Miami-Dade County preps new money competitive sale

Miami-Dade County, Florida, is selling almost $178 million of new money bonds this week to finance a variety of projects and initiatives around the county.

Going up for competitive bid on Tuesday at 9:30 a.m., ET, will be $177.66 million of Series 2023 capital asset acquisition obligation bonds.

Proceeds will finance programs for the general government and the departments of health and society, neighborhood and infrastructure, public safety, recreation and culture, fiber optic infrastructure, fire rescue and police, Eureka computer-aided dispatch, the county’s cybersecurity strategic evolution plan, and the quality neighborhood initiative program.

PFM is the financial advisor; Squire Patton Boggs and D. Seaton & Associates are the bond counsel.

The deal is tentatively structured as serials, due April 1, running from 2024 to 2048.

The bonds are rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings. Both rating agencies assign stable outlooks to the credit.

“The Aa2 issuer rating reflects the county’s dynamic and growing economy with strong wealth metrics and below average income levels,” Moody’s said. “The rating also incorporates the county’s adequate reserve levels, which are below medians on a relative basis but are very strong nominally, and manageable long-term liabilities. The rating also reflects the county’s elevated exposure to environmental risks, namely hurricanes and sea level rise.”

Moody’s noted that the Aa2 non-ad valorem rating is at the same level as the issuer rating because of the non-contingent nature of the pledge.

“While there are some limitations on the revenues, these constraints aren’t meaningful given the breadth of the basket of revenues and the ability of the county to actively control and manage them,” Moody’s said.

The county last sold comparable bonds competitively on Aug. 2, 2022, when Morgan Stanley won $88.06 million of Series 2022A capital asset acquisition special obligation bonds with a true interest cost of 3.8784%.

Last week, Miami-Dade County Mayor Daniella Levine Cava presented her proposed $11.7 billion fiscal 2023-2024 budget.

The budget proposal includes a 1% property tax cut and a gas tax holiday. The proposed budget and capital plan are broken down into an operating budget of about $7.28 billion and a capital plan of around $4.41 billion.

The proposed capital budget is supported by debt issuance backed by proprietary revenues, such as water and wastewater charges and the fees at the airports and seaport, according to the budget proposal. There are also programs funded by impact fees, grants and debt backed by non-ad valorem revenues, such as tourist taxes and sales and utility taxes.

Since 2013, the county has sold about $19 billion of debt, with the most issuance occurring in 2020 when it offered about $2.9 billion of bonds.