DALLAS — Several Texas issuers will try and price refundings this abbreviated week after a $1 billion refunding was shelved.

The North Texas Tollway Authority considered issuing $1 billion of second-tier revenue refunding bonds but postponed the sale citing “uncertain market conditions” due, in part, to the shortened week. Markets were closed Monday for the Memorial Day holiday.

Lehman Brothers and Citi were slated to lead the negotiated sale that will take out some Series 2007 bond-anticipation notes issued on behalf of the State Highway 121 project.

RBC Capital Markets is the financial adviser to the NTTA. McCall, Parkhurst & Horton LLP and Simmons Mahomes PC are co-bond counsel.

Standard & Poor’s assigned a BBB underlying rating to the issue due to the subordinate payment obligation of the bonds. Moody’s Investors Service assigned its A3 rating.

Dallas is bringing $161.4 million of waterworks and sewer system revenue refunding bonds to the competitive market this week.

First Southwest Co. and Estrada Hinojosa & Co. are co-financial advisers to the nation’s ninth-largest city

Moody’s assigned an Aa2 rating while Standard & Poor’s assigned a AAA rating to the sale.

Standard & Poor’s upgraded its underlying rating on Dallas’ water and sewer debt to AAA earlier this month, citing the “city’s continued solid financial performance in its role as the regional water provider, despite a sizeable capital improvement program and periodic weather-related fluctuations.”

Cleburne is bringing $11.4 million of general obligation refunding bonds to market today through a negotiated offer led by Banc of America Securities LLC and Southwest Securities Inc.

Director of finance Greg Wilmore said the refunding could result in “net-present value savings of 11.8%, saving about $727,000 over the life of the bonds … so, it’s well worth our while” to refund the debt in the current market.

The bonds, which are expected to be insured, are structured as serials with final maturity in 2018.

First Southwest is the financial adviser to the city about 30 miles south of Fort Worth.

While Cleburne’s population has grown by a modest 4% the past five years, the taxable assessed value of the city has risen nearly 51% to $1.75 billion for fiscal 2008 from $1.16 billion for fiscal 2005. Officials also have increased the general fund balance over that time to nearly $6.7 million last year from $2 million five years ago.

Fitch Ratings assigned an A-plus rating to the sale and revised its outlook on the city’s credit to positive from stable. Analysts said the outlook change is “the result of strong development activity, both industrial and commercial, much of which is related to natural gas drilling activity in the Barnett Shale, considered one of the largest natural gas reserves” in the U.S.

Fitch said the construction of the southern section of SH 121, which will provide a direct link to Fort Worth, is expected to be completed in 2010 and further increase the city’s development.

On the other side of Fort Worth, Northwest Independent School District today plans to offer the final tranche of debt from a 2005 bond package.

The district will issue about $57.2 million of unlimited tax school building and refunding bonds through a negotiated sale led by RBC Capital Markets. Morgan Keegan & Co. Inc. and Southwest Securities Inc. are co-managers. First Southwest is the financial adviser to the school system and McCall, Parkhurst & Horton is bond counsel.

The refunding bonds take out some capital appreciation bonds and are expected to result in savings of about $2 million for the district, according to chief financial officer Jon Graswich.

The bonds, which will be backed by the triple-A rated enhancement of the state’s Permanent School Fund, are structured as serials reaching final maturity in 2033.

Moody’s Investors Service upgraded its underlying rating on the district to Aa3 from A1 due to a rapidly expanding tax base and an “established trend of notably strong general fund reserves.”

Analysts said the higher rating, which also applies to $398.6 million of parity debt outstanding, takes into into consideration high debt burdens that will likely remain elevated.

The district carries an underlying rating of AA-minus from Fitch.

Graswich said the growing district will likely be issuing debt each spring for the next 20 years. And voters approved a $260 million bond package earlier this month for seven new elementary schools and a middle school, technology upgrades, and renovations to existing facilities.

The school district currently serves nearly 12,000 students at 17 campuses in 14 municipalities across Tarrant County, Denton County, and Wise counties. But demographics studies show enrollment climbing as high as 90,000 students by 2027.

Brazos County Health Facilities Development Corp. is offering $30 million of revenue bonds on behalf of the St. Joseph Regional Health Center at some point this week.

Merrill Lynch & Co. is lead manager for the negotiated sale.

In the competitive market this week, League City plans to issue $15.5 million of combination tax and revenue certificates of obligation to upgrade streets and drainage on the heels of an upgrade from Standard & Poor’s.

First Southwest is the financial adviser to the Gulf Coast city of nearly 70,000.

Standard & Poor’s raised its underlying rating on the city to AA from A-plus due to continued tax-base growth and diversification, as well as a “consistently strong financial position.”

Analysts said League City “has benefited from the Houston metropolitan statistical area’s strong residential and commercial expansion.” The city is about 25 miles southeast of downtown and its assessed valuation is up almost 60% the past five years to $4.4 billion for fiscal 2008.

Only about half the city is currently developed, so “substantial land remains available to absorb growth,” according to analysts. And officials expect continued growth in value as several new master-planned, more-expensive residential communities near completion.

Moody’s assigned a Aa3 rating to this week’s sale. 



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