Featured Municipal Bond Issue, Week of September 10th, 2018: City of St. Petersburg, FL Utility Refunding Revenue Bonds – $204 Million
According to its offering statement, the City of St. Petersburg is issuing $204 million in revenue bonds for the purposes of currently refunding all of the City’s outstanding Public Utility Subordinate Lien bond anticipation note, financing and/or reimbursing the project costs and to pay costs of issuance. The Series 2018 Bonds are scheduled to be sold by competitive sale on September 11, 2018. The Bonds are being issued as federally tax-exempt bonds and are not considered to be an item of tax preference for purposes of the federal alternative income minimum tax.
Moody’s Investors Service, Inc. and Fitch Ratings have assigned municipal bond ratings of “Aa2” and AA, respectively, to the 2018 Bonds.
Principal and interest on the Bonds are secured by and payable solely from an irrevocable prior lien and pledge of the net revenues of the public utility system (gross revenues after the deduction of the cost of operation and maintenance). The System has pledged to maintain a net revenue rate covenant of at least 1.15x coverage of the debt service expense on its annual senior-lien and subordinate debt. Debt service coverage for the system is based based upon the combined results of the water resources and stormwater revenues and expenses. The city’s official statement for the Series 2018 bonds reports that the annual projected maximum debt service coverage for fiscal year 2019 is expected to be 1.69x and the the annual basis coverage for the same year is estimated to be 1.97x (as estimated by the city’s feasibility consultant) . Details on the purposes, tax-status, security, as well as other matters pertaining to these State of California bonds can be found in the preliminary official statement, available on MuniOS.
As of July 2018, the city of Petersburg had an unadjusted unemployment rate of 3.5%, which is 0.6% lower than the U.S. rate in July of 4.1%.
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.