New Issue: Detroit offers up $501.92 million water supply system revenue bonds

By Sheri Kasprzak

New York, Dec. 14 - The City of Detroit priced $501,915,000 of series 2011 senior lien water supply system revenue bonds in three tranches, said a pricing sheet.

The deal included $382,425,000 of series 2011A tax-exempt bonds, $17.23 million of series 2011B taxable bonds and $102.26 million of series 2011C refunding bonds.

The bonds were sold on a negotiated basis with Siebert Brandford Shank & Co. LLC and J.P. Morgan Securities LLC as the senior managers. The co-managers were Bank of America Merrill Lynch, BMO Capital Markets LLC, Loop Capital Markets LLC and Morgan Stanley & Co. LLC.

The 2011A bonds (A1/A+/) are due 2012 to 2027 with term bonds due in 2031, 2036, 2037 and 2041. The serial coupons range from 3% to 5.25%. The 2031 bonds have a 5% coupon priced at 99.015, and the 2036 bonds have a 5% coupon priced at 96.84. The 2037 bonds have a 5.75% coupon priced at 105.626, and the 2041 bonds have a 5.25% coupon priced at 98.522.

The 2011B bonds (A2/A/) are due 2013, 2016, 2021 and 2033. The 2013 bonds have a 2.496% coupon priced at par, and the 2016 bonds have a 3.607% coupon priced at par. The 2021 bonds have a 5% coupon priced at 99.474, and the 2033 bonds have a 6% coupon priced at 98.104.

The 2011C bonds are due 2012 and 2021 to 2027 with term bonds due in 2012 and 2041. The serial coupons range from 4.5% to 5.25%. The 2012 bonds have a 3% coupon priced at 101.134, and the 2041 bonds have a 5% coupon priced at 95.689.

Proceeds will be used to fund capital improvements to the city's water supply system and terminate the entire existing interest rate swap portfolio of the water system.

Issuer:	City of Detroit
Issue:	Series 2011 senior lien water supply system revenue bonds
Amount:	$501,915,000
Type:	Negotiated
Underwriters:	Siebert Brandford Shank & Co. LLC and J.P. Morgan Securities LLC (lead); Bank of America Merrill Lynch, BMO Capital Markets LLC, Loop Capital Markets LLC and Morgan Stanley & Co. LLC (co-managers)
Ratings:	Moody's: A1 (for 2011A and 2011C); A2 (for 2011B)
	Standard & Poor's: A+ (for 2011A and 2011C); A (for 2011B)
Pricing date:	Dec. 14
Settlement date:	Dec. 22
$382.425 million series 2011A tax-exempt bonds
Amount	Maturity	Type	Coupon	Price
$5,545,000	2012	Serial	3%	101.134
$3,395,000	2013	Serial	5%	105.521
$3,535,000	2014	Serial	5%	107.709
$3.68 million	2015	Serial	5%	108.878
$3.83 million	2016	Serial	5%	110.407
$3,985,000	2017	Serial	5%	111.513
$4.15 million	2018	Serial	5%	111.645
$4.32 million	2019	Serial	5%	111.456
$4,385,000	2020	Serial	5%	110.739
$4,385,000	2021	Serial	5%	110.27
$4,375,000	2022	Serial	5.25%	110.57
$4.36 million	2023	Serial	5.25%	108.991
$4.34 million	2024	Serial	5.25%	107.521
$4.3 million	2025	Serial	5.25%	106.234
$4,245,000	2026	Serial	5.25%	105.202
$4.17 million	2027	Serial	5.25%	104.26
$11,295,000	2031	Term	5%	99.015
$29,435,000	2036	Term	5%	96.84
$49,465,000	2037	Term	5.75%	105.626
$225.23 million	2041	Term	5.25%	98.522
$17.23 million series 2011B taxable bonds
Amount	Maturity	Type	Coupon	Price
$1,745,000	2013	Term	2.496%	100
$2.01 million	2016	Term	3.607%	100
$3,745,000	2021	Term	5%	99.474
$9.73 million	2033	Term	6%	98.104
$102.26 million series 2011C refunding bonds
Amount	Maturity	Type	Coupon	Price
$1.22 million	2012	Term	3%	101.134
$2.69 million	2021	Serial	5%	110.27
$9,955,000	2023	Serial	5.25%	108.991
$10,355,000	2024	Serial	5.25%	107.521
$10,895,000	2025	Serial	5.25%	106.234
$11.47 million	2026	Serial	5.25%	105.202
$7.07 million	2027	Serial	4.5%	97.274
$5 million	2027	Serial	5.25%	104.26
$43,605,000	2041	Term	5%	95.689

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