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Lubbock moves forward with notice of intent to issue general-obligation bonds
Summary
Council approved publication of notice to sell portions of voter-approved 2022 and 2024 general-obligation bond authorizations; officials projected favorable market conditions and a likely all-in true interest cost below 4%.
The Lubbock City Council on Feb. 11 approved the publication of a notice of intent to issue a portion of voter-approved general obligation (G.O.) bonds from the city’s February 2022 and February 2024 bond elections.
The action authorizes staff to begin the formal process that leads to a public sale. Joe Jimenez, the city’s newly hired chief financial officer, introduced the item and said the issuance would finance projects approved by voters in the 2022 and 2024 bond elections. Financial adviser Matt Bowles of RBC presented market context and a preliminary plan of finance to the council.
Why it matters: The city plans to sell approximately $29,600,000 in bonds from the 2022 election and $19,400,000 from the 2024 election, based on the plan Bowles presented. Bowles described current municipal-market conditions as relatively stable and said the finance team used February market rates with a 45-basis-point cushion for planning. He gave a preliminary all-in true interest cost (TIC) of 4.35 percent, noting that removing the 45-basis-point cushion would place yields nearer 3.90 percent.
Key project and timing details in the presentation: Bowles said the city intends to issue the obligations as general-obligation tax bonds, amortized over a 20-year payback period with the city’s typical 10-year optional redemption provision. The obligations were expected to be rated by both Fitch and Standard & Poor’s, with the city anticipating affirmation of its double-A-plus ratings. The timetable provided in the presentation called for a parameters order in March, a public sale on or about April 2, and delivery/closing around April 30.
Council action: The council voted to publish the notice of intent; the presiding officer asked for a motion, which was made and seconded, and the motion passed unanimously by voice vote.
What the transcript records and does not record: The presentation included detailed line-item project totals for the two bond elections but the council did not take up those line items in detail during the hearing. Bowles and Jimenez answered general financing questions and said they would return to council with a parameters resolution in March and a sale recommendation in April.
