The Birmingham Water Works and Sewer Board has accelerated the schedule for its next bond sale due to financial problems in Jefferson County, according to the Birmingham News.
The board, which is preparing to sell $125 million of bonds for capital improvements as early as June, selected a syndicate of five underwriters on Friday, the paper reported.
The board chose Morgan Keegan & Co., Raymond James & Co., Gardnyr Michael Capital Inc., and Terminus Securities LLC to sell the bonds and designated varying percentages of the transaction to each firm.
Sterne, Agee & Leach Inc. is the board’s financial adviser.
The newspaper reported that board officials were concerned about pricing the deal soon due to the uncertainty in Jefferson County, where Birmingham is the county seat.
Perennially troubled Jefferson County recently lost a court ruling, costing it the use of a major tax revenue source supporting its general fund.
County officials have said they are trying to avoid filing for bankruptcy, though it remains an option of last resort if a pending budget deficit cannot be cured with budget cuts and a new source of revenue provided by the Alabama Legislature.
“We’re unsure what’s going to happen at the county, but we have to stand on our sound financial footing,” the Birmingham Water Works and Sewer Board’s general manager, Mac Underwood, was quoted as saying in an April news story. “Hopefully, we can get in the market and ahead of things.”
The board sold $94.5 million of revenue refunding bonds in November. They were rated Aa3 by Moody’s Investors Service and AA-minus by Standard & Poor’s.
The bonds priced to yield 3.28% with a 5% coupon in 2020, 4.17% with a 4% coupon in 2025, and 4.5% with a 4.25% coupon in 2029.