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Commission approves $9 million GO Mesa–backed revenue bonds for St. Bernard Parish drainage projects
Summary
The State Bond Commission approved up to $9 million in revenue bonds for the St. Bernard Parish 'GO Mesa' project, to be repaid from a specified portion of GO Mesa revenues and marketed to sophisticated investors due to revenue and timing risks.
The State Bond Commission on June 11 approved an application for up to $9,000,000 in revenue bonds issued by the Louisiana Community Development Authority for the St. Bernard Parish GO Mesa project. The parish intends to use the proceeds primarily for drainage improvements.
Staff explained the bonds will be special obligations secured solely by 48.5% of the parish’s GO Mesa revenues; in 2021 the parish previously leveraged the other 51.5% for bonds. Under the proposed structure, revenues received would be transferred 100% to a trustee, with 51.5% applied to the 2021 bonds and 48.5% applied to the proposed bonds. If revenues exceed required debt-service payments, 50% would go to additional bond redemption and 50% to the parish for GO Mesa-authorized uses. Staff emphasized that if revenues are insufficient to pay debt service, payment could be delayed beyond stated maturity and that investors would assume numerous risks; the bonds will be unrated and sold pursuant to a preliminary limited offering memorandum to sophisticated investors only.
Representative Reiser moved approval; Senator Migas seconded. Hearing no objections, the commission approved the item. Staff said the transaction meets technical requirements and recommended approval.
