Strong Demand Prompts Sale Of County Bonds To Fund Emergency Radio System While Saving Taxpayers Millions
Pontiac, Michigan – County Executive David Coulter today announced the sale of series of Oakland County Building Authority Bonds that will fund part of a new emergency radio system, refinance outstanding bonds at a lower interest rate and save taxpayers millions of dollars.
The high demand for the bonds resulted in a lower interest rate, benefiting the county and taxpayers. Seven sealed bids were received for the bonds.
“This was a great day for the taxpayers of Oakland County,” Coulter said. “The strong demand for the Building Authority bonds shows that investors are willing to put their dollars behind Oakland County. The credit ratings agencies also displayed strong confidence in Oakland County’s economic and financial health by affirming our Aaa/AAA credit ratings.”
The initial bond sale was scheduled for March 24 but postponed due to the financial crisis associated with the COVID-19 pandemic. Since that time, the index used to establish interest rates for tax-exempt bonds has fallen approximately 150 basis points or 1.50 percent.
The exceptional high demand resulted in a lower interest rate on the bonds or a true interest cost of 1.32 percent for bond maturing in the years 2020 through 2039. The bond proceeds will be used to fund a portion of the county’s new emergency radio communication system and to refinance six outstanding Building Authority bond issues. The refinancing portion of the transaction resulted in interest savings of $2,197,300 for the county or local units of government that rent facilities from the county.
Prior to the bond sale, credit rating agencies conducted a thorough review of the county’s economy and finances in order to assign a credit rating. The county’s credit ratings were affirmed by Moody’s Investor Services at “Aaa” Stable and Standards and Poor’s at “AAA” Stable. These strong ratings allow the county to borrow money at a lower interest rate, which translates to taxpayer savings and reflects the general creditworthiness of the County. Miller, Canfield, Paddock and Stone, P.L.C. served as bond counsel, with Robert W. Baird as municipal advisor on the sale.