Jan 25 Florida, still weathering a slow economic
recovery, is coming to market as soon as next week with a $330.1
million school bonds deal amid concerns about its long-ailing
The refunding deal, in which an issuer sells lower-yielding
debt to replace higher-interest outstanding securities, carries
top ratings from Wall Street credit agencies and would rank
among the week's larger competitive offering.
Florida finance officials have not fixed a date for the sale
but were expected to next week solicit with 18 hours notice bids
on the $330.1 million of public education capital outlay (PECO)
"It depends on the market but it looks that way," Carol
Bagley of Florida's Division of Bond Finance said on Friday.
On Friday, muni yields climbed sharply in secondary trading
along with U.S. Treasury interest rates. The rise may make some
planned refunding deals uneconomic.
The PECO issue is backed by Florida's full faith and credit
and is rated AAA by Fitch Ratings and AA1 by Moody's Investor
Service, according to analysts' reports.
Moody's has a stable outlook on the state and the PECO deal,
while Fitch has a negative outlook on Florida's $13.6 billion of
full-faith debt and about $1 billion of state
"The negative outlook reflects Florida's reduced financial
flexibility as it emerges very slowly from the recession," Fitch
analysts said. "Reserves, while still satisfactory, have been
significantly reduced and budget balancing remains challenging."
Both Moody's and Fitch praised the Republican-led state
government's financial policies. In addition, they said, Florida
still has bright economic prospects but faces near-term drag
from unemployment still higher than the U.S. rate of 7.8
percent, reduced personal net worth levels and the lingering
weak market in housing.
Florida AAA-rated, 10-year issues on Thursday traded 20
basis points above Municipal Market Data's benchmark reading of
comparable top-quality debt. That is four basis points beneath
the average of the last three months, MMD data show.