Dallas, Texas, sold $569.8 million in securities to finance capital improvements and refinance existing debt.
The issuance included $371.9 million in bonds and $197.9 million in certificates of obligation. The bonds mature between 2025 and 2041, yielding between 2.83% and 4%. The certificates mature between 2025 and 2033, yielding between 2.83% and 3.46%. The securities received a rating of AA from Fitch Ratings and AA- from S&P Global Ratings.
The rating reflects “strong revenue growth prospects, moderate long-term liability burden, and solid reserve levels,” Fitch analysts wrote.
Dallas will use the issuance proceeds to fund upgrades to its infrastructure, public safety facilities, and city government buildings. The city will also use the proceeds to refund previously issued bonds.
The issuance may not be Dallas’ last—or biggest—of the year. In January, Dallas city councilmembers agreed to increase the size of an upcoming bond referendum to $1.25 billion from $1.1 billion. They also committed to holding the referendum in May rather than its original date in November. While cities sometimes break up their voter-approved bond authorization over several issuances, approval of the referendum could pave the way for Dallas to sell hundreds of millions of dollars in additional debt this year.
The securities are general obligations of the city, backed by its full faith and credit and payable by property taxes.
BofA Securities, Inc served as underwriter on the issuance, purchasing the bonds for a premium of $45.9 million. Hilltop Securities Inc and Estrada Hinojosa & Company, Inc acted as financial advisors.