After weeks of delay, underwriters are preparing to price a $100 million issue for the Pennsylvania Economic Department Finance Authority.
Commerce Secretary Andrew Greenberg approved the $100 million issue yesterday. His spokesman, Ron Jury, said Greenberg approved the transaction after a lengthy review of the deal's merits.
The authority will sell tax-exempt bonds for the Sun Co., a multibillion dollar oil concern, which will pay principal and interest on the securities. The authority will help Sun save money on the sale by lending its tax-exemption to the company.
The state had planned to sell the issue early last month, underwriters said in November, but Greenberg's final approval for the deal took a while in coming.
The issue had run into criticism because the authority has never included minority-owned firms in its bond syndicates and because taxpayer activists said that a company as large as Sun does not need help from the state to get access to the capital markets.
Jury of the Commerce Department said the state has not set a date for pricing the bonds, but added that the securities will be sold "as soon as possible."
Underwriters at Goldman, Sachs & Co., the issue's bookrunning senior manager, did not return telephone calls.
The Commerce Department oversees the authority, and Greenberg, as department secretary, serves as the authority's chairman.
Sun Co., a large oil company incorporated in Pennsylvania, is selling the securities to finance construction of a wastewater treatment plant in Delaware County, Pa.
The authority helps private companies located in the state finance capital projects that enhance Pennsylvania's economy or protect its environment.
Some taxpayer groups, however, labeled the issue "corporate welfare" because Sun is wealthy enough to issue taxable bonds on its own. The Commerce Department counters that the deal will create more than 800 jobs and improve Pennsylvania's environment.
In 1993, the state amended the law creating the authority to encourage inclusion of minority-owned firms on bond syndicates. Last month, The Bond Buyer reported that no such firms had served on any of the seven taxable and tax-exempt issues totaling more than $432 million that the authority sold since the amendment took effect in December 1993.
In response, Greenberg said that the authority can only encourage, not mandate, the inclusion of minority firms in the authority's bond syndicate. Greenberg said the private companies select their own underwriters on such issues.