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William Salim Worked $328M Revenue Refunding Bond Issue

William Salim Worked $328M Revenue Refunding Bond Issue


Adolfo Pesquera, Daily Business Review

April 15, 2014    

William Salim William Salim Melanie Bell

Dealmaker: William Salim

The Deal: The Moskowitz Mandell Salim & Simowitz attorney represented senior managing underwriter Goldman Sachs & Co. on a $328 million revenue refunding bond issue for the Miami-Dade County Aviation Department that closed March 28.

Details: The county initiated a transaction for a bond issue a year ago to realize savings from debt being carried by Port Authority properties. The plan was to issue limited obligation series bonds payable primarily from net revenue of Miami International Airport.

The deal, however, became impractical due to an upturn in the bond market. In September and October in particular, interest rates were well above the county’s target—a net present value savings of at least 5 percent.

“From my standpoint, the deal basically fell out of the money,” Salim said, adding he had no expectation that rates would come into the county’s range anytime soon. Throughout the winter, that held true. But in March there was a favorable turn, and the bond issue plan was set in motion.

When the bond deal was first contemplated, Salim said there were estimates the county would be able to sell as much as $750 million in revenue refunding bonds.

That would have made a significant dent in the overall debt as principal and interest for all aviation revenue bonds stands at almost $10.4 billion.

When the market rebounded in March, however, the underwriters foresaw a significantly smaller transaction of as little as $158 million. It was perceived as fortuitous when it came time to price and sell, the sale reached $328 million.

The Series 2014 bonds have interest rates ranging from 4 percent to 5 percent, with the differences depending on when they mature. The life of the series runs from 2015 to 2034, according to the offering statement.

The refunding bonds retire bonds issued in 2002 and 2003. No new money was financed.