DALLAS — San Marcos is bringing a four-tranche issue worth $49.8 million to market next week, as it continues its 10-year capital-improvement plan.
The city, which is roughly nearly midway between San Antonio and Austin, plans to offer $11.8 million of tax and revenue refunding bonds, $9.4 million of general obligation refunding bonds, $24.1 million of combination tax and revenue certificates of obligation, and $4.5 million of GOs.
The underwriting syndicate for next week’s negotiated sale includes Wells Fargo Brokerage Services LLC, Frost Bank, Morgan Keegan & Co., and SAMCO Capital Markets Inc.
Specialized Public Finance Inc. is the city’s financial adviser and McCall, Parkhurst & Horton LLP is bond counsel.
Proceeds from the new-money debt will fund expansions of streets, pedestrian and bicycle lanes, and upgrades to the water and sewer systems.
The Series 2009 GO bonds are structured as serials reaching final maturity in 2029 and the sale exhausts the city’s most-recent bond authorization — an $11.2 million bond package approved in November 2005. Officials are considering another bond referendum for next year to further fund a $250 million capital improvement plan that extends though 2017.
Both tranches of refunding bonds are structured as serials maturing this year through 2020. The certificates mature in 2010 through 2029.
Applications to insure the debt have been made and officials will decide on insurance just before pricing.
Ahead of a similar multi-tranche issue sold in late February 2008, Standard & Poor’s upgraded its rating on the city’s GO debt to AA-minus from A-plus and Moody’s Investors Service assigned its A1 rating to that deal.
Neither agency has issued a rating on next week’s sale yet, and Fitch Ratings has assigned an AA rating to the San Marcos GOs and COs.
Standard & Poor’s said the upgrade reflected the city’s economy, which serves as a retail and distribution center in central Texas, access to Austin and San Antonio, and strong historical assessed-valuation growth and strong financial performance. Mitigating credit factors include a “dependence on sales taxes for a disproportionately large share of general government revenues,” below-average wealth and income levels, and high overall debt levels, according to analysts.
San Marcos’ current population of about 51,222 is up 47.5% from the 34,733 at the 2000 Census. The fiscal 2009 taxable-assessed value of $2.28 billion is 11% higher than five years earlier. The city is home to Texas State University and two outlet malls. The malls are the third-largest tourist attraction in Texas, behind the Alamo and the Riverwalk in San Antonio.
