BRADENTON, Fla. - Orange County, Fla., will competitively price $282 million of highly rated tourist development tax-backed revenue bonds Tuesday.
Bond proceeds will help complete a 1,700-seat acoustic hall as part of the second stage of projects at the Dr. Phillips Center for Performing Arts and advance refund all of the city of Orlando's outstanding 2014 contract TDT bonds.
The deal will be structured as $82.5 million of Series A new-money bonds and $198.2 million of Series B advance-refunding bonds with maturities between 2025 and 2036.
The bonds are rated AA by Fitch Ratings, Aa3 by Moody's Investors Service, and AA-minus by S&P Global Ratings.
In addition to completion financing for the acoustic hall, Fiscal and Business Services Manager Fred Winterkamp said the refunding will improve cash flow for the county's obligations.
"This will provide cash flow in future years so we won't have to bond for additional projects," he said. "We don't know yet if there are going to be savings. It will depend on where market is at pricing."
Bids will be received electronically via the iDeal Parity/Bidcomp competitive bidding system.
After the deal, Winterkamp said TDT funds will continue to pay off bonds issued for the Orange County Convention Center and finance county projects.
"To me the interesting part of the deal is that this is the evolution of the community venues project started 12 years ago," said financial advisor David Moore, managing director at Public Financial Management Inc., referring to a trio of Orlando projects that originally financed an event center, Citrus Bowl renovations, and the performing arts center.
Greenberg Traurig and the Law Offices of Debi V. Rumph are co-bond counsel.
All three rating agencies have stable outlooks on the TDT bonds.
Analysts noted that the Orlando-Orange County economy is diverse and that tourist tax revenues collected on short-term accommodations continue to grow due to strong demand for hotel rentals.
Last year, the county saw a record 66 million visitors partly because of expansion at central Florida mega-theme parks such as Walt Disney World and Universal Studios.
"These credit strengths are offset, in our view, by the vulnerability of TDT revenues to downturns in national and global economic conditions that affect tourism and travel," said S&P analyst Hilary Sutton.
Fitch analyst Larry Levitz said TDT bonds currently have about 2.3 times pro forma debt service coverage and that he expects coverage levels "will remain elevated given strong growth prospects and substantial reserves which could be used to cover any TDT shortfalls."