The El Paso baseball fiasco bonds are now on the Primary Market. They were put on the market today, August 22, 2013 at 10:36 am. The first execution was at 1:00pm. They are expected to be added to the Secondary Market, next Thursday, on August 29, 2013. The Primary Market, in the Municipal Markets realm, is like the IPO market in the Stock Exchange. Only those with significant assets can participate in this market. For the rest of us, we have to wait for the Secondary Market in order to partake of the municipal bonds.
In regards to the ballpark fiasco, the city has issued four Series A bonds and one Series B bond. For more information on the bonds, please visit this page.
The Series B Bond (CUSIP 283738AE2), the taxable one, is listed for $15,660,000 at an initial offering percent of 100.117% with an initial offering yield of 7.24%. The interest rate listed is 7.25%. The maturity date for this Bond is August 15, 2043.
The Series A is divided into four offerings as follows:
1. CUSIP: 283738AA0; Maturity: 08/15/2023; Interest Rate: 6.25%; Principal: $5,170,000; Initial Offering Price: 107.757%; Initial Offering Yield is 5.24%.
2. CUSIP: 283738AB6; Maturity: 08/15/2027; Interest Rate: 7%; Principal: $5,000,000; Initial Offering Price: 107.661%; Initial Offering Yield is 4.85%.
3. CUSIP: 283738AC6; Maturity: 08/15/2038; Interest Rate: 7.25%; Principal: $22,500,000; Initial Offering Price: 109.661%; Initial Offering Yield is 5.95%.
4. CUSIP: 283738AD4; Maturity: 08/15/2023; Interest Rate: 7%; Principal: $12,455,000; Initial Offering Price: 110.54%; Initial Offering Yield is 4.009%.
All five Series have been given an S&P LT Rating of “AA-“.
It is my understanding that once the Bonds enter the secondary market, those interested in purchasing bonds would have to do so in lots of $5,000.
From a novice’s point of view the interest rate spread seems to me to be higher than normal for this type of offering. Maybe someone with more knowledge can set me straight.