DALLAS — Louisiana State Bond Commission Thursday approved a $400 million state general obligation bond issue in 2012, along with a GO refunding tranche of up to $49 million.
The new money issue will reimburse the state for expenditures from lines of credit that were used to develop a long list of capital outlay projects approved by the Legislature. The reimbursements occur as projects are completed and become operational.
Both tranches are expected to go to market by late February 2012.
The maximum refunding amount was raised from $47.8 million on the original agenda to $49 million on the final version. Commission director Whit Kling Jr. said the final total is expected to be approximately $48 million.
“We are asking for the $49 million ceiling as a safety feature,” he told the commissioners. “There’s a $90,000 interest payment due May 15, 2012, and the decision is whether to leave it there or take it out with this refunding.”
Kling said the refunding will take out a portion of $58 million in outstanding debt from a 2001 issue.
State financial advisor Renee Boicourt of Lamont Financial Services Corp. said the refunding should result in a net present value savings of 9.5%.
“That would be a savings of $1 million a year,” she said. “It is very much in the state’s advantage to proceed.”
Louisiana’s GO bonds are rated Aa2 by Moody’s Investors Service and AA by Fitch Ratings and Standard & Poor’s.
The state has $2.4 billion of outstanding GO debt and $449.1 million of outstanding appropriations-backed debt.
Louisiana sold $300 million of GO bonds in March 2011, the first new-money debt the state had issued since 2009. A $180 million tranche of GO refunding bonds went to market in May 2011.
In his monthly report on Louisiana’s remaining Gulf Opportunity Zone bond capacity, Kling said all but $181 of the original $7.84 billion allocation of the tax-exempt private activity bonds has been awarded by the commission.
The program will expire Dec. 31. It had been scheduled to expire at the end of 2010, but Congress extended the hurricane-recovery effort late last year.
Louisiana had $383.8 million of unallocated GO Zone bond capacity remaining at the beginning of 2011.
The Denham Springs Economic Development District in Livingston Parish received permission to issue $47 million of revenue refunding bonds. The refunding will cover fixed and variable-rate bonds issued in 2007 and 2008 that financed construction of a Bass Pro Shop.
In another approval, Louisiana Community Development Authority will issue up to $38 million of subordinate lien revenue bonds for East Baton Rouge Parish’s road improvement program. Proceeds will be dedicated to building new roads and widening existing ones.
The commission approved holding a number of bond elections on March 24, including one for a 1.5 mill tax increase in West Feliciana Parish to support $3.5 million of GO bonds to build and equip a new library.
