Sunday, June 24, 2012

Scottsdale refinancing bonds to save $10M for McDowell Sonoran Preserve

Scottsdale is refinancing about $88 million of bonds starting next week to save an estimated $10 million over 13 years for the McDowell Sonoran Preserve.

Arizona residents will have the first chance on Monday to buy the tax-exempt investment bonds to refinance the bonds that were issued in 2004 for the preserve, said David Smith, Scottsdale city treasurer.

"It's a refinancing that has a significant benefit for all of the citizens of Scottsdale and the preserve acquisition program going forward," Smith said.

The McDowell Sonoran Preserve includes about 21,000 acres of desert and mountainous terrain.

Scottsdale residents voted in 1994 and 2005 to support a tax hike for preserve acquisition.

The city hopes to save money with lower-interest-rate bonds that will reduce payments on that debt from Scottsdale's dedicated sales tax for the preserve.

The minimum investment in the preserve bonds is $5,000 for a period of one to 13 years.

The yield on the bonds is expected to be low, maybe 2 to 3 percent, because the city's triple-A bond rating is a low-risk investment, Smith said.

Scottsdale has a AAA bond rating from all three major rating agencies -- Moody's Investor Services, Standard & Poor's, and Fitch, he said.

Scottsdale has arranged a group of underwriters to sell the preserve bonds: J.P. Morgan, Morgan Stanley, Edward Jones, Stone & Youngberg and Wedbush Securities.

Information on the preserve bonds and underwriters is available at scottsdaleaz.gov/preservebonds.

Lee Guillory, city finance manager, said in most cases the city's bonds are purchased by large institutional investors and are available only to citizens on the secondary market.

Scottsdale residents can place orders through their brokers during Monday's exclusive retail period but the funding is not due until early July, Guillory said.

by Peter Corbett - Jun. 8, 2012 01:28 PM The Republic | azcentral.com




Scottsdale refinancing bonds to save $10M for McDowell Sonoran Preserve

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