ATLANTA - Brevard County, Fla., will soon find out whether the municipal bond market is willing to forgive and forget.
On Tuesday, the county's board of commissioners approved a package of four bond issues, the first offerings from Brevard since it infuriated the municipal market last fall by considering default on a certificates of participation financing.
According to Dean Sprague, the county's director of support services, the commissioners approved selling three refunding deals and a new-money offering.
The refunding deals would include a refinancing of a $4.9 million solid waste revenue bond issue sold in 1984, a $31 million general obligation bond issue sold in 1986, and a $29.8 million utility revenue deal sold in 1985. Each issue will be sold in a competitive offering limited to a pool of 10 underwriters.
The pool is composed of Alex. Brown & Sons; A.G. Edwards & Sons; William R. Hough & Co.; Goldman, Sachs & Co.; Lehman Brothers; Merrill Lynch & Co.; Morgan Stanley & Co.; Prudential Bache Securities; PaineWebber Inc.; and Smith Barney, Harris Upham & Co.
The new-money issue, a solid waste revenue bond offering that cannot exceed $22.5 million, will be sold in a standard competitive bidding, Mr. Sprague said.
He said the county hopes to sell all the bond at the same time, as early as September.
Thomas B. Holley, the county's financial adviser, said responses for proposals on the refundings would be sent out to the 10 underwriters this week, with replies due back by Aug. 19. He said the underwriters would be asked to provide bid details, including underwriting spreads and interest rate scales on the refunding issues.
"The idea is to make the RFP process as close to a competitive bidding as possible," he said.
Mr. Holley said he hopes that the controversy over the proposed referendum last fall will not spark resistance to the upcoming bond issues.
"Obviously, these deals have a very different credit structure from a certificate of participation," he said. "But at the same time we are being careful to keep our line of communication open." He said that there have already been some preliminary discussions with rating agency officials.
Brevard County came under enormous pressure from rating agency officials, insurers, and underwriters last fall after t considered calling a referendum on a $23.9 million COPs deal that it sold in 1989 to fund construction of a governmental operations center. The referendum would have asked voters if the county should cease appropriations for lease payments on the financing. The board of commissioners later backed off its call for the vote.
Mr. Sprague said that in addition to the four sales approved Tuesday, Brevard County will likely soon complete plans to sell about $6.6 million of bonds to finance construction of a county-owned sports stadium. In May, the commissioners approved a one-cent increase in a tourist tax to pay for the stadium, which will be used by the Florida Marlins, an expansion baseball team.
The official also said the county will "almost certainly" sell bonds to finance a $17 million criminal justice facility.
Richard Ciccarone, senior vice president and research manager at Kemper Securities Group, said he did not expect Brevard County's bond deals to be penalized. "The county, after all, did not hold the referendum," he said. "I think the municipal market wi remember that they did the right thing."