BRADENTON, Fla. - The Tennessee State School Bond Authority today hopes to price $133.1 million of new and refunding revenue bonds for various colleges - an effort underscored with the launch of a new Web site to attract retail and in-state buyers.
Proceeds from the deal will provide $113.6 million of new money to take out commercial paper and finance new projects at various colleges and higher learning institutions, while another $19.5 million will current refund all or a portion of Series 1998D bonds.
The bonds will be repaid by the various borrowers, but also are subject to an intercept program that enables the state to intercept operating and maintenance appropriations to pay debt service
Pricing of the offering could be pushed to tomorrow or even next week because of this week's volume, which is headed by California's $4 billion deal, said Mary Margaret Collier, director of the state Division of Bond Finance. The refunding piece will be offered for debt service savings if the minimum required savings of 4% is achieved.
This is the authority's second deal with JPMorgan as senior manager, which will try to increase retail sales to high net worth individuals through an agreement with UBS Financial Services Inc.
The authority's first deal in which the JPMorgan-UBS agreement was in place came in November, Collier said. The $167 million of bonds sold aggressively.
"We expect this to happen again because this is a very strong credit," said Collier, referring to this week's sale.
Traditionally, the state sells its debt to large institutional investors. But to boost investor interest from the retail sector even further, Tennessee last week launched a Web site at www.buyTNbonds.com to provide detailed information about its bond sales and brokers distributing the bonds.
"We're never had a Web site before and we're very excited to present this," Collier said, noting that the site will be available for all state-issued bonds.
The authority's bonds are rated AA by Fitch Ratings and Standard & Poor's, and Aa2 by Moody's Investors Service. All three agencies placed a stable outlook on the credit.
Co-managers on the deal are Duncan Williams Inc., Morgan Keegan & Co., MR Beal & Co., and Wiley Brothers Aintree Capital.
A selling group, which the state typically uses to broaden sales efforts, consists of Edward Jones, Harvestons Securities Inc., Mesirow Financial, J.J.B. Hilliard, W.L. Lyons LLC, Stephens Inc., and FTN Financial Capital Markets.
Public Financial Management Inc. is financial adviser to the authority. Hawkins Delafield & Wood LLP is bond counsel. Lewis & Munday and Vinson & Elkins LLP are co-counsel to the underwriters.
