BRADENTON, Fla. – Louisiana saw some of its highest savings to date on a $358 million refunding that was more than three-times oversubscribed, according to State Bond Director Lela Folse.
Folse told the State Bond Commission Thursday that the negotiated gasoline and fuels tax revenue refunding attracted more than $1 billion in orders.
The deal priced Wednesday. Closing is scheduled for Aug. 30.
“There was a lot of demand for our bonds,” she said, adding that the deal saw net present value savings of $35 million or 9.46%, “which is one of the highest we’ve ever achieved.”
The underlying bonds were issued as part of the Department of Transportation and Development’s Infrastructure Model for Economic Development program to fund transportation and bridge projects.
The $5 billion TIMED program began in 1989 after voters statewide approved a 4-cent per gallon tax.
The DOTD will see gross savings of $54 million through maturity in 2045 as a result of the refunding, Folse said.
The deal had previously been postponed because the refunding had moved out of the money, but that changed over the last couple of weeks.
“This all came to fruition primarily because the markets were in our favor,” said State Treasurer Ron Henson. “There were a lot of moving parts.”
The refunding bonds sold in two series, as $60.7 million of senior-lien debt and $297.4 million of second-lien debt.
Moody's Investors Service rated the senior-lien bonds Aa2 and the second-lien bonds Aa3, while both series were rated AA by S&P Global Ratings.
Both have negative outlooks on the refunding bonds, which is tied to the negative outlooks on Louisiana’s general obligations bonds because of the state’s depressed economy.
Lamont Financial Services Corp. was the state’s financial advisor on the deal.
Citi was the senior managing underwriter. Co-managers were Jefferies LLC, Raymond James & Associates Inc., and U.S. Bankcorp.
Foley & Judell was bond counsel.
Breazeale, Sachse & Wilson was underwriter’s counsel.
Louisiana expects to be back in the bond market next month to sell up to $341 million of GOs.
