Baltimore Sun

Search the Baltimore County community newspaper archives

>> Click here to search for stories published AFTER 2011

>> Use this search box to find stories published prior to 2011.

Note: All Words is a more strict search. Implied operator is "AND."
Ex: Charles Dickens"

news

home

Harford sells $229.3 million in bonds

BY L’OREAL THOMPSON

Posted 6/02/10

Harford County government sold $219.3 million in bonds Tuesday at what officials said are the lowest interest rates in county history.

“In difficult times, the county has not only seen an AAA bond rating, but the lowest interest charged for bonds,” County Executive David Craig said. “...This will save our taxpayers a lot of money.”

With only a few minutes to spare, the Harford County Council unanimously approved the interest rates during a special legislative session Tuesday afternoon.

The sale included nearly $193,575,000 in public improvement bonds and $25,770,000 in refunding bonds, the latter sold to lower the interest cost on previously issued debt.

The public improvement bonds cover various school projects, such as $59 million for the new Edgewood High School, $29 million for the new Bel Air High School, $15 million for Deerfield Elementary School, which is nearly complete, and $5.7 million for the new Red Pump Elementary School.

In addition to the school projects, $30 million will be used for the expansion of the Harford County Detention Center, $5 million to expand the Scarboro landfill and $12 million to expand the Whiteford Library. Several of the projects are completed or well on the way toward completion.

Among the public improvement bonds, the series 2010 A bonds, $91 million, are tax exempt, while the series 2010 B bonds, $102,575,000, are taxable Build America bonds.

J.P. Morgan Securities Inc. put in the lowest bid on $91 million in public improvement series A bonds at a 2.210349 percent interest rate.

The true interest cost is estimated at $12.6 million.

Bank of America Merrill Lynch put in the lowest bid at a 3.847262 interest rate on $102.5 million in public improvement series B bonds.

The true interest cost is $54.2 million.

This is the first time the county has sold Build America bonds, which were introduced with the federal economic stimulus funding.

J.P. Morgan Securities Inc. put in the lowest bid at 2.229028 interest rate on the $25,770,000 million in refunding bonds.

The true interest cost is $3.9 million and a premium of $4 million.

Before the sale of the refunding bonds, the council approved a slight reduction in the principal amount from the $32 million it had approved last month.

This year, the county’s credit rating is AAA, the highest possible, from Fitch and Moody’s. The county received a AA+ rating from Standard and Poor’s this year.

“A AAA bond rating is really worth a great deal,” Lester Guthorn, the county’s financial adviser, said. “It’s not a one-time benefit. It’s a benefit going forth. Every tie you sell a bond, your interest rate will be lower, relatively speaking.”

Last year, the council approved nearly $146 million in bonds, which included $120 million in new general obligation improvement bonds and $25.9 in refunding bonds.

Citigroup Global Markets Inc. put in the lowest bid at a 3.75 percent interest rate on the $120 million public improvement bonds.

Robert W. Baird & Co. Inc. put in the lowest bid at a 2.3 percent interest rate on the $25,990,000 refunding bonds.

The county’s credit rating for last year’s sale was AA1 from credit rating agencies Fitch and Moody’s and AA+ from Standard and Poor’s.

Bids on the bonds were taken electronically until 11 a.m. Tuesday. The bids remained firm until 3 p.m. and the council approved the sale resolutions at about 2:54 p.m.

The council went into recess for about 45 minutes after the start of Tuesday’s session to finalize paperwork and make copies of the resolutions.