BRADENTON, Fla. Louisiana Treasurer John Kennedy is urging state agencies to quickly prepare bond transactions for sale in November or early December out of concern that interest rates will spike before the end of the year.
“Rates could go up at any point now that things seemed to settle down in D.C.,” Kennedy told Michael Bridges of the Louisiana Department of Transportation and Development at a State Bond Commission meeting Thursday.
The DOTD received preliminary approval to issue up to $200 million of unclaimed property special revenue bonds for widening and improving portions of Interstate 49, which will link ports in the southern part of the state to the Midwest.
Bridges said the DOTD planned to issue the bonds in several series, with an $85 million tranche selling before the end of the year. That will require getting final approval for the deal from the Bond Commission next month before the bonds can be sold.
Since the next SBC meeting is not until Nov. 21, Kennedy said he would call a special meeting to approve the transaction earlier.
Kennedy also urged Bridges to sell the deal no later than the first week of December to avoid the typical slowdown in the bond market that occurs because of the holidays.
During an update on the use of credit lines for capital outlay expenses, a representative from the governor’s office said the state would probably sell $104.8 million of general obligation bonds for reimbursement purposes late this year or in early January.
Waiting until January to issue the bonds would be “a big risk,” Kennedy said, adding that he would like to see the bonds sold by the end of November.
In other action, the commission approved the award of $227 million of state GO refunding notes to JPMorgan. The deal, which was delayed due to negative market conditions, brought about $9 million in present value savings.
The SBC also approved the sale of $100 million of 30-year revenue bonds by the Lake Charles Harbor and Terminal District. Bond proceeds will be used to finance harbor and terminal facility improvements. The deal will be underwritten by Jefferies LLC.
Altogether the Bond Commission approved nearly $160 million of bonds for various projects statewide, in addition to two local refundings that will provide more than $814,000 in savings.