Detroit to sell $493.38 million water supply system revenue bonds

By Sheri Kasprzak

New York, Dec. 7 - The City of Detroit is expected to come to market with $493.375 million of series 2011 senior-lien water supply system revenue bonds, according to a preliminary official statement.

The deal includes $481.97 million of series 2011A tax-exempt bonds (A1/A+/) and $11.405 million of series 2011B taxable bonds (A2/A/).

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

The maturity dates have not been set.

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

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