The Massachusetts School Building Authority last week approved new pools of senior managers and co-managers to work on future debt sales.
The new senior managing team includes: Bank of America Merrill Lynch, Barclays Capital, Citi, Goldman Sachs & Co., Jefferies & Co., JPMorgan, Morgan Stanley, and Ramirez & Co.
The co-managing group includes: Corby Capital Markets Inc., Edward Jones, Fidelity Capital Markets, Janney Montgomery Scott LLC, Loop Capital Markets LLC, M.R. Beal & Co., Morgan Keegan & Co, Piper Jaffray & Co., Raymond James & Associates, RBC Capital Markets, Siebert, Brandford Shank & Co., Stern Brothers & Co., and Wells Fargo Securities.
There is no specific termination date for the contracts, but the MSBA anticipates using the investment firms on a case-by-case basis for approximately three years, according to director of communications Emily Mahlman.
The authority anticipates selling $500 million in the next several months and will select a book-runner for the deal from its new pool in the next several weeks, Mahlman said.
The MSBA’s bonds are backed by a dedicated portion of the state’s 6.25% sales tax. The agency has a gradual phase-in of the dedication and will receive its full, one-cent dedication in fiscal 2011. For fiscal 2010, which began July 1, the MSBA receives 95% of the one-cent dedication.
The authority anticipates receiving $600 million to $625 million of sales tax revenue for this fiscal year, down from the $702 million it got in fiscal 2009.
Last year was the final year that the state provided a guaranteed minimum to the authority, which included using general fund revenues to augment its sales tax dedication.
Now the MBSA will receive its allocation without any assistance from the general fund, regardless of how the sales tax performs.
While it won’t receive as much revenue from the state as in the past, authority officials hope that better borrowing rates with help offset the sluggish sales tax revenue.
“We expect to be a beneficiary of a very attractive interest rate environment which will keep our borrowing costs down,” Mahlman said.
The MSBA says it does not anticipate any refinancings at this time.