The Miami City Commission next week is expected to consider refinancing a two-year, $45 million note that was taken as part of the city’s contribution toward building tunnels to the Port of Miami for cargo truck and leisure traffic.
The city is proposing to pay off the note with a negotiated, limited public offering with Wells Fargo Bank NA as underwriter. Wells Fargo now holds the note.
Full payment on the note is due in early January, and some commissioners were concerned about the tight timeframe to market the bonds.
Commission chairman Francis Suarez complained that the deadline for payment has been known for some time, yet the board is in an emergency situation to determine a course of action to prevent a default.
“We don’t have a pool of money” to make the full payment, he said. “I hope that we get the best deal for the residents of the city of Miami.”
Suarez also questioned whether the city could go forward because of ongoing investigations by the Securities and Exchange Commission.
The SEC is reviewing whether the city violated disclosure requirements by not telling investors about budget problems in deals several years ago, and is also investigating the financing of the Marlins’ baseball stadium by the city and Miami-Dade County.
Miami chief financial officer Janice Larned said she felt that the bonds could be marketed in time to meet the city’s needs.
She told commissioners that renewing the loan with Wells Fargo was an option, but it was decided to try to capture low interest rates in the bond market.
The new schedule calls for bringing back the resolution to hire the underwriter at the Oct. 25 meeting, and considering the bond resolution Nov. 15, according to Larned.
The bonds would price the first week of December, and close no later than Dec. 20.