CHICAGO - Minnesota is considering issuing $42 million of revenue bonds for the state's emergency communications network through negotiation - a rare event for the state - and will accept proposals from underwriters interested in joining the transaction until tomorrow afternoon.
Officials are still considering their options for the delayed sale and want to see pricing and sale proposals from potential underwriters. The offering originally was planned for earlier this month but put off amid market turmoil.
"We want to see what kinds of proposal come in. We think this deal could be very attractive to retail, but we have not decided whether we will move forward with a negotiated or competitive sale," said Kathy Kardell, assistant treasury commissioner.
Minnesota state has not used a negotiated sale in recent memory. That's primarily due to the fact that the triple-A rated state issues most of its debt with a general obligation pledge and is required to use competitive sales under its GO statutes.
The rare revenue bond sale would be secured by a surcharge paid by wired and wireless telephone customers in the state and would carry a 15-year maturity. The state hopes to enter the market next month. Proposals are due to the Finance Department by 4:00 P.M. Central Time on Wednesday.
Proceeds will provide continued funding for a statewide digital radio communications system for public safety personnel. The system, which enables emergency response organizations to utilize a single, integrated and highly structured digital radio communications system, has been in the works for years. Planning and development of the first phase of the project began in 1995 - long before the 2001 terrorist attacks highlighted the need for such systems - when the state formed the Metropolitan Radio Board.
Officials also expect to decide as soon as tomorrow on whether to proceed later this month with a competitive GO sale worth $443 million. Finance officials are looking for other issuers with deals of more than $100 million on the day-to-day calendar to enter the market with competitive sales.
If Minnesota does not get into the market before the end of the month, the GO sale would be put off until next year due to disclosure issues. The state needs to close on the transaction at least 25 days before its official November revenue forecast is released in early December. It issues two formal forecasts annually, in November and February.