The California Statewide Communities Development Authority board Wednesday named a five-member underwriting team for its forthcoming securitization of tax revenue California plans to borrow from local governments.
Goldman, Sachs & Co., JPMorgan, and Morgan Stanley were named senior managers for the Proposition 1A Securitization program, which is named after the 2004 ballot measure that limited the state's ability to borrow from local governments and set the ground rules for the times when the state does borrow.
De La Rosa & Co. and Stone & Youngberg LLC were named co-managers.
To help balance its general fund budget, the state will borrow 8% of local governments' property tax revenue during the current fiscal year, or about $1.9 billion. The state is required to repay the loan in 2013.
Lobbyists for cities, counties, and other local agencies secured language that requires the state to pay for interest and cost of issuance on the securitization, meaning that the deal should cost the locals nothing if it works as planned.
As things stand now, the securitization cannot take place until after Dec. 1. The locals are trying to get that provision changed before the Legislature adjourns Sept. 11 to allow the deal to move forward sooner.
If they are successful, the CSCDA would like to close the securitization by mid-November, according to a staff report for Wednesday's CSCDA board meeting.