Rogers Ordogne
May 16, 2007Edna Griffin
May 18, 2007
Terrebonne Parish sold $10 million in bonds during last Wednesday night’s regular Parish Council meeting to the Denver stock and bond brokerage firm Stifel Nicolaus.
The money, which Terrebonne Parish will receive on June 20, will be used “to pay for drainage and roads,” said bond counsel Jerry Osborne.
The parish will pay 4.3 percent in interest on the 20-year, general obligation bonds.
“The (bond) issue was accepted well by the financial community,” Osborne said. Terrebonne Parish “got favorable interest rates.” In fact, he said, Stifel Nicolaus “seldom bids on Terrebonne bonds.”
The interest earned by Stifel Nicolaus on the $10 million is not taxable, like all municipal bonds, he said.
The brokerage firms Merrill Lynch and Morgan Keegan offered to charge the parish 4.6 percent and 3.8 percent in interest, respectively, to purchase the $10 million in parish-issued bonds.
A cost of “4.30 (percent) is always a good interest rate,” Osborne told the Terrebonne Parish Council. “I recommend you adopt that ordinance at the 4.30 level.”
The motion to accept Stifel Nicolaus’s bid carried with no nays.
Parish Councilman Harold Lapeyre called the brokerage firm’s offer “a good bid.”
Earlier, Lapeyre asked Osborne, “Who buys the bonds?”
Osborne replied, “Anybody who wants to put in a bid.
“Few individuals can put up $10 million,” he explained. “Someone buys the bonds, and retails them out to various customers. Someone will buy the bonds, and break them up.”
Osborne told the council that his job is to “make your bonds more attractive than those of other governments. We’re using modern machinery to make yours more attractive. Now all bids will come in one swatch electronically. ”
Though the parish council meeting began at 6 p.m., bids to purchase the bond issue came in to the council until 6:30 p.m., when the bids were “cut off electronically,” Osborne said.
He praised the council’s financial system and its spending practices.
“You’ve maintained your A+ rating with” bond-rating firms, he told the council. “You don’t spend down to your last penny.
“Do you have enough to operate on in case of disaster?” he asked. “You now have low interest rates because of your fine rating.”
Osborne said also that three bond-guaranty firms have offered to insure the purchaser of the parish’s bond issue.
The lowest quotes came from CIFG and MBIA, which made offers of $14,800 and $26,400, respectively, he said.
“For a $10 million issue, $14,800 is low. It’s a good business,” Osborne said, referring to bond-guaranty companies. “Municipal governments don’t default.”
However, If Terrebonne doesn’t promptly pay the interest on the bonds to the purchaser, he said, the insurer would pay it.
Lapeyre said, “Terrebonne has never defaulted. The public needs to know.”
Osborne alluded to the parish’s stronger financial system, telling the council, “Fifteen years ago, these insurance costs would have been seven to eight times higher.”
He said that the interest amount the parish paid on its previous bond issue “was probably 4.60.”
Also at last week’s meeting, Councilwoman Christa Duplantis memorialized former parish claims adjustor Larry Arcement. A certificate was presented to members of his family. Councilman Alvin Tillman called Arcement “a consummate professional.”
Members of the Mulberry Elementary school band in Houma were honored for achieving state-level recognition for recent performances. The band won a superior rating in Thibodaux on March 27, and sweepstakes ratings for their superior performance in Lake Charles at a state competition, said Councilwoman Teri Cavalier.
Councilman Clayton Voisin, whose district contains the elementary school, said “Mulberry has led the parish.”
In an addendum to the agenda, Duplantis, who is a registered nurse, read a proclamation declaring May 6-12 to be Nurses Week. Representatives from Chabert and Terrebonne General medical centers accepted the proclamation.
Duplantis told them, “I’m with you every day.”
