DALLAS — More than a dozen Texas school districts plan to price bonds this week and the Texas Public Finance Authority has an issue on tap, as well.
The state agency plans to offer about $220 million of general obligation and refunding bonds this week through a negotiated sale led by Piper Jaffray.
Coastal Securities Inc. is the financial adviser to the TPFA, which sold $15.5 million of building revenue refunding bonds on behalf of the Texas Facilities Commission Projects last week. Yields on those bonds ranged from 2.54% with a 3.5% coupon in 2010 to 3.91% with a 4% coupon in 2018.
This week’s sale includes about $160 million of refunding and $60 million of new-money debt. About $40 million of the new money will fund capital improvements for the state’s criminal justice department and the other $20 million will finance public safety projects.
The debt carries the state’s GO ratings of Aa1 from Moody’s Investors Service, AA from from Standard & Poor’s, and AA-plus from Fitch Ratings.
Frisco is bringing $25 million of general obligation bonds to the competitive market Tuesday on the heels of an upgrade to AA from Standard & Poor’s. The growing suburb just north Dallas plans to use proceeds for continued construction of a new arts center, some street upgrades, and a new public-safety communications system.
Analysts said the higher rating reflects the city’s continued tax-base expansion and “very strong levels of financial reserves.”
First Southwest Co. is the financial adviser to the rapidly expanding North Texas suburb. Frisco’s 2008 population of about 101,500 is up 41% since 2004 and more than triple the 2000 Census figure of 33,714. The city’s current taxable-assessed valuation of $12.45 billion is up 95% from $6.37 billion for fiscal 2004.
Frisco carries an underlying rating of Aa3 from Moody’s, while Fitch Ratings doesn’t rate the credit.
Bell County has a two-tranche deal coming to market following an upgrade to AA from Standard & Poor’s. The central Texas county will offer $30.8 million of limited-tax refunding bonds and $38.6 million of limited-tax notes today through negotiated issues led by RBC Capital Markets. First Southwest is the county’s financial adviser.
Proceeds from the notes will finance construction of a new county courts building, renovations to existing facilities and land acquisition.
Standard & Poor’s raised its rating on the county to AA from AA-minus due to continued tax-base growth and a consistently sound financial position. The county’s fiscal 2008 assessed value of $11.7 billion is up 11.3% from the year earlier. The taxable-assessed value has averaged 8.3% annual growth since 2002, and preliminary figures for fiscal 2009 show another increase of about 7%, according to analysts.
Moody’s analysts assigned a Aa3 rating to the sales and said the county “has a dynamic economy due to the influence of commercial/industrial companies and healthcare services located in Temple and the presence of Fort Hood in Killeen.”
Three Texas school systems are bringing unlimited-tax school building bonds to the competitive market this week.
Melissa Independent School District plans to offer $3 million Wednesday and East Central Independent School District will issue $49.8 million Thursday. West Sabine Independent School District will offer $9.5 million Thursday, as well. Coastal Securities Inc. is the financial adviser to the district, which has an enrollment of about 600 students in one elementary school and one high school. The small, rural district is in Pineland near the Louisiana border is southeast Texas.
Southwest Securities Inc. is the financial adviser to the other two districts. Melissa ISD serves about 500 students in three schools about 35 miles north of downtown Dallas. East Central ISD, which plans to use proceeds for a new high school, is in San Antonio and has a total enrollment of about 7,850 at 10 campuses.
Meanwhile, Cypress-Fairbanks Independent School District, the third-largest district in the state is coming to market with the first slice of a $807 million bond package approved in November. Voters approved the debt for 13 new schools, land acquisition for 10 future campuses, 275 new buses, and renovations to existing facilities.
On Wednesday, the rapidly growing suburban Houston district plans to offer about $259 million of unlimited tax schoolhouse and refunding bonds through a negotiated sale led by Merrill Lynch & Co.
About $9 million of the issuance is a refunding that will fix out some adjustable-rate debt. The new-money component of the sale includes $100 million from a 2004 authorization and $150 million from the bond package approved last fall. Following the sale, the district will have about $1.61 billion of debt outstanding and $770 million of authorized but unissued bonds. Officials plan to bring all the authorized debt to market over the next five years. A decade ago the district’s enrollment was about 55,800. Now officials project a total student population of more than 108,000 in 2010.
RBC Capital Markets is the district’s financial adviser and Vinson & Elkins LLP is bond counsel.
Other Lone Star state school districts expected to price bonds in negotiated sales this week include:
• Longview Independent School District with $130 million of GO debt and RBC as lead manager
• Crowley Independent School District with $80 million of school building bonds and First Southwest as lead underwriter.
• Beaumont Independent School District with $74.8 million of school building and refunding bonds with Southwest Securities as lead manager
• Grand Prairie Independent School District with $61.2 million of school building bonds and Morgan Keegan as lead manager
• Midway Independent School District with $55 million of GO bonds and Merrill Lynch as lead manager
• Edinburg Consolidated Independent School District with nearly $37.7 million of GO debt with Banc of America Securities as lead manager
• Clyde Consolidated Independent School District with about $16.8 million of school building bonds and Raymond James as senior manager
• Paradise Independent School District with $9 million of school building bonds and Piper Jaffray and First Public LLC as co-managers
• Ore City Independent School District with $8.5 million of GO building bonds and RBC as lead manager
• Greenwood Independent School District with $6.9 million of school building bonds and RBC as sole underwriter
Most of the school bonds come to market backed by the state’s triple-A rated Permanent School Fund. The gilt-edged credit enhancement is nearing capacity as hundreds of millions of school debt has come to market the past few months. State lawmakers want to increase the fund’s capacity and await a federal tax ruling on the proposal.
Cassie Huggins, of the TEA, said the PSF “still has capacity and no one has been denied.”
Districts issuing debt now applied for the guarantee weeks, if not months, ago and were notified of eligibility before June 13.
Huggins said updated data on the fund’s capacity will be available Tuesday.