DALLAS – The Texas Water Development Board will look for savings with a triple-A-rated $240.5 million refunding bond sale on July 11.
As general obligation bonds, the debt carries the state’s GO credit rating.
“The rating reflects the size and strong fundamentals of the Texas economy,” said Moody’s Investors Service analyst Nicholas Samuels, who cited “a rainy day fund that provides a strong budgetary cushion, strong governance and fiscal management, and low bonded debt levels.”
The only clouds on the state’s horizon are “high pension liabilities and ongoing pressure to maintain structural budget balance against the spending pressures of strong demographic growth,” Samuels said.
Kim Edwards, managing director at Piper Jaffray & Co., is lead banker for the book runner, which is teaming with four co-managers: BOK Financial Securities Inc., Loop Capital Markets, Barclays, and Siebert Cisneros Shank & Co.
Anne Burger Entrekin, regional managing director at Hilltop Securities, is financial advisor.
Norton Rose Fulbright is bond counsel.
The bonds are issued in three tranches, with two sub-series of $48 million each and one of $144.3 million. The bonds reach final maturity in 2028. The board only refunds bonds if the savings exceed 2% of net present value.
Under voter-approved constitutional amendments, the TWDB was authorized to up to $2.48 billion in general obligation bonds for water development projects. The board has about $1.47 billion outstanding, according to the preliminary official statement.
Created in 1957, the TWDB oversees regional planning and preparing the state water plan for the development of the state’s water resources. The three-member board, appointed by the governor, administers financial assistance to build water supply, wastewater treatment, flood control, and agricultural water conservation projects.
At its last meeting June 21, the board approved $22.2 million in financial assistance for water and wastewater projects.
On April 9, the board issued $346.3 million of state revolving fund revenue bonds.