Validation for $1B of Bonds

Leon County Circuit Judge William Gary on Monday validated $1 billion of tax-exempt bonds for the Florida Water Pollution Control Financing Corp.’s state revolving loan fund.

The corporation plans to sell as much as $475 million of the validated bonds early next year, but the debt may be sold in smaller tranches if market conditions warrant, said agency spokeswoman Dee Ann Miller. The bonds are expected to be sold after an appeal period of the validation expires on Jan. 1.

The state Division of Bond Finance and the corporation’s financial adviser, Public Financial Management Inc., will determine if the debt must be sold in smaller tranches, Miller said.

Bond proceeds will be used to provide low-interest loans to local governments for eligible pollution control projects, such as wastewater, stormwater, and other water-quality improvement projects.

“Our efforts to issue bonds started quite some time ago but have, unfortunately, been prolonged by the current economic environment,” Miller said. “We now have most of the pieces in place to move forward.”

Fitch Ratings on Tuesday assigned an unenhanced AAA rating to $472 million of the debt, citing “significant overcollateralization from excess loan repayments and debt service reserves,” as well as strong loan pool credit quality and diversity as a result of conservative loan underwriting standards.

The exact structure of the deal is not yet available, although a draft preliminary official statement indicates that the debt will have 20-year maturities as well as serial and term bonds.

Citi is the lead underwriter on the transaction. Squire, Sanders & Dempsey LLP is bond counsel and Bryant Miller Olive PA is underwriters’ counsel.

The corporation sold $50 million in June 2001 and $100 million in June 2003.

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