County Sells AAA-rated Public Improvement Bonds
Jan. 20, 2012
Fairfax County conducted general obligation public improvement bond sales on Wednesday, Jan. 18 and Thursday, Jan. 19. In the ratings reports for the bonds, the county’s overall financial condition and debt management were highlighted as strengths by all three rating agencies. Standard and Poor’s noted the county has a “strong, deep, and affluent economy, which serves as a principal anchor for the greater Washington region” and has “excellent financial management and stable finances, and moderate overall debt.”
The Jan. 18 sale of General Obligation Public Improvement Bonds, Series 2012A was conducted via a competitive sale in the amount of $220.67 million to Citigroup Global Markets at a low interest cost of 2.43 percent. The timing of the sale of the 2012A bonds allowed the county to capitalize on interest rates that were at the lowest levels recorded in recent history for the county.
The number of bids and close proximity of the bids reiterate a strong support of the county’s bond offerings.
The proceeds of the 2012A bonds total $240.35 million (including sale amount and bond premium) and fund the following: Schools ($167.3 million); Transportation Improvements and Facilities ($56.8 million); and Parks and Parks Facilities ($16.25 million). Voter authorization for the sale of these bonds was given by referenda in elections held from 2004 to 2010.
On Jan. 19, the county conducted a negotiated General Obligation Refunding Bond Sale in the amount of $192.36 million. The sale generated net present value savings of $24.66 million or 11.28% of the refunded bonds. The savings are spread over the life of the refunding bonds through FY 2024. This was the county’s first use of a negotiated sale process for General Obligation refunding bonds, based on volatility in the market and the sensitivity of the refunding.
As a result of its excellent triple-A bond rating, Fairfax County has saved an estimated $538.09 million from county bond and refunding sales since 1975.
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