A promised redemption of troubled bonds issued by the Clay County Gas Utility District did not happen. It wasn’t the first such disappointment.

The district filed a notice Nov. 1 stating that it would redeem $200,000 of its $3.25 million of outstanding gas system revenue bonds on Dec. 1.

The redemption offer was rescinded two days later without explanation on the Municipal Securities Rulemaking Board’s online EMMA system by the trustee, Bank of New York Mellon.

Similar redemptions and rescissions occurred in 2009 and 2010, according to filings on EMMA.

The district has not made a single debt-service payment since issuing its unrated, uninsured bonds in 1998. The debt had serial maturities between 1999 and 2007, and term bonds in 2012 and 2017.

Proceeds were used for equipment and a natural gas distribution system.

In August, the district posted a notice stating that the Board of Commissioners had approved pursuing a tender offer to bondholders by Sept. 15. Morgan Keegan & Co. would be the tender agent. No information about the tender offer has been posted on EMMA since.

Board president Ray Norris said a year ago that a plan was being developed to deal with the outstanding debt, which totaled $4.7 million in missed principal and interest payments at the time.

The district was beset by several problems after the bonds were sold, including the conviction of its project manager, who allegedly embezzled $200,000.

The gas district, which is aligned with Clay County, was projected to have 600 customers upon startup. It had about 198 customers a year ago.

In 2004, it tried to restructure the debt after negotiating to pay bondholders about 26 cents on the dollar. However, local voters refused to approve the sale of new bonds in a referendum.

The bonds with serial maturities do not appear to have traded in some time. Some term bonds are trading for pennies on the dollar.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.