County Sells AAA-Rated Bonds
Jan. 25, 2011
Fairfax County conducted a bond sale today and sold $190.09 million of general obligation bonds (rated Aaa/AAA/AAA) to J.P. Morgan Securities LLC at an interest rate of 3.706 percent. The refunding from the sale will generate a net present value savings of $1.203 million. There were a total of nine bids, which demonstrates strong support for the county’s bond offering.
The interest rate was 1.7 percent lower than the Bond Buyer Index (BBI), which stood at 5.41 percent today. Over the past 30 years, the differential rate on the county’s bonds and the BBI has averaged 0.77 percent.
The sale of new public improvement bonds will provide total proceeds of $182.3 million for schools ($131.5 million); parks and park facilities ($13.9 million); and transportation improvements and facilities ($36.9 million). Voter authorization for the sale of these bonds was given by referenda in elections held from 2008 to 2010.
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, AAA from Standard and Poor’s and AAA from Fitch Ratings. As of Jan. 19, only eight states, 37 counties and 37 cities in the nation have triple-A ratings from all three investor services.
Since 1978, the county has saved approximately $350.5 million on bond sales due to its triple-A ratings on new public improvement bonds. Including refunding sales, the county has saved more than $484.66 million as a result of its rating.