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Pflugerville Community Development Corporation to issue $18.275 million in sales-tax revenue bonds; council ratifies
Summary
Council ratified the PCDC's issuance of $18,275,000 in sales-tax revenue bonds to help finance a land purchase; bonds are taxable, carry a 5.49% interest rate and were rated AA- by S&P for PCDC.
City Council ratified Jan. 28 a Pflugerville Community Development Corporation decision to issue $18,275,000 in sales-tax revenue bonds, taxable series 2025, and took other related approvals to allow PCDC to proceed.
Dusty Traylor, financial adviser with RBC, told the council that the bonds were sold in the public debt market to finance part of a purchase of roughly 54 acres of land by PCDC. The bonds have a stated interest rate of 5.49 percent and a 15-year final maturity; average annual debt service was described as about $1,780,000. Traylor said the bonds were taxable because of the nature of the financed project.
Traylor said the issuance did not represent the full purchase price; about $6 million to $7 million of the land price will be paid from PCDC fund balance, with debt covering the remainder. He said PCDC's sale was conducted last week and that, with the council's ratification, the closing was expected on Thursday and funds would be delivered that day.
Traylor noted this was the first time PCDC had issued bonds in the public debt market and that S&P assigned PCDC a AA- rating; S&P also upgraded the city's issuer rating to AA+. Council discussion included questions about whether this was PCDC's first public bond issuance; staff and the financial adviser confirmed it was.
A motion to approve ratification of the resolution authorizing the issuance was made and seconded; the motion carried.
Ending: Staff and the financial adviser said the bond closing should occur within days and proceeds will be used toward the approximately 54-acre PCDC land acquisition.
