BRADENTON, Fla. Orange County, Fla., will competitively price $148 million of tourist-development tax refunding revenue bonds Tuesday as tax collections appear to be stabilizing from recessionary lows last year.
Proceeds will refund portions of 1998A and 1998B TDT bonds that originally financed land, design, and site improvement costs for an expansion of the Orange County Convention Center, which is now the nations second-largest facility of its kind.
The current refunding is for debt-service savings with no extension of maturities. The estimated present-value savings is expected to be about $8 million, or 5%, of the refunded par amount.
The offering is structured to achieve level debt savings through maturity in 2024. Insurance is at the option of bidders, a customary feature of Orange County TDT deals.
Were basically just continuing a refunding process we started last year, said Fred Winterkamp, the countys manager of fiscal and business services. Interest rates are even more favorable this year and nothing has changed in our credit except our collections are even better, which gives us better coverage.
Pledged tourist development tax revenues fell 15.7% in fiscal 2009, the first decrease since 2002. Maximum annual debt service was 1.55 times.
In the current fiscal year there are signs of stabilization in tourist taxes, which are collected for short-term accommodations such as hotels and motels.
From February to July, monthly collections exceeded those recorded for the same period of 2009. The largest uptick occurred in July, which saw an increase of 23.4% in collections over July 2009. The gain was partly due to the late-June opening of the new Wizarding World of Harry Potter attraction at the Universal theme park in Orlando.
July also was the second-busiest month of the year at Orlando International Airport, which saw the number of travelers it handles increase 5.32% to more than 3.26 million. Airport officials reported a 1.76% gain in year-to-date traffic from the same period of 2009.
David Moore, managing director at Public Financial Management Inc., which is co-financial adviser with M2 Management Inc., said that with interest rates low and tourist development tax revenue improving, this is the right time to bring the deal to market.
People look to the underlying strength of the credit in the market so I think the bonds will be well received by investors, he said.
The bonds are rated AA-minus by Fitch Ratings and A-plus by Standard & Poors.
Greenburg Traurig PA and Debi V. Rumph are co-bond and disclosure counsel for the transaction.