quote:

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CHICAGO--(BUSINESS WIRE)--

Fitch Ratings assigns an 'AA+' rating to approximately $352.825 million taxable revenue financing system (RFS) bonds, series 2013 C and 2013D, issued by the Board of Regents of the Texas A&M University System (TAMUS).

A negotiated sale is expected on or about the week of Sept. 2, 2013. Proceeds from the series 2013 C&D bonds will finance renovations at the Kyle Field football stadium on the flagship College Station campus, and fund capitalized interest and issuance costs.

In addition, Fitch affirms the following ratings for debt issued by the Board of Regents of the Texas A&M University System:

--$1.655 billion fixed-rate RFS bonds at 'AA+';
--$300 million (maximum authorization) RFS tax-exempt commercial paper program at 'F1+'.

The Rating Outlook is Stable.

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Looks like the lead underwriter is Wells Fargo.

http://www.i-dealprospectus.com/PDF/1_60664.pdf

http://finance.yahoo.com/news/fitch-rates-texas-m-univ-195700841.html


[This message has been edited by dcj_10 (edited 8/29/2013 3:46p).]

Very interesting!

Call your broker if you'd like to buy some. It looks like the bonds will come out on Tuesday or at the latest on Wednesday.

The underwriting group is Wells Fargo, Raymond James, RBC and Citigroup. If you don't have an account with any of them directly, your broker's fixed income department still might be able to get you some.

What will they pay and what is the hold time? (sorry, too lazy to read it all)

^
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Same questions and will they be available through etrade?

If they weren't Kle Field would you be looking at this type bond?

quote:

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If they weren't Kle Field would you be looking at this type bond?

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I think the interest is more of the novelty kind.

quote:

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If they weren't Kle Field would you be looking at this type bond?

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We just want A&M to pay us for a change.

what's the interest rate?

quote:

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What will they pay and what is the hold time? (sorry, too lazy to read it all)

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The maturity schedule is on page 2 of that first link and range from '16 thru '43 with some sort of call feature that hasn't been determined yet. The yields will be based on a spread to treasuries but won't be known until Wells releases the scale. It is a solid credit so I imagine it will be we'll received.

Will E-trade be able to get you bonds? Maybe. They can put in dealer orders during the order period and then reoffer. It might not be release price at that time since they aren't a syndicate member.

So the deal was indeed priced yesterday. Below are the rough details:

$352MM Texas A&M Univ Revenue Bonds (TAXABLE)
Aaa/AA+/AA+
1.5MM 5/15/2014 0.380% @ par
1.3MM 5/15/2015 0.618% @ par
5MM 5/15/2016 1.058% @ par
1.2MM 5/15/2017 1.780% @ par
59MM 5/15/2033 4.772% @ par (sinking fund, 10 year call)
171MM 5/15/2043 4.972% @ par (sinking fund, 10 year call)

quote:

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59MM 5/15/2033 4.772% @ par (sinking fund, 10 year call)
171MM 5/15/2043 4.972% @ par (sinking fund, 10 year call)

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Is that normal to have a tighter spread on the 30 (~118) than on the 20 (~123)?



[This message has been edited by jh0400 (edited 9/4/2013 11:39a).]

Sometimes, depends on several things. I haven't looked too much at the deal but it could depend on the average lives of the sinking funds and/or how the order period went.

good question jh0400.

BSD:

I understand how sinking fund could work (yield to worst), but what do you mean by "order period went"?

Both seem callable at 10. I imagine that the market doesn't expect the thirty year bond to hit maturity, so a 30 year spread is likely not a valid comparison.


[This message has been edited by AgBank (edited 9/5/2013 10:21a).]

By "how the order period went" I am wondering how well received the longer bonds were compared to the shorter bonds during the order period when customers and other dealers put in orders thru the syndicate. There could have been some strong order flows come in for the longer bonds, causing the underwriter to demand a tighter spread. If the shorter bonds weren't received as well, they could have been cheapened up after the initial order period to make them more attractive to lure buyers back.

Regarding the sinking fund (and assuming no call), you are basically having bonds "called" away from you each year for a few years before maturity. In the case of the '33s, you are having $10-13MM go away in each of '29-'33. This causes the average life to be lower than the a regular bond and you aren't getting 4.772% for the full 20 years on all of your money invested. The '43 bonds have $13-21MM go away each year '34 til maturity in its sinking fund.

Based on today's interpolated Treasury curve, I see the following spreads to average life:

'33 bonds: ICUR 6/18/31 (avg life) = 3.30 (spread of +117bps)
'43 bonds: ICUR 4/8/39 (avg life) = 3.68 (spread of +129bps)


Again, these are based on today's curve but you can see that when you take the sinking fund into account, there is a wider spread on the longer bonds.

Thank you BSD. I understand. It is funny how when you look at a market from the outside you assume it is more liquid than it really is.

Also, Thank you again for the muni bond advise early this summer. The bonds we didn't sell got crushed, and the investments I put the proceeds from the 2 bonds that I sold are effectively breakeven.

[This message has been edited by AgBank (edited 9/6/2013 7:04a).]

I found a $100 savings bond I got in middle school for an essay contest. 10 years later it's now worth $65.97!