BRADENTON, Fla. - Miami-Dade County on Thursday is closing on a $136.3 million special obligation bond sale that sold entirely to retail investors last week, the first time in some 30 years local officials remember that occurring.
The county also sold $45.16 million of taxable Build America Bonds, the first time Florida's largest local governmental issuer has used the direct-subsidy bond program from the federal stimulus act.
Raymond James & Associates Inc. led a syndicate of 11 banks, which priced the capital-asset acquisition special obligation bonds a week ago.
The retail offering period for the $136.3 million of tax-exempt debt began at approximately 9:30 a.m. Eastern Time last Tuesday and all the bonds were sold to retail by about 3 p.m., according to Sergio Masvidal, a senior managing consultant at Public Financial Management Inc., the county's financial adviser on the transaction.
The tax-exempt bonds were sold with serial maturities running from 2010 through 2027, and term maturities of $12.3 million due in 2029, $12.7 million due in 2034, and $12.8 million due in 2039. The bonds are callable at par in 2019. They sold with a true interest cost of 4.71%.
Serial maturities sold with yields ranging from 0.85% with a 3% coupon in 2010 to 3.79% with a 4% coupon in 2017 and 5.01% with a 5% coupon in 2027.
The deal was structured primarily based on project type and the useful life of each project, "not so much to attract retail," Masvidal said.
Final orders for the $45.16 million of BABs, with a 35% federal subsidy to Miami-Dade, also were taken last Tuesday. BAB rates were locked to Treasuries at noon.
The BABs were sold as four term bonds with a 10-year call-at-par provision. Yields ranged from 6.05% in 2022 to 6.72% in 2029, 6.87% in 2034, and 6.97% in 2039. The true interest cost on the combined maturities after the subsidy was 4.49%.
Compared to tax-exempt bonds sold with the same maturities, the taxable BAB subsidy is estimated to save the county about $220,000 a year, or approximately $6.6 million for the term of the bonds, said Masvidal, noting that the county plans to use the subsidy to offset the semiannual debt service payments.
All of the bonds are secured by Miami-Dade's covenant-to-budget and appropriated from available non-ad valorem revenue. They are insured by Assured Guaranty Corp.
The underlying debt was rated A1 by Moody's Investors Service and A-plus by Standard & Poor's.
Bond proceeds are being used for a variety of projects, including $62.7 million for port dredging, terminal projects, and related improvements; $45 million for Jackson Memorial Hospital, and $54.2 million for various capital and technology projects.
Other underwriters on last week's sale were Estrada Hinojosa & Co., Citi, Jackson Securities, JPMorgan, Loop Capital Markets LLC, Morgan Keegan & Co., Morgan Stanley, M.R. Beal & Co., Ramirez & Co., Rice Financial Products Co., and Siebert Brandford Shank & Co.
Greenberg Traurig PA and Edwards & Associates PA were co-bond counsel. Hogan & Hartson LLP, McGhee & Associates LLC, and Jose A. Villalobos PA were disclosure counsel. Underwriters' counsel was Akerman Senterfitt.