York County, South Carolina, competitively prices the first of two general obligation bond issues Thursday, buoyed by a recent GO rating upgrade to Aaa by Moody's Investors Service.
Sealed bids will be taken Thursday for the first $10 million of high-grade GOs.
Proceeds will be used to help build the voter-approved 32-acre Lake Wylie Recreation Park, which includes multi-purpose fields for soccer, football, lacrosse and baseball, lighting and related facilities. The debt will also pay the cost of issuance.
The deal, backed by the county’s full faith, credit and taxing power, is expected to be structured with serial bonds maturing between September 2019 and March 2029.
Moody's gave the bonds its highest rating, an upgrade from Aa1, citing the county’s “robust” financial position, rapid growth, and sizable tax base. Moody’s also assigned its Aaa rating to about $135.2 million of outstanding GOs, and said the outlook is stable.
S&P Global Ratings assigned its AA-plus rating to the bonds.
“York [County] is now the fourth Aaa-rated county in South Carolina,” said financial advisor Brian Nurick, managing director with Compass Municipal Advisors LLC. “Charleston, Greenville and Richland counties are also rated Aaa by Moodys Investors Service.”
Nurick also said York County will be back in the competitive market Feb. 5 to price another $21 million of GOs. Proceeds of that deal, also rated Aaa by Moody’s and AA-plus by S&P, will be used to help acquire 1,900 acres of undeveloped land to use as a greenway for recreation purposes.
Haynsworth Sinkler Boyd PA is bond counsel for the GO deals.
For bondholders interested in York County, the deals this week and in February will be the last opportunity to invest in new general obligation debt for about three years. The county doesn’t anticipate issuing additional GOs until June 2022, according to the preliminary official statement for Thursday’s issuance.
A pay-as-you-go program for capital needs is also being implemented, according to Moody’s analyst Evan W. Hess.
“The county's debt profile will remain manageable over the near term given a lack of future borrowing plans, use of pay-go funds to finance capital projects, aggressive retirement of outstanding debt and tax base growth,” Hess said.
After the issuance GOs this year, Hess said the county's direct debt burden will be $156.9 million, or a modest at 0.67% of full valuation, which is comparable to Moody’s national Aaa median.
