission President Jimmie Stephens.

The deal sold with an all-in, true-interest cost of 3.38%. The county had anticipated a TIC of 3.6%.

“We’re pleased with the results,” said Stephens, who added that the deal attracted “a lot of institutional buyers.”

The refunding brought the county back to the bond market for the first time since emerging from bankruptcy in December 2013.

Stephens said the interest shown in the deal and the results “show we’ve gained the confidence of the investors. The market has reflected that.”

Thursday’s pricing came amid an ongoing legal challenge to the 1% local sales tax backing the warrants.

A group of local residents is asking the U.S. Supreme Court to review actions by the state Legislature, which passed a bill authorizing the sales tax and the refunding.

If the sales tax is struck down, Jefferson County has covenanted in the indenture to enact a replacement tax and ensure that debt service is paid.

The refunding warrants are rated AA with a stable outlook by S&P Global Ratings. Fitch Ratings assigned an A rating to the deal, and placed that rating on negative watch to reflect the potential legal challenge to the sales tax revenue pledged to bondholders.

The pricing scale on the deal was not immediately available. The final award will be Friday.

“It’s been a good day for the county,” Stephens said. “We’re now in a position to move the county forward.”

Raymond James and Associates Inc. and Stifel, Nicolaus & Co., are co-senior managers for the refunding. Citi, Drexel Hamilton, Piper Jaffray, and Securities Capital Corp. are also in the selling group.

Public Resources Advisory Group and Terminus Municipal Advisors are co-financial advisors.

Balch & Bingham is bond counsel. Waldrep, Stewart & Kendrick is disclosure counsel. Bradley Arant Boult Cummings is underwriters’ counsel.

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