DALLAS — The Louisiana State Bond Commission on Thursday selected an underwriting team for the planned sale of $500 million of fuel tax revenue bonds to finance a constitutionally mandated road and bridge construction program.
The senior managers will be Citi and Goldman, Sachs & Co. Goldman is book-running manager. Co-senior managers are Stephens Inc., Sterne, Agee & Leach Inc., Loop Capital Markets Inc., and Morgan Keegan & Co. Foley & Juddell LLP is bond counsel.
The bonds are expected to go to market by the end of August, said Freda Johnson, president of Government Finance Associates Inc., the commission’s financial adviser.
Whit Kling, director of the Bond Commission, said the request for proposals for the bonds drew 14 submissions from senior underwriters, 11 seeking selection as co-managers, and eight firms seeking appointment as bond counsel.
Successful applicants received the highest scores from an evaluation team that included representatives from the Bond Commission, the state treasurer’s office, the Department of Administration, and the Department of Transportation and Development, Kling said.
Proceeds from the bonds will finance a portion of the $5.2 billion Transportation Infrastructure Model for Economic Development program voters authorized via constitutional amendment in 1989. The TIMED bonds are supported by four cents of the state’s 20 cents per-gallon tax on gasoline and diesel fuel. If those revenues prove insufficient, additional support is available from the remaining 16 cents.
The fuel tax bonds are rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s.
The commission approved two sales of taxable utility system revenue bonds to be issued by the Louisiana Public Facilities Authority on behalf of two units of Entergy Inc. The proceeds will be used to restore portions of the company’s electrical transmission system in Louisiana that were damaged by hurricanes Ike and Gustav in 2008.
The approval covers up to $472 million of bonds for the system operated by Entergy Louisiana LLC and up to $249 million of bonds for work on the system operated by Entergy Gulf States Louisiana LLC.
The company said the bonds will boost the monthly bills received by Entergy Gulf States’ residential customers an average of $1.42 and will increase those received by Entergy Louisiana by an average of $2.12. The 10-year surcharge has been approved by the Louisiana Public Service Commission and the Louisiana Utilities Restoration Corp.
Entergy Louisiana supplies power to customers in southern and northern Louisiana. Entergy Gulf States operates a service area that stretches across central Louisiana from Baton Rouge to the Texas border.
In August 2008, the Public Facilities Authority sold more than $1 billion of bonds to reimburse utilities for the cost of restoring electrical delivery systems in Louisiana after hurricanes Katrina and Rita in 2005, and fund a restoration reserve of $250 million to repair damage from future storms.