BRADENTON, Fla. – Newly gilt-edged Union County, N.C., plans to make appearances in the bond market this week and in December offering investors two high-grade paper options.
The county will price $21.7 million of enterprise system revenue bonds on Wednesday through Robert W. Baird & Co.
Bond proceeds will pay for water and sewer system improvements as the initial financing for its $288.3 million, six-year capital improvement program.
Ahead of the transaction, Moody's Investors Service lifted its ratings on the water and sewer bonds to Aa1 from Aa2, while Standard & Poor's boosted its ratings to AA from AA-minus. Fitch Ratings maintained its AA rating for the credit.
The upgrades could cut the county's debt-service costs as much as six basis points, according to Christopher Alexander, the county's senior financial analyst and debt manager.
"Our understanding is there's not a whole lot of revenue bond paper from North Carolina in the market place," he said, adding that the deal should also be attractive due to overall low market volume.
Union County will be back in the market next month to issue general obligation bonds after winning recent triple-A ratings from Fitch, up from AA-plus, and Moody's, up from Aa1.
Standard & Poor's affirmed its AA-plus rating ahead of the GO deal, after raising it from AA in June.
The county plans to price $48.5 million of refunding GOs on Dec. 10 with PNC Capital Markets LLC as the book-runner and Wells Fargo Securities as co-manager.
As a result of the rating boosts, the county expects to trim 3 basis points from the transaction, Alexander said, adding, "I think that's probably realistic."
The refunding within existing maturities must comply with the county's policy of achieving 3% overall savings as well as 3% per maturity. The savings will be taken over the life of the loan.
Union County is located adjacent to Mecklenburg County, the state's most populous. The Union County seat of Monroe is 25 miles from Charlotte, Mecklenburg's seat.
As one of the five fastest-growing counties between 2000 and 2010, Union remains popular for its low-tax environment and quality of life, Alexander said.
With a current population of 216,000 set to grow by about 24,000 new residents in the next four years, county officials decided to move forward with long-term water and sewer system planning, he said.
The county expects to issue $190.6 million of water and sewer revenue bonds between 2017 and 2019 to support its $288.3 million capital improvement plan.
The largest project will be the $147.1 million Yadkin River water initiative to supply the northeast part of the county until 2050.
Stephens Inc. is the county's financial advisor.
For both upcoming deals, Parker Poe Adams & Bernstein LLP is bond counsel and Robinson Bradshaw & Hinson PA is underwriters' counsel.
