Florida's $125M Lottery Revenue Bonds Rated `A' By Fitch IBCA.Business Editors NEW YORK--(BUSINESS WIRE)--March 3, 2000 The State of Florida's $125,000,000 lottery revenue bonds series 2000A, to be issued on behalf of the State Board of Education upon 20 hours' notice as early as March 6, are rated 'A' by Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals . The bonds will be due serially July 1, 2001-20, with bonds due 2013-2020 subject to designation by bidder as terms with mandatory sinking fund sinking fund, sum set apart periodically from the income of a government or a business and allowed to accumulate in order ultimately to pay off a debt. A preferred investment for a sinking fund is the purchase of the government's or firm's bonds that are to be paid redemption; bonds will be optionally callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. beginning July 1, 2010 at 101%. This is the fifth installment of a $2.5 billion bond authorization for a program to address the state's critical K-12 facility shortage and relieve overcrowding overcrowding overcrowding of animal accommodation. Many countries now publish codes of practice which define what the appropriate volumetric allowances should be for each species of animal when they are housed indoors. Breaches of these codes is overcrowding. , and are on parity with the $646.5 million outstanding lottery revenue bonds. These bonds were originally intended for sale in June 1999 but were postponed. These bonds are solely secured from a first lien lien, claim or charge held by one party, on property owned by a second party, as security for payment of some debt, obligation, or duty owed by that second party. on the current statutory allocation of 38% of gross lottery revenues, net of the retailers' application fees, deposited into the Educational Enhancement Trust Fund (EETF EETF Educational Enhancement Trust Fund (Florida Lottery) EETF Electronic Equipment Test Facility EETF Extended Exact Transfer Function EETF Eth Evc Termination Function ). The legislature has appropriated $180 million of such EETF revenues annually for debt service on the lottery bond Lottery Bond A bond issued in the U.S. and U.K. with a rate of return dependent upon a lottery style payout. Notes: The lottery payout structure involves a method of random draws. program, a level that is expected to be fully utilized. Florida's voter-approved lottery began in 1988 and proceeds are constitutionally dedicated to educational purposes. Total lottery sales have approximated $2 billion in each year since inception, affording around $800 million annually to the EETF based on the allocation. Florida's lottery may be characterized mature, experiencing slow growth. While there are definable weaknesses in lottery profits as a source of bond security, including its discretionary nature as well as the potential for changing tastes or the introduction and availability, either within or outside the state of other forms of gaming, there are offsets to the inherent uncertainties. Since 1989, annual coverage of projected maximum debt service for the full $2.5 billion capital program has approximated 4.5 times (x), affording comfort. While revenues declined slightly in 1997-98, a small 2.3% gain was made in 1998-99 although lottery sales and amounts transferred to the EETF remained essentially at the 1990 level. Sales revenues for the last six months of calendar 1999 were up 12.1% from the comparable period in the prior year, largely reflecting the reintroduction Noun 1. reintroduction - an act of renewed introduction intro, introduction, presentation - formally making a person known to another or to the public of a game and changes to Lotto which accounts for some 36% of ticket sales. Following two upward revisions to revenue estimates for fiscal 2000 and 2001, overall growth experience through the first seven months of fiscal 2000 was some $21.6 million below estimates and resulted in the Feb. 2000 consensus revenue estimating conference reducing projected annual increases to 5.7% for this year and 2.8% in fiscal 2001. Security is additionally supported by a 3x additional bonds' test and a non-impairment clause ensuring that any alteration to the present 38% allocation to the EETF requires a minimum of 2x coverage. The debt service reserve requirement, maximum annual debt service, will continue to be met through purchase of a surety bond surety bond An insurance fee required before a duplicate security is issued to replace one that has been lost. The fee is approximately 4% of the market value of the security to be replaced. . The state has also covenanted that any other similar state gaming revenues will first be applied to debt service on lottery bonds. While the enabling legislation Noun 1. enabling legislation - legislation that gives appropriate officials the authority to implement or enforce the law legislation, statute law - law enacted by a legislative body allows 30-year bonds, issuance of 20-year bonds has been legislatively directed and intended, a more appropriate term in light of the long-term uncertainties of the securing revenue stream. As a result, the current $180 million appropriation level may ultimately need to be increased to support full issuance of the $2.5 billion bonding program within the shortened 20-year maturity. |
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