Florida’s elected Cabinet on Tuesday approved the competitive or negotiated sale of up to $300 million of Board of Education lottery revenue bonds, which may be sold in various series.
This is the first bond authorization under a new policy in which Florida, which typically sells bonds competitively, may sell deals on a negotiated basis because of the continued turmoil in the bond market.
Just three weeks ago, the Cabinet approved the creation of an underwriting pool in response to a freeze in the bond market that occurred the second week in September and lasted several weeks, preventing many issuers from selling debt. Since then, the market has loosened up some, with participation mainly from retail investors.
The state has successfully priced two transactions since the second week in September, but market conditions are deteriorating again, Ben Watkins, director of the Division of Bond Finance, told Cabinet members Tuesday.
The problems are twofold — there is an increased supply of debt coming to market from issuers who previously delayed transactions, and there is a lack of institutional demand for buying bonds, according to Watkins.
“It remains very uncertain going forward,” he said.