DALLAS — This week’s Texas docket includes two sizeable issues, a multi-tranche sale from a north Dallas suburb, and a couple of school district offerings.
Triple-A rated Dallas County Community College District plans to offer $110 million of general obligation bonds Tuesday through a negotiated sale led by Southwest Securities Inc. and Ramirez & Co.
Estrada Hinojosa & Co. and First Southwest Co. are the district’s co-financial advisers. McCall, Parkhurst & Horton LLP and West & Associates LLP are co-bond counsel.
This sale is from a $450 million authorization passed by voters in November 2004. The district will have about $50 million remaining following this week’s issue and officials plan to bring that to market early next year. The Series 2009 bonds are structured as serials maturing in 2010 through 2029.
Fitch Ratings and Standard & Poor’s both assigned a triple-A rating to the sale. Moody’s Investors Service also rates the district at Aaa.
Analysts said the gilt-edged rating reflects the district’s diversified revenue sources, substantial population, and tax base with steady growth. Other credit strengths include a large, steady enrollment base that recently experienced higher than average levels of growth, according to Fitch.
Standard & Poor’s said the district’s fiscal 2009 taxable-assessed value of $177.5 billion is up about 34% from $132 billion five years ago.
The community college serves about 65,000 students at seven different campuses with a several satellite facilities.
The Texas Water Development Board is bringing $162.8 million of water financial-assistance bonds to market this week in a negotiated issue led by Morgan Stanley. Proceeds from the Series 2009 and Sub-Series 2009B bond will be used for the board’s water infrastructure fund, specifically for conservation projects.
First Southwest is the financial adviser to the board and McCall, Parkhurst & Horton is bond counsel.
The bonds are rated Aa1 by Moody’s, AA-plus by Fitch, and AA by Standard & Poor’s.
The Tomball Independent School District is coming to market with $53.4 million of school building bonds this week on the heels of an upgrade to AA-minus from Standard & Poor’s.
Fitch assigned a AA-minus rating to the sale and affirmed the rating on the district’s $207 million of debt outstanding, citing “strong financial reserves, very healthy tax-base growth, and manageable enrollment-growth pressures.”
Morgan Keegan & Co. is lead manager for the negotiated sale.
Standard & Poor’s analysts said the upgrade reflects the district’s “historically very strong financial position and healthy property-tax base growth.”
Fitch said the district’s tax base averaged annual growth of more than 11% the past five years and stood at $4.7 billion for fiscal 2009.
This is the third slice of a $198 million authorization approved in May 2007 for three new elementary schools and a second high school. Officials expect to be back in the market with the remaining $60 million over the next two years, according to Fitch.
The district, which is about 20 miles northwest of Houston, serves nearly 9,800 students at 11 campuses. Officials anticipate continued annual enrollment growth of 3.5% to 4%, pushing the total student population to about 11,000 in 2012, according to analysts.
The Richardson Independent School District plans to offer about $21 million of school building bonds today. RBC Capital Markets is lead manager for the negotiated sale and First Southwest is the financial adviser to the district, which is just north of Dallas.
Moody’s assigned its A1 rating to the sale and Standard & Poor’s rates the district’s underlying credit at AA-plus.
None of the school bonds set to price this week will backed by the state’s triple-A rated Permanent School Fund, which has suspended guarantees until at least September because of the declining value of the fund.
The north Dallas suburb of Garland plans to price three tranches of debt worth about $54.3 million this week. The city will offer $23.9 million of combination tax and revenue certificates of obligation in a negotiated sale led by Southwest Securities. It also plans $18.2 million of water and sewer system revenue bonds and $12.2 million of electric utility system revenue bonds in negotiated sales with RBC Capital Markets as lead manager and Siebert Brandford Shank & Co. as co-manager.
First Southwest is the financial adviser to the city and Fulbright & Jaworski LLP is bond counsel.
Both Fitch and Standard & Poor’s assigned a AA rating to the water and sewer debt, an A-plus rating to the electric utility bonds, and a AA-plus rating to the COs.
George Kauffman, director of financial services, said officials plan to include bids for insurance on the debt. He said the electric system bonds are the tranche that will most likely be insured, as the other bonds are rated in the double-A category. But Kauffman cautioned that insurance will only be purchased “if it’s of value to us to do it.”
