ATLANTA -- Louisiana is planning a negotiated sale of up to $400 million of general obligation bonds early next year, including $100 million of new-money debt, the State Bond Commission's director said last week.
The state is also seeking a new financial adviser, given the recent resignation of Jones Municipals Inc. from that position, according to Rae W. Logan, the director.
The state hopes to sell the debt as early as February in a single issue containing both refunding and new-money debt. This package could include a college savers component, Logan said.
However, if there is any delay in preparing final approval for the new-money issue, Logan said, the refunding debt could be sold first.
"We would prefer to sell it all in one sale because of economies of scale, but we also want to be able to take advantage of a favorable interest rate climate," she said.
Any negotiated sale of new-money GOs must be approved by a two-thirds vote of the state legislature's Joint Legislative Committee on the Budget as well as the State Bond Commission. The sale of refunding debt requires a simple majority vote of the commission.
Louisiana last sold new-money GOs in March 1992 in a $229.7 million sale. In January 1992, it completed its last refunding, a $124.6 million offering including $36.8 million of college savers zero coupon debt. The state currently has $3.2 billion of general obligation debt outstanding, rated Baa 1 by Moody's Investors Service and A by Standard & Poor's Corp.
Logan said the solicitation for a senior managing underwriter was sent out last week, with responses due back by noon Nov. 9. Oral interviews are tentatively scheduled for the first week for December.
The bond commission also sent out requests for proposal for financial advisory services last week, Logan said.
She said the request follows the resignation, effective Oct. 19, of Cheryl Jones, who had served the state as financial adviser since the position was established in September 1989.
When Jones began as financial adviser, she had been a senior vice president at Discount Corporation of New York Municipals. In June 1991, Jones left Discount Corp. to set up her own firm, Jones Municipals Inc.
Jones said Friday that she gave up the financial advisory post at the expiration of her contract on Oct. 19 to accept a position as managing director of public finance at Dean Witter Reynolds Inc.
"The state requested that I accept an extension of my contract through Jan. 15," Jones said. "But while I regard the time spent working with Louisiana as some of the best in my career, my feeling was it was time to move on."
Jones said her primary focus at Dean Witter, where she will begin work today, will be "general municipal finance with a concentration on clients in the Northeast." She said she hoped Dean Witter would bid for the senior underwriting slot on the upcoming Louisiana GO issue.
In September, Sears Robebuck & Co., the securities firm's parent, announced plans to sell off several financial subsidiaries, including Dean Witter, by the end of 1993.
Logan spoke highly of Jones' service to Louisiana. She noted that during her time working with the state, the bond commission has created a debt management plan, developed procedures for hiring underwriters and bond attorneys, introduced the state's first gasoline and motor fuels tax revenue bonds, and set up the state's first college savers bond program.
"Cheryl shows the value of the financial adviser position to the state," she said.