LOS ANGELES--Clark County, Nev., plans Tuesday to price $250 million of limited-tax general obligation bonds in a deal that capitalizes on new revenue sources for transportation improvements.
A group led by Smith Barney, Harris Upham & Co. initially priced the deal two weeks ago, but then cited market conditions as a reason for postponing the selling effort.
Guy Hobbs, the county's comptroller, said Friday that market conditions appear more favorable for a pricing this week. "The calendar doesn't look as crowded," Mr. Hobbs said, adding that the overall tone of the market appears positive, based on reaction to unemployment statistics released Friday.
At the pricing two weeks ago, the deal was tentatively set to offer yields ranging from 4.85% for 1995 maturities to 6.60% for 2017 maturities. Proceeds from the deal will finance part of Clark County's master transportation plan, which was developed in 1990 to address traffic congestion and other issues stemming from tremendous growth in Las Vegas Valley over the last decade.
This week's bond issue provides investors with a double-barreled security pledge that includes Clark County's general obligation credit as well as tax increases developed to fund the plan. Based on the general obligation backing, Moody's Investors Service Inc. rates the issue A1, and Standard & Poor's Corp. rates it A-plus.
This week's financing will provide money for some of the more aggressive projects under the transportation plan, Mr. Hobbs said. Series B, for example, will raise $104.3 million to improve eastwest access along the heavily traveled Las Vegas Strip, well known for its large casinos.
In addition to the GO pledge, the Series B bonds are secured with revenues from a 1% room tax on gross receipts from hotels and motels in the Las Vegas Strip resort corridor. A similar room tax, plus the GO pledge, will secure $9.3 million of Series C bonds for transportation improvements in the nearby Laughlin resort corridor.
Located in the southern tip of Nevada on the Colorado River, Laughlin has grown dramatically in recent years as a popular gambling location.
Finally, the Series A portion of the financing, tentatively set at $136.4 million, will help fund construction of a beltway across the south end of the Las Vegas Valley. The bonds include additional security through a 1% supplemental motor vehicle privilege tax, a 1% room tax on hotels and motels in unincorporated areas of the county outside resort corridors, and a development privilege tax.
Nevada legislators passed a law last year permitting counties to raise local taxes for transportation projects. Clark County officials supported the law to provide revenue sources for their master transportation plan, which totals about $2 billion over the next decade.
As part of that plan, Clark County last summer used a jet fuel tax for the first time to back debt for transportation improvements around McCarran International Airport.
Moody's said of this week's sale, "Revenue and expenditure assumptions for the funding plan are conservative and, if achieved, will enable the debt service to be provided for solely through the pledged revenues."
Moody's thatsaid an additional $140 million of GO bonds for transportation might be issued through 1996 if revenue growth rates exceed current projections. The county also is funding transportation projects on a pay-as-you-go basis.
Standard & Poor's said county debt levels are "moderate to high." But it noted that the A-plus rating reflects the county's strong financial position and conservative financial management.