Tuesday’s events at Government Plaza could determine whether Shreveport sticks to the initial general obligation bond sale schedule approved by voters in the spring, but it is not the only factor.
The Shreveport City Council is holding off on final approval until at least next week to sell $88 million in general obligation bonds to pay for streets, sewer and utility projects approved in the 2024 bond election. The delay doesn’t necessarily mean the sale start schedule will be on track, the city’s bond attorney said, adding that the city’s bond attorney said the delay doesn’t necessarily mean the sale start schedule will be on track, and that city council members are considering an administration to relocate police from the crumbling headquarters building. He said he could change course as soon as Tuesday, assuming he is satisfied with the approach. .
“I don’t think the City Council did anything in the last meeting that would cause any problems,” said Mike Bousada, the city’s bonding attorney.
Last week, the City Council postponed final passage of an ordinance authorizing the sale of the bonds. The administration has always hoped to launch its first bond sale in October or early November, but that won’t happen until Congress votes to end the embargo on 2024 bond issuances, members said. They say the deadline is contingent on progress in moving police from their Texas Street headquarters to squalid and potentially unhealthy conditions. Bousada said doing so Tuesday would still allow the city to stick to its schedule, but there are other considerations.
Bousada said after the City Council approves the sale, the city will begin the process of putting the bonds on the market.
General obligation bonds, all the debt that cities take on to pay for infrastructure, are purchased by banks, which sell them to customers, often insurance companies and pension plans (but also the general public). The banks, underwriters and the city’s financial advisors who plan to purchase Shreveport’s 2024 general obligation bonds will tell the city when market conditions are most ripe for a sale, Bousada said. These conditions are difficult to predict because they are influenced by many factors, including the proximity of holidays.
“We don’t really know,” Bousada said. “The most important thing is for the mayor and city council to be ready when they feel safe.”
Bousada said the city’s bond attorneys are working proactively on that end. Most importantly, they have already created an “official statement” for the bond sale, a document that explains the terms of the bond and certifies that the sale has legal approval.
The city is already awaiting a bond rating, which will affect the bond’s value. Although expected to be issued in the coming weeks, the rating agency has a “significant” outstanding balance as other municipalities also look to sell bonds before the end of the year, Bousada said.
Once a rating is secured, the city must insure the currently rated bonds. While that is likely, there is no guarantee that an insurance company will insure Shreveport’s bonds, Bousada said. Insurance on bonds affects interest rates.
Once these steps are completed, Bousada said his team could finalize a public statement regarding the bond sale. You will then seek advice from your underwriter on the exact date that is best to begin selling. And even that date won’t be confirmed.
“There is a possibility that we may decide that market conditions are poor by the day of the sale and cancel the sale,” Bousada said.
Bousada said plans to begin the sale by mid-November could even be on track even if Tuesday’s council postpones approval of the sale until its Oct. 22 meeting. He said working with insurance companies and underwriters in advance could speed up future actions.
Bousada said the process of bringing the 2024 bonds to market has been moving at a steady pace since voters approved them in the spring. Such lead times mean short delays are less likely to derail planned schedules, he said.
“It can take up to six to eight months in some cases to complete the whole process. I knew the goal was to be efficient,” Bousada said.
