Minneapolis

AAA rating and COVID-19 market help save Ramsey County $6.2 million in bond refinancing – Twin Cities

2020-11-20 05:00:33 –

Coupled with years of AAA ratings, the favorable climate for bonds has saved Ramsey County $ 6.2 million after refinancing two bond packages this week.

The success of refinancing was partly due to COVID-19, which created an opportunity for investors to choose security over high risk, said Terry Heaton, financial adviser to Baker Tilly of the county.

“You are in the market where people are looking for safe and secure bonds for COVID … to park money. Therefore, find the issuance of county GO (general obligation) bonds, including two triple A’s. If so, it’s very attractive, “says Heaton.

Earlier this week, the board approved the sale of $ 19.5 million in general debt and capital improvement plan refunds and $ 28 million in taxable general obligation refunds.

Bonds work by raising funds through investors, paying operating costs, and funding county-wide projects. Bond investors basically lend money to local governments in exchange for interest income earned on bonds. General debt bonds are unsecured by any asset, instead of relying on the full trust and credit of the issuing municipality. The county has the authority to tax residents to pay bondholders.

Heaton told the board on Tuesday that he expected to save $ 5.3 million in the process, but the actual savings were $ 6.2 million.

“Wow. Wow. That’s amazing news,” said Ramsey County Commissioner Mary Joe Magwire after hearing the report. “I am very proud of our county.”

Heaton said the fact that the county maintained its AAA bond rating was a sign that the county was in good financial position and helped seduce investors.

“It’s as strong as you can now get a credit rating report,” Heaton said. “The credit rating gave us a long-term plan. I think the agency really focuses on the foundation you build.”

AAA rating and COVID-19 market help save Ramsey County $6.2 million in bond refinancing – Twin Cities Source link AAA rating and COVID-19 market help save Ramsey County $6.2 million in bond refinancing – Twin Cities

Back to top button