Fairfax County Sells AAA Rated Bonds


Fairfax County Office of Public Affairs
12000 Government Center Parkway, Suite 551
Fairfax, VA 22035-0065
703-324-3187, TTY 703-324-2935, FAX 703-324-2010

March 31, 2004

 

Fairfax County Sells AAA Rated Bonds

 

On Wednesday, March 31, Fairfax County sold $329.11 million in Aaa/AAA/AAA-rated tax-free general obligation and refunding bonds for public improvements at the lowest rate achieved by the county in 29 years since the AAA rating was first awarded.

The bonds were sold to Goldman Sachs at a true interest rate of 3.54 percent. This interest rate is the lowest interest rate achieved by Fairfax County since the first AAA was awarded by Moody’s Investors Service in 1975. The lowest rate the county received for 20 year bonds prior to this sale was 3.626 percent in May 2003. The total net interest cost on the new public improvement bonds will be approximately $88.1 million.

The county received five bids for the bonds with a high bid of 3.56 percent. The closeness of the bids is an indication of the highly competitive nature of the sale. Proceeds from the sale of the new public improvement bonds total $196 million which will provide funds for schools ($130 million); parks and park facilities ($33.38 million); commercial revitalization ($4.15 million); detention facilities ($1.67 million); neighborhood improvements ($1.82 million); transportation improvements and facilities ($21.02 million) and storm drainage facilities ($3.96 million). Voter authorization for the sale of these bonds was given by referenda in elections held from 1988 to 2002.

The refunding will result in savings of approximately $12.5 million net present value of the bonds refunded. The refunding bonds were sold to take advantage of current market conditions and low interest rates in order to refund outstanding bonds that have higher interest rates and are subject to redemption prior to their stated maturities. The refunding bonds will fund an escrow account and redeem the outstanding bond obligations at their earliest possible call dates. Including this refunding, the county has refunded $1.5 billion of the outstanding general obligation debt since 1989 for cumulative net present value savings of approximately $80 million.

With this bond issue, Fairfax County maintains its status as a top rated issuer of tax-free securities from Moody’s Investors Service, Standard and Poor’s Corporation and Fitch Ratings. Fairfax County has the highest credit rating possible for a local government – Aaa from Moody’s Investors Service Inc., AAA from Standard and Poor’s Corporation and AAA from Fitch Ratings. Only seven states, 23 counties and 21 cities have Triple-A ratings from all three investor services. The credit ratings enable Fairfax County to sell bonds at favorable interest rates compared to those of municipalities not so rated, resulting in substantial savings for county taxpayers over the life of the bonds.

Since 1978, including this sale, Fairfax County has saved over $200 million in reduced interest costs as a result of the AAA rating when compared to the Bond Buyer index at the time of the sales. The county has also refunded approximately $1.5 billion of the outstanding general obligation debt since 1989 for cumulative net present value savings of approximately $80 million. All together, Fairfax County has saved over $280 million through county bond and refunding sales as a result of the AAA rating.

For more information, contact Len Wales at 703-324-4087, TTY 711.



 

FAIRFAX COUNTY IS COMMITTED TO A POLICY OF NONDISCRIMINATION IN ALL COUNTY PROGRAMS, SERVICES AND ACTIVITIES AND WILL PROVIDE REASONABLE ACCOMMODATIONS UPON REQUEST. TO REQUEST SPECIAL ACCOMMODATIONS, CALL 703-324-3187, TTY 703-324-2935. PLEASE ALLOW FIVE WORKING DAYS IN ADVANCE OF EVENTS IN ORDER TO MAKE THE NECESSARY ARRANGEMENTS

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