Louisiana bond commission approves $775 million refunding

City of Baton Rouge

The Louisiana State Bond Commission approved East Baton Rouge Sewerage Commission's $775 million refunding and tender plan Thursday. 

The sewerage commission's refunding will impact Series 2020A and Series 2020B taxable Louisiana Community Development Authority bonds. 

The sewerage commission will replace the taxable bonds with tax-exempt bonds to generate savings. Savings will depend on participation of current bondholders, Bond Commission Assistant Director Conner Berthelot said in a memo.

The Series 2020A and Series 2020B bonds mature in 2048 and 2039, respectively. The refunding bonds will have the same maturities. 

The East Baton Rouge Sewerage Commission is considering advance refunding "a portion of the bonds (not tendered) by placing proceeds of the proposed issuance into escrow, which will be used to pay bondholders through maturity," Berthelot said.

BofA Securities will serve as underwriter on the transactions. Butler Snow LLP is the bond counsel.  

In other business Thursday, the bond commission approved the state developing a plan to convert or refund Series 2022A gasoline and fuels tax second lien revenue refunding bonds.

The current bonds are variable rate with the interest rate set daily at 70% of SOFR plus 50 basis points. They are callable Nov. 1 and subject to mandatory tender on May 1, 2026. They mature in 2043. $117 million is outstanding.

For the refunding or conversion, the state is using PRAG as municipal advisor and Foley & Judell as bond counsel. 

The state plans to select a bank and adopt a preliminary resolution at the Oct. 16 bond commission meeting and adopt the final resolution at the Nov. 20 meeting.